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Notes to the Forecast Financial Statements

NOTE 19: Provisions
  2007 2008 2008 2009 2010 2011 2012
  Actual

Previous
Budget

Forecast Forecast Forecast Forecast Forecast
  $m $m $m $m $m $m $m
Provision for Kyoto 704 557 482 482 482 482 482
Provision for ETS credits 618 685 492 121
Provision for National Provident Fund guarantee 771 805 780 780 780 780 780
Provision for employee entitlements 1,828 1,621 1,738 1,747 1,768 1,782 1,793
Other provisions 1,257 867 1,045 1,084 1,126 1,142 1,163
Total Provisions 4,560 3,850 4,045 4,711 4,841 4,678 4,339
By source              
Core Crown 2,537 2,267 2,353 2,862 2,978 2,833 2,519
Crown entities 1,195 1,042 1,214 1,220 1,236 1,243 1,247
State-owned enterprises 852 757 610 652 660 644 635
Inter-segment eliminations (24) (216) (132) (23) (33) (42) (62)
Total Provisions 4,560 3,850 4,045 4,711 4,841 4,678 4,339
Analysis of Provision for Kyoto              
Opening balance 656 557 704 482 482 482 482
Change in price of carbon (20) 145
Change in net projected emission units 68 (367)
Closing balance 704 557 482 482 482 482 482

Analysis of Provision for ETS credits

The Emissions Trading Scheme (ETS) was established to encourage reduction in greenhouse gas emissions. The ETS creates a limited number of tradable units (the NZ Unit) which the Government can allocate freely or sell to entities. The allocation of NZ Units creates a provision (and an expense if allocated for free). The provision is reduced, and revenue recognised, as NZ Units are surrended to the Crown by emitters. Emitters can also use international Kyoto units to settle their emission obligation, which will occur where emissions exceed the number of allocated NZ units.

 

NOTE 19: Provisions (continued)
  2007 2008 2008 2009 2010 2011 2012
  Actual

Previous
Budget

Forecast Forecast Forecast Forecast Forecast
  $m $m $m $m $m $m $m
The ETS impact on the fiscal forecast is as follows:              
Revenue 131 289 716 894
Expenses 749 356 523 523
OBEGAL (618) (67) 193 371
Provision for ETS credits 618 685 492 121
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