Te Whanau-a-Taupara Trust Empowering Bill — Second Reading Third Reading 
Te Whanau-a-Taupara Trust Empowering Bill — Second Reading Third Reading 
[Volume:608;Page:5727] 
Te Whanau-a-Taupara Trust Empowering Bill 
Second Reading 
Hon PAREKURA HOROMIA (NZ Labour—Ikaroa Rawhiti) 
: 
 I move  
That the Te Whanau-a-Taupara Trust Empowering Bill be now read a second time 
. I am pleased to sponsor this bill on behalf of the Te Whanau-a-Taupara Trust and its beneficiaries. The bill proposes to dissolve the Waerenga-a-hika Trust and constitute the Te Whanau-a-Taupara Trust in order to modernise the administration of the trust and remove existing impediments to its effective operation. 
The Waerenga-a-hika Trust Act 1947 provided for the incorporation of the new board to hold property then held by the Waerenga-a-hika Trust Board. The Act has not been amended since 1947. The present trustees consider that it is now timely that new arrangements be made to provide for the future needs and objectives of the trust. 
The bill was introduced on 21 December 2001 and was referred to the Maori Affairs Committee for consideration. The committee received and considered only two submissions on the bill. The submissions identified the challenges for the trust the key one being the need to modernise its administration. After thorough examination of the bill the select committee has unanimously proposed a number of amendments that clarify certain matters contained in the bill and modify to some extent the provisions in the trust deed. I wish to acknowledge and thank the members of the Maori Affairs Committee for their thorough examination of the bill. 
In conclusion I urge that this bill proceed without delay. 
JOHN CARTER (NZ National—Northland) 
: 
 Very briefly the National Party is happy to support this sensible bill. It reorganises a historical structure and we want to see it modernised. That is entirely what this bill will do and the National Party will support its progress in both the second and third readings. 
BILL GUDGEON (NZ First) 
: 
 New Zealand First supports the Te Whanau-a-Taupara Trust Empowering Bill. The bill seeks to dissolve the Waerenga-a-hika Trust and constitute the Te Whanau-a-Taupara Trust in order to modernise administration and remove existing impediments to its effective operation. All assets of the board are to be vested in the trust. 
Submissions received from the board and Te Whanau-a-Taupara mentioned the need to modernise the administration of the board; the restrictions imposed by the ties to the Anglican Church; the constraints on self-governance; and the problems caused by perpetual leases. Te Whanau-a-Taupara represents a section of Te Aitanga-a-Mahaki iwi who hold mana whenua over Waerenga-a-hika lands. These comprise approximately 245 hectares of predominantly pastoral land with an estimated value of $6.048 million that are currently held by the board. 
A quick historical review clarifies that the land was given to the Crown in 1857 by the Tauparawhanau which then gave the land to the Bishop of New Zealand. The land was later returned to the whanau in 1862 to become a charitable and educational trust to provide a school for Maori who had connections with the Anglican Church. After the enactment of the Waerenga-a-hika Trust Act in 1947 the object of the trust was designed and defined as being for the provision of scholarships for the post-primary education of children of the Mahaki tribe especially those of Te Whanau-a-Taupara. 
Submitters consider the requirement of the 1947 Act that the trust board be accountable to the Anglican Church is too restrictive but also recognise their cordial and harmonious relationship for many years. Concern about appointments to the board has been a factor and furthermore the requirement that the education grants be for attendance at Anglican schools only is difficult and becoming more expensive to fulfil. Furthermore there is creeping in a reluctance of non-Anglican whanau to send their children to Anglican schools. It has been noted that the Anglican Church is in agreement with the Waerenga-a-hika Trust Board about the non-necessity for it to maintain close ties with the church. 
The fact that the beneficiaries under the trust deed are related by blood does not prevent the purposes of the trust as declared by the trust deed from complying with the public benefit requirement of the law relating to charitable trusts. Unlike the Ngati Rarua-Atiawa Iwi Trust Empowering Act the bill does not require the trust to keep an official list identifying the beneficiaries. The board does have records of families who meet the criteria and plans to keep that list under review so that accuracy at all times is maintained. 
