Treaty deals to blow books

Treaty settlements are tipped to blow another $1 billion-plus hole in the Government's books, as the cost of settling outstanding claims soars.

Senior Government ministers are known to have been stunned by figures, seen after the election, that show a rise in the cost of settling outstanding Treaty claims after a rush by the last government to wrap up deals before the election.

Although complex methods of valuing recent settlements mean there are wildly varying figures about the value of individual settlements, it is understood that the final cost of settling all claims under the Treaty settlement process is likely to be $2 billion-plus, once outstanding claims in Northland, Wairarapa and Hawke's Bay and historic claims are taken into account.

That would trigger relativity clauses built into the two big deals with Tainui and Ngai Tahu in the 1990s under National, which provided for compensation if other deals tipped the cost of settling the rest over $1billion. That compensation could be worth as much as $340 million.

The Treelords deal negotiated last year with three central North Island tribes is reported to be worth $500 million alone, and a deal under way before the election to settle a claim with tribes from the top of the South Island is believed to provide compensation seen as generous in relation to other claims.

It is understood that negotiations before the election included the possibility of handing over Kapiti Island, which is a Conservation Department reserve.

More than 1000 historic claims were lodged with the Waitangi Tribunal last year to beat a September deadline. But there was also a rush of agreements reached before the election after former deputy prime minister Michael Cullen took charge of the process to clear a backlog.

The Government has already started an inquiry into a $300 million-a-year blowout in the ACC budget and is struggling to find cost savings to fund new spending as the Treasury prepares to unveil new figures showing the Government is plunging further into debt.

- © Fairfax NZ News