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On 6 June 2025, the Waitangi Tribunal released The Takutai Moana Act 2011 Urgent Inquiry Stage 2 Report in pre-publication format. This is the second report released for the Marine and Coastal (Takutai Moana) Act Coalition Changes Urgent Inquiry (Wai 3400). The report considered claimant allegations that the Crown had breached Treaty principles through the mismanagement of the Takutai Moana Financial Assistance Scheme, which supports applicants who seek to have their customary interests in the foreshore and seabed recognised under the Marine and Coastal (Takutai Moana) Act 2011.

The claimants alleged that the Crown failed to engage adequately with Māori in their process to review and amend the scheme for the 2024–25 financial year. The claimants argued that the current scheme settings have meant that the funding available for applicants is inadequate. Other issues raised included delayed payments, the removal of funding for interested parties, and funding caps that create a one-size-fits-all model for funding allocation, regardless of the complexities of individual cases. The claimants say that they have been unable to progress applications under the Act due to current scheme settings.

While the Crown accepted that the July 2024 changes to the funding scheme were challenging for the claimants, it did not concede that there had been any breach of Treaty principles. It argued that its amendments to the scheme addressed significant cost pressures that had arisen in the previous financial year and it maintained that its process in amending the scheme was reasonable in the circumstances and that it is not obliged under the Treaty to provide full funding to applicant groups.

The Tribunal found that elements of the Crown’s process in reviewing and amending the funding scheme were flawed. The Crown should have been cognisant  earlier of the likely increase on financial pressures on the scheme, and there were significant problems with the modelling used to calculate the annual appropriation required to fund the scheme. The Tribunal found that, in its process to review and amend the scheme, the Crown failed to meet its Treaty obligations to act reasonably and in good faith and to actively protect Māori interests. This was in breach of Treaty principles.

The Tribunal further found that aspects of the current funding scheme settings were in breach of Treaty principles. By declining the additional funding required to cover the forecast costs of the 2024–25 financial year without considering the impact of this on Māori applicants, Cabinet had not conducted a Treaty-compliant balancing exercise, in breach of the principles of partnership, good government, and active protection.

Several measures were introduced to deal with the shortfall in funding, including budgeted workplans, changing the funding available for lawyers, and introducing a funding cap for each application. The Tribunal commented that the way in which the budgeted work-plan requirement was introduced created significant confusion and disruption but did not find the requirement for a workplan to be inherently inconsistent with Treaty principles. However, the Tribunal found that the Crown did not undertake a proper balancing exercise when making changes to rates of funding for lawyers, in breach of its Treaty obligation to actively protect Māori interests. The Tribunal was concerned by the ‘rudimentary’ approach taken to funding caps, noting that the caps themselves were caused by Cabinet’s decision to decline the additional funding needed.

The Tribunal found that significant prejudice had arisen due to the Crown’s Treaty breaches. The funding changes were introduced quickly, without consultation, impacting applications on the verge of hearing. Applications were delayed while budgeted workplans were awaiting approval. Research for applications was delayed, and reduced funding for research undermined the strength of applications. Funding changes also limited applicants’ access to legal representation.

To prevent similar prejudice being felt by applicants in the next financial year, the Tribunal recommended that the Crown engage meaningfully with Māori before decisions on funding are made. When making these decisions, the Crown must properly consider Māori interests and potential impacts on Māori in the wider context of the Act’s regime. In making decisions, the Crown must keep Māori informed and provide its reasoning. The Tribunal reiterated its recommendation in an earlier report that the statutory deadline for applications be removed from the Act, as this has put financial pressure on the scheme.