Clause 10E allows for the trust’s annual accounts and auditor’s report to be made available for inspection by any beneficiary at the trust office at any suitable time. The deed allows and widens the powers of the trustees to adapt and make changes in land use and also gives provision for board members to exercise business-orientated powers allowing them to invest trust moneys and assets in enterprises that will return a profit to the trust and giving them greater control of the use of the funds. 
New Zealand First supports the bill and encourages the trust to be accountable to the beneficiaries with integrity and honesty. 
MURRAY SMITH (United Future) 
: 
 United Future will support this bill. It is quite interesting to learn a little bit about the background. It appears that the land was originally donated to the Crown for the purpose of training young Maori to enter the ministry of the Anglican Church. A church school was erected under the auspices of the Anglican Church to facilitate that process. It is quite interesting to see that history as part of the Christian involvement with Maori in the mid-19th century. We all know as we have seen in the bill that the school was subsequently burnt down. It appears that there were a number of impediments to erecting a new school including not only the cost of materials but also the difficulty in getting planning consent to put up a new school. 
It has been quite interesting for me to read the debate in the House in 1947 at the time that the original trust was set up to take care of the money that had become available because the school would not be rebuilt. It went to the Anglican Church largely because the original intention for the land had been to foster the close link that Maori had with the Anglican Church. Part of the reason for not rebuilding the school was that the training of Maori and indeed any New Zealanders for the Anglican priesthood had moved away from local areas—in particular from Gisborne—and was concentrated in St John’s College where it is still largely concentrated today. So the idea of having a local school in Gisborne in order to provide training for the Maori priesthood had ceased to be an important consideration. 
We have now progressed to the stage where I am very pleased that we as a society see that Maori are quite capable of looking after their own resources and we do not need institutions—albeit the Anglican Church—to look after resources on behalf of Maori and to invest them. We can actually entrust that to the people. Of course it is totally appropriate that the entrustment of those assets goes back to the whanau who originally donated the land and whom—in a broader sense—the money and the benefits were meant to be allocated to. 
However there are a few things in the bill that I think are worth commenting on. Not having been on the select committee but having been a trust lawyer I have to draw attention to a few things. The first of those—and I will finish by teatime—is the whole argument of our giving the trust special charitable trust status. The way in which the Inland Revenue Department operates is that there is a requirement for sufficiency of public benefit and that means that effectively in order to make the trust a charitable trust there was a need to ensure that a special provision was put into the Act to say that it was a charitable trust notwithstanding the fact that there was some suggestion that the Inland Revenue Department would have considered that because of the blood ties of the beneficiaries there was an insufficiency of public benefit. It is a little undesirable to make exceptions in that regard when other trusts cannot do that and I would prefer that the situation was dealt with by the Inland Revenue Department reviewing its policy rather than by the necessity of our putting in a special clause but nevertheless the clause is there and in the meantime I do not see any objection to it. I do not think that when blood ties are so extensive as to include an extensive whanau with a huge number of people the simple fact that there are blood ties means that the trust should be taken out of the category of sufficiency of public benefit. Surely the number of beneficiaries potentially able to benefit from this trust is large enough for the grouping to meet that test. 
The second thing is in terms of the alterations or additions to the trust deed. It is quite appropriate that the whanau themselves and the trustees by a majority of 75 percent can make the changes that are necessary rather than their having to come back to this House with more legislation every time they want to make a change in order to keep the trust deed compliant with modern moves in trust law. It is good that they can make those changes themselves and I welcome that. 
The one that does concern me however and that I cannot understand is the provision that clause 17.1 of the trust deed be taken out which inhibits the power to terminate the trust. In terms of trust law it is a normal provision that is put in trust deeds to provide a backstop measure in case the trust ceases to function. It is pretty easy to see a situation where the trust might have divested itself of both its capital and income and be in a position where it really was no longer functioning for some reason or another and ought to be wound up. I can see no real reason why effectively that clause could not have continued in there simply as a backstop measure so that there might not be an empty trust a hollow shell that had no money or anything in it and that could not be wound up simply because that clause had been taken out. I have difficulties with that and I also have difficulties about there not being an ability to appoint a liquidator for the same reason. There may well be a situation where the trust should not continue because it has no financial resources. It seems a bit strange to me that those things are taken out. 
