The local multiplier tool measures how much monetary benefit is circulated and recycled within a community.
There is a strong and pervasive commitment to growing tribal economies and the wider Māori economy. If more money circulates and recycles within a community, greater benefit and value is retained within that community, strengthen and revitalising the economy, creating employment and greater prosperity.
A multiplier tool may assist organisations to direct their contributions to economic growth within the tribal community (an Iwi may have members living outside the rohe), or within a particular rohe (geographical area).
Using a multiplier assessment can help identify
How much economic growth they are contributing to within the community
- how much economic growth and activity is being stimulated within the tribal community to contribute to greater vitality and prosperity within the Iwi or Māori community
- how much economic growth and activity is being stimulated within the rohe to highlight the benefit Iwi and Māori economies create for the wider community.
By way of example:
Hemi is a young chap living in Riverton (the deep South). For his birthday, Aunty Mere gives him $50 to spend. Hemi ends up in Dunedin for a whānau event and buys $10 worth of iTunes on a prepaid card. When he gets back to Riverton, he (being a generous chap) buys flowers for his mum for $40. The florist who he buys the flowers from, can happily wander the road to get a haircut, where she spends $30 (80% of the price of the flowers). The hairstylist wants a kai after cutting hair, and shouts her tane to lunch at the RSA which costs $20 and saves the rest for petrol for a hui she wants to go to in town. As a result of the $50 Aunty Mere gave Hemi, $90 has circulated within Riverton because it was recycled and spent within the local community.
The same principle can apply to building tribal and Māori economies, through employing tribal members or contracting whānau SMEs and other businesses.
While determining how much, and in what circumstances organisations should concentrate on recycling money within a community, a practical tool can help measure how much benefit is being recycled within communities and as a result help create targets and track performance.
The basic model for measuring how much benefit is being recycled and retained within communities is:
|The formula is:
(II + R1 + R2) = multiplier value
|II – initial income (ie the annual income of the organisation).
R1 – the amount of initial income spent within the community, including salaries to community members or goods and services purchased from
R2 – the amount of R1 that is spent within the same community. This information is collected through a survey that asks staff and companies how much they spend within the community.
Multiplier value – this unit determines how much ‘multiplied benefit’ is recycled within the community. The amount of economic growth and activity that the organisation contributes within the community.
It is used in the following way:
For Example: The organisation has $100 000 Income multiplied by 1.8 equals $180 000 generated within the community.
Using the Tool
The multiplier tool could be used to:
Set Targets For Tribal Economic Growth
Once a baseline has been created by completing one evaluation, tribal governors could create targets for how much economic activity and growth the commercial operations should contribute to the tribal or Māori economy each year.
Being able to articulate the amount of growth stimulated within the tribal community could be a valuable part of reporting to tribal members on the activities of the commercial operations.
Being able to articulate the amount of economic growth stimulated within the wider community could help with strengthening the relationship between the organisation and wider community by providing a practical way to express some of the contributions the Iwi/community makes to the quality of life in the wider community.
A practical guidebook, with a comprehensive overview of the multiplier tool and practical examples of survey tools is available at www.neweconomics.org/publications/money-trail