The government's proposal to scale back the responsibilities for Te Arawhiti - the Office for Māori-Crown Relations - is a step backwards, the Labour leader says.
Crown-Māori Relations Minister Tama Potaka announced on Tuesday the government was "clarifying the respective functions of Te Arawhiti and Te Puni Kōkiri", the Ministry for Māori Development.
Potaka said Te Arawhiti will remain a departmental agency and "continue its core role of progressing long standing Treaty of Waitangi settlements and Takutai Moana applications".
Te Puni Kōkiri will pick up other responsibilities like monitoring and reporting on the Crown's implementation of Treaty settlements, and leading post-settlement relationships.
Labour leader Chris Hipkins told Morning Report Te Arawhiti was set up in the post-Treaty settlement space because of the ongoing obligations of the Crown and government to maintain an ongoing relationship with iwi post settlement.
"There's huge opportunity in that for New Zealand as a whole, not just for those iwi and for Māori, but for the rest of the country as a whole, the Māori economy is growing enormously in the post-Treaty settlement era and we should be making sure that the whole country's benefiting from that and that we're also avoiding entering into things that create contemporary Treaty grievances."
Labour leader Chris Hipkins on govt plans to scale back Te Arawhiti
Hipkins said Te Arawhiti was able to advise on current decision-making in government and how lessons learnt from the settlement process could be applied to current decision-making so mistakes of the past were not repeated.
"The current government seems to be repeating past mistakes all over the show at the moment," he said.
Hipkins said winding back Te Arawhiti at the "very time" the government should be listening to them was "indicative" of its attitude of all things to do with Māori.
He said the government should be wanting to draw on the knowledge, information, insight and experience Te Arawhiti has of the settlement process to help inform the relationship with iwi on an ongoing basis.
Wanting to narrow down its scope was "unfortunate".
PSA critical of govt's decision to diminish Te Arawhiti
The Public Service Association was concerned about how Te Arawhiti would be split up, and whether its cultural values would survive.
The PSA's Te Kaihautū Māori, Janice Panoho, told Morning Report she understood the Ministry of Justice would take on some of Te Arawhiti's other functions.
But Panaho said it was a confusing plan which risked undermining the progress Te Arawhiti had made.
"It's not clear at this stage how they're going to dissolve those services and where those services are actually going to go."
Panaho said the PSA lacked understanding and reasons behind the change.
"We're really quite concerned about how it's going to be delivered."