Those are relatively minor points. Obviously there are cross-party benefits so we will support the bill. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
STEPHEN FRANKS (ACT NZ) 
: 
 The ACT party is not represented on the Maori Affairs Committee and therefore we come to the Te Whanau-a-Taupara Trust Empowering Bill cold. I hope that someone is prepared to take the call to reassure us after I have put a few questions. At the moment it is very difficult for us to know whether this is simply a minor matter—the sort of private bill matter that goes through so that Parliament can facilitate arrangements that everyone should be happy about and that are without any public interest implications—or whether instead there are things that the public should be concerned about. So as I put these questions I do rather hope that there is someone listening who can speak to this bill to answer them and reassure me. 
The first issue is the purpose clause. I do not have the advantage of having the original trust deed but the purpose clause of this new trust deed is rather extraordinary for anything that purports to be charitable or benevolent in purpose. I shall refer to clauses 3 4 and 5 of the trust deed in schedule 2. 
The first one clause 3 “Creation of Trust” is quite unexceptional. There is an obvious charitable purpose: “… to promote the educational and vocational training of beneficiaries residential care of beneficiaries in relation to their educational and vocational training spiritual welfare (including Tauparatanga) and the relief of poverty …”. There is something in there called Tauparatanga and it relates to spiritual welfare. I can only assume that because this deed relates to Te Whanau-a-Taupara somehow there is a view that the fostering of hapu or iwi consciousness has now become a facet of spiritual welfare. If so that is a rather peculiar thing for Parliament to be blessing. The notion that a clan consciousness if we were Scottish or any kind of simple family consciousness is now spiritual is indeed peculiar. I would certainly like to know whether that is the correct reading of it. 
But then we come to the supplementary “Purposes and Powers” clause. We find that as long as the trustees have decided that satisfactory provision has been made to meet the primary purpose of the trust which is educational they may “Establish maintain and develop marae …” and they may “Advance the cultural activities needs or aspirations of any of the beneficiaries:”. That appears to cover any aspiration. Who knows what a cultural aspiration is? Is it to have the biggest CD collection in Gisborne? What is a cultural aspiration? The trustees are also able we see here separately to “Advance Tauparatanga amongst the beneficiaries:”—whatever that is—and they may provide donations to any beneficiary. That is not a charitable purpose. It simply means that they can hand out the trust assets to any beneficiary with no restriction as to purpose. 
The purposes come perhaps within the bounds of charitable purpose where they state the trustees may “Relieve poverty and make loans or grants towards the relief of indigence or distress …”. That is fine but here is Parliament creating a trust with $7 million or $8 million of assets that no longer even has to list its beneficiaries or keep a roll. There is a concession in this bill against that requirement. So it is not a normal iwi or rununga. This trust will now be in the hands of trustees who no longer have the Anglican Church looking over their shoulder. It will now be left to the beneficiaries to incur the cost of challenging anything that the trustees do because simple ordinary charitable trust law will apply. Yet these trustees are now free to “Establish maintain and develop marae …”; to “Advance the cultural activities needs”—it may not even be cultural needs; from the way that this provision is drafted it may just be any need or aspiration of any beneficiary because this drafting is very unclear—and to provide donations. 
It could just be a case of if the trust blows this $7 million it is one family’s loss and why should Parliament worry? Well Parliament should worry because this trust is also getting a tax concession that no one else gets. 
David Benson-Pope 
: Tell us about the Pipi Trust. 
Hon Parekura Horomia 
: What about you? 
STEPHEN FRANKS 
: Is that the Labour whip interjecting there? Is it of no concern at all that Parliament is changing a trust that for 100 years has advanced education; is putting the money into the hands of trustees who can hand it out in donations to anyone they like; and is giving them a tax concession and telling this trust that it can do what any wealthy family anywhere in the country would love to do—put its assets into a trust that the Inland Revenue Department cannot tax then use that money for anything it likes? Who in this House would try to defend that? Who would defend the Inland Revenue Department being obliged to stand clear of taxing a trust for an unknown but small number of beneficiaries with $7 million to $8 million in it that can be used for any purpose that the trustees like that has no connection with any traditional charity? That is either a great boondoggle or this is another instance of the Labour Government considering that when it comes to pork-barrelling racism and handing out largesse it will even allow its mates the full freedom to prey on trust assets that should be going to beneficiaries and that should be going to advance education. 
I had hoped that someone would be saying: “Oh that seems to be an oversight; there’s a simple explanation.” I had thought that someone would undertake to take a call and explain this. Instead I get a series of insults from Ministers on the Labour benches saying the equivalent of the old chant “What about you?”. Why has no one thought that this is serious? Why has the Maori Affairs Committee made an acknowledgment that these are concessions without acknowledging the full scope of them? This trust does not have a roll of beneficiaries and now no one will be empowered to look into this. Why is this trust being exposed to the depredations of its trustees with no effective constraint on where that money can go? It would have been a very small thing for the select committee to say that there are a whole lot of useful things in the trust deed and to have said that it would approve it only if the power to “Advance the … needs or aspirations of any of the beneficiaries:” were struck out. 
What sort of trust purpose is that? What lawyer could have put hand on heart or pen to paper and certified that that was an appropriate purpose for a charitable trust? What lawyer or even parliamentary select committee could have said that it is charitable to meet the costs of research and establishment or support of whanau claims? Claims to what? To a swimming pool? Claims to what for the whanau? Claims to avoid the noise of air traffic overhead? Who knows what that means? There is no restriction of it to any kind of charitable claim. This Government is providing another tax concession and this time not just the 19 percent concession that ordinary Maori organisations have been given because of the argument that most of the beneficiaries are taxed at 19 percent; this is complete tax avoidance. There is complete exemption because of the charitable status of this trust. 
I will be very disappointed indeed given that there appears to be no prospect of an answer on these questions if the National Party or New Zealand First decides that this bill should go through. It should be returned to the select committee for answers on these matters. 
My questions are genuine questions. If someone had looked as though he or she were going to answer them we would have voted in favour because people do vote to facilitate the modernisation of a trust that clearly has outdated terms. Parekura Horomia may have an explanation—he is in the House. The Minister of Social Services and Employment who is in the House should be looking at the precedent being set here that a trust can give its money to anything instead of education. The Hon Steve Maharey also has responsibility for education and he might have a view on why $7 million which should be spent on education can be tax-free and can be given to anyone. I doubt whether John Tamihere’s Waipareira Trust would have objects as broad as this and maintain charitable status. I ask Mr Tamihere whether they are broader. Can money be donated to any beneficiary for any purpose? 
Dail Jones 
: What is the charitable trust clause? 
STEPHEN FRANKS 
: The charitable trust clause— 
Madam DEPUTY SPEAKER 
: The question is that the motion be agreed to. All those— 
Hon KEN SHIRLEY (Deputy Leader—ACT NZ) 
: 
 I raise a point of order Madam Speaker. A number of very serious questions have been raised and we should give the Government an opportunity for a response. 
Madam DEPUTY SPEAKER 
: Please be seated. 
Hon KEN SHIRLEY 
: Well no response! 
Madam DEPUTY SPEAKER 
: That is not a point of order. The question is that the motion be agreed to. 
A party vote was called for on the question  
That the Te Whanau-a-Taupara Trust Empowering Bill be now read a second time. 
Ayes 108 
Noes 7 
Bill read a second time. 
Labour 52; New Zealand National 26; New Zealand First 13; Green Party 9; United Future 8. 
ACT New Zealand 7. 
Third Reading 
Hon PAREKURA HOROMIA (Ikaroa Rawhiti) 
: 
 I move  
That the Te Whanau-a-Taupara Trust Empowering Bill be now read a third time 
. The passage of this bill through to enactment will finally allow the Te Whanau-a-Taupara Trust to operate within the realities of the 21st century in a manner that takes account of the needs of Te Whanau-a-Taupara. 
I will briefly canvass the issues that have given rise to the need for this bill. The Te Whanau-a-Taupara Trust represents a section of Te Aitanga-a-Mahaki who hold mana whenua over the Waerenga-a-hika lands. Those lands comprise approximately 245 hectares of predominantly pastoral land. The land is currently held by the Waerenga-a-hika Trust. In 1857 the land was gifted to the Crown for the purpose of establishing an education trust. The Crown gifted the land to the Bishop of New Zealand who in 1862 by deed of conveyance passed the Waerenga-a-hika lands upon trust to the Bishop of Waiapu and certain others for a school for Maori in connection with the Anglican Church. I commend this bill to the House. 
STEPHEN FRANKS (ACT NZ) 
: 
 I had just resumed my seat and there is not an awful lot to add to what I said in the previous phase of this bill which is being raced through. At this stage essentially I shall ask the members of this House who may not have had an opportunity to consider the questions that were raised earlier just what they are doing in treating so lightly a bill of this kind. 
This bill is a private bill and was reported from the Maori Affairs Committee. It relates to land that was donated by Maori to the Crown for the purpose of getting for themselves and their neighbours presumably the benefits of education. The Crown for convenience because compulsory secular education did not come into New Zealand I think for about another 15 years then gave the land back to the church which at that time was providing most education. The church at least in respect of this land—unlike so much of the land given for education purposes—vested it again in a trust which meant that it was kept for the education of the beneficiaries. So this land has an honourable history. 
It is fair to look at the source of the trust and to recognise that it should be of benefit to Te Whanau-a-Taupara. But that does not mean that we should then ignore the public interest in integrity in our tax law and our trust law and in seeing that the beneficiaries of a trust that has been going for 130 years do not find that that trust evaporates over the next few years. Unless I am very sorely mistaken—and I would be very surprised if I were—this trust does not have any of the protections that the previous trust had. This trust is now by clause 5 made a charitable trust which could be a veritable beehive for the wasps—a target for those who would love to access the tax capacity that this trust has. 
In my former years as a practising commercial lawyer if my associates and I could have found an entity like this that could parcel out private benefits that could send out benefits almost without any reflection of restricted purposes that could give donations on grounds that are so wide that there is no effective restraint and that at the same time could hold assets without paying tax on them we would have thought Christmas had arrived. It would be very surprising if for example this trust did not end up in a position where people in the Gisborne region vest assets in it on the understanding with the trustees that they will be among the discretionary beneficiaries so that they can take advantage of the fact that instead of paying tax of 39c in the dollar on the income they will pay nothing on the income. [ 
Interruption 
] There is no shame in the Maori Affairs Committee. There is a very good reason why concessions like that should be governed by the same law across the entire country. 
This concession is not justified on the grounds of culture which is usually the euphemism for some form of racism. In this case the racist clause—clause 5 which says that no matter what the trust does it is deemed to be charitable—is called “Blood ties”. There is nothing that could get closer to the early notion of race being some sort of blood connection. Race is a discredited concept in most research and in most respectable scholarship. In this bill the select committee has managed to reinstate it in its most raw form. In clause 5 this charitable trust with the justification being only what are called blood ties does not have to comply with “the public benefit requirement of the law relating to charitable trusts.” It does not have to comply with the law that every other New Zealander is subject to. If one has the right blood ties this Government says one does not pay tax. 
That is not to anyone’s advantage. It is not even ultimately to the advantage of the people in this trust because as I said it will be a honeypot or a beehive to attract the wasps. Unless something is done about this trust it will be the cutest tax avoidance device in Poverty Bay. [ 
Interruption 
] What is happening? 
Hon Parekura Horomia 
: Come up to the marae for the weekend Stephen for a bit of culture. 
STEPHEN FRANKS 
: I am getting incoherent interjections from the Minister of Maori Affairs but no answer no explanation and no reason why this provision will not become a precedent. What will the Minister say when the next whanau or hapu comes before him and says: “Why can’t we share the benefits of a tax-free trust?” What will be the answer from the Hon John Tamihere when urban Maori front up and ask why a small bunch of Gisborne Maori should benefit from a tax-free trust that does not have to confine itself to charity? What will happen? If Mr Tamihere looks at the prospect he will see that; of course a precedent is established. 
 Is this what the trustees of the Anglican Church thought would happen when they consented to the extinguishment of the existing trust and to it being vested in a new trust deed? Did they think that the rights of the trustees would include “to be paid an emolument for their services as may be fair and reasonable having regard to his or her duties and responsibilities”? Did they think that this $7 million or $8 million trust would end up with trustees who would be paid like that? It is not just reimbursement of expenses; it is emolument. Did they think that the trust for education that they had carefully guarded for 130 years would now be able to enter into any business it liked for the purpose of handing out to any beneficiary any amount that it liked for any purpose? That is the effect of this bill. Is that what we thought would happen? There is no answer now; there are interjections only when it does not matter only when they think they can get away with it in the hubbub. 
Hon Ken Shirley 
: They don’t actually understand it. 
STEPHEN FRANKS 
: Maybe they do not understand it. Well it is fairly clearly explained. The beneficiaries can have grants for developing their marae advancing their cultural activities and advancing their needs or aspirations. I wonder what sorts of aspirations they would be. Given the bill that we are looking at later tonight it might be an aspiration to pay for commercial sex; that could come into this provision. It is not confined. It does not say that that would not be a purpose within clause 4.3 of the deed. 
As for the advancement of Tauparatanga is anyone here able to tell us what Tauparatanga is? Does anyone here have the slightest idea what advancing it will mean? The sponsor of the bill might be able to say. Is there anyone here who can say what kinds of donations might be contemplated by clause 4.3.4 of the trust deed which says they need only relate to “any of the beneficiaries or in a representative capacity on behalf of the beneficiaries:”? This gets worse the closer I look at it. The donations do not even have to go to the beneficiaries; they can go to self-appointed representatives of the beneficiaries. They are donations not investments. They are not as many trust deeds would say for the betterment or advancement of the beneficiaries; they are outright grants or donations. 
Then in case we missed the first subclause 4.3.2 which states “Establish maintain and develop marae as stipulated by the Trustees in the exercise of their sole discretion:” we have another subclause that states: “Assist in meeting the costs of whanau development research and establishment or support of whanau claims:”. Then we have the making of grants or loans towards the provisions of marae. Whatever is in the minds of the Maori Affairs Committee members in recommending that this bill proceed? They must know that other whanau would give their eye teeth to have a trust like this—untaxed and able to do anything it likes. It will be a disgrace for this House to pass this bill through without giving any messages in reply. 
DAIL JONES (NZ First) 
: 
 As a matter of interest New Zealand First was not at the meeting at 4.30 on Tuesday but still apologises for having to take this call. I draw members’ attention to clause 5 in the original version of the bill which stated that “The trusts declared in the trust deed are declared to be charitable trusts for all purposes at law.” That was deleted because the Maori Affairs Committee realised that it was far too wide-ranging. 
I was not at the select committee either but I have taken the trouble to read the report. The select committee then took the advice of the Inland Revenue Department—which is the body that is most concerned to protect New Zealanders from breaches of charitable trusts—Treasury Te Puni Kokiri and the Parliamentary Counsel Office. That is set out on page 4 of the commentary on the bill. As a result of that advice the new clause 5 was inserted. There is a recommendation to ensure that for the period specified in the clause the fact that the beneficiaries under the trust deed are related by blood does not prevent the purposes of the trust declared by the trust deed from complying with the public benefit requirement of the law relating to charitable trusts. Anyone who had taken a few moments to read the bill would have worked that one out. 
Also as a lawyer familiar with trusts and charitable trusts I looked to see what happens when the trust is liquidated. This bill has special provisions for the liquidation of the charitable trust and restrictions on liquidation under the Charitable Trusts Act. So that aspect of it is covered as well. Looking at the creation of the trust and the matters that the trustees have to promote it seems to me that they come within the broad range of the Statute of Elizabeth of 1601 and I am perfectly happy to support the bill on behalf of New Zealand First. 
A party vote was called for on the question  
That the Te Whanau-a-Taupara Trust Empowering Bill be now read a third time. 
Ayes 108 
Noes 7 
Motion agreed to. 
Labour 52; New Zealand National 26; New Zealand First 13; Green Party 9; United Future 8. 
ACT New Zealand 7. 
Bill read a third time.