Environment Sector - Information Supporting the Estimates of Appropriations for the Government of New Zealand for the Year Ending 30 June 2010

Purpose of Information Supporting the Estimates#

The Information Supporting the Estimates provides members of Parliament with information on expected performance to:

• support their examination of the appropriations and other authorities requested by the Government in the first Appropriation Bill for the forthcoming financial year, and
• provide a base against which they can later assess the actual performance of each individual department and Office of Parliament over that financial year.

The Information Supporting the Estimates is organised into 10 volumes by sector, each of which covers one or more Votes. The scope of each sector and the allocation of Votes to a sector reflect a balancing of three desired characteristics - namely that each volume should, where possible:

• reflect natural sectors
• keep together Votes administered by the same department, and
• keep together Votes allocated to a particular select committee of the House of Representatives for examination.

The number of sectors and coverage of each sector is set in consultation with the Finance and Expenditure Committee. The 10 sectors are:

• Economic Development and Infrastructure Sector
• Education and Science Sector
• Environment Sector
• External Sector
• Finance and Government Administration Sector
• Health Sector
• Justice Sector
• Māori, Other Populations and Cultural Sector
• Primary Sector
• Social Development and Housing Sector.

Votes and Departments in Each Sector#

Purpose and Nature of Appropriations#

An appropriation is a statutory authority from Parliament allowing the Crown or an Office of Parliament to incur expenses or capital expenditure.

Neither the Crown nor an Office of Parliament can legally incur any expense or capital expenditure - as those terms are defined in the Public Finance Act 1989 (PFA) - unless it is expressly authorised by or under an Act of Parliament.

Limits Created by Appropriations#

Each appropriation is allocated to, and managed as, one of six types of appropriation.

Each appropriation has a defined scope that limits the uses or activities for which the expenses or capital expenditure can be incurred. The scope should be sufficient on its own to establish the nature and extent of the authority to incur expenses or capital expenditure. The wording of the appropriation scope should achieve the balance between being sufficiently precise to act as an effective constraint against non-authorised activities and not so specific that it inadvertently limits activity intended to be authorised.

In most cases an appropriation also limits the amount of expenses or capital expenditure that can be incurred, and the time period within which those expenses or capital expenditure can be incurred.

Aside from the very limited exclusions provided for in the PFA, the amount of expense or capital expenditure authorised by an appropriation is measured in accordance with generally accepted accounting practice.

As generally accepted accounting practice does not normally treat GST as an expense, appropriation amounts also generally exclude GST. Prior to 2005/06, however, appropriations included applicable GST. All prior-year appropriation data, such as in the Summary of Trends table in the Estimates and the Summary of Financial Activity Table for each Vote in Information Supporting the Estimates - have been adjusted to exclude GST to allow appropriate comparison.

Responsibility for Appropriations#

Each appropriation is the responsibility of a designated Minister, who controls the right to use that appropriation within the limits authorised by Parliament. A department is also assigned to administer that appropriation in accordance with the Minister's wishes concerning its use.

A Vote is a group of appropriations (and can be a single appropriation) administered by a single department. Different appropriations within a Vote may be the responsibility of different Ministers.

Types of Appropriation#

The PFA provides for six types of appropriation. Four appropriation types authorise the incurring of expenses; one type authorises the incurring of capital expenditure; and the remaining type authorises both.

These appropriation types can be further differentiated by whether the expenses or capital expenditure are departmental or non-departmental transactions.

Types of Output Expense Appropriations#

A number of variations are possible for output expense appropriations. In particular, the constraint on the amount of expense that can be incurred is not always a fixed amount; and an output expense appropriation can cover more than one class of outputs.

Appropriation Period#

The length of the appropriation period affects how appropriations are presented in the Estimates and Supplementary Estimates. Three kinds of appropriation can be distinguished on the basis of period - annual and multi-year (as referred to in the above table on types of output expense appropriations), and permanent:

• Annual Appropriations - Most appropriations listed in the Estimates and Supplementary Estimates allow expenses or capital expenditure to be incurred only during a particular financial year. The annual amounts, for which parliamentary authority is normally sought, are shown in bold type in Details of Annual and Permanent Appropriations in the Estimates and Supplementary Estimates for each Vote. The amounts for RDAs and annual DDAs are forecasts only, and so are not shown in bold type.
• Multi-Year Appropriations (MYAs) - The PFA also permits appropriations that allow expenses or capital expenditure to be incurred during a specified period that spans the whole or parts of more than one financial year, but no more than five financial years. The details of each MYA, including its commencement date and expiry date, are specified in Details of Multi-Year Appropriations in the Estimates and Supplementary Estimates for relevant Votes.
• Permanent Appropriations (sometimes referred to as permanent legislative authorities or PLAs) -Permanent appropriations are authorised by legislation other than an Appropriation Act and continue in effect until revoked by Parliament. Generally the authorising legislation will impose limits on the scope of the appropriation and not its amount. For those appropriations that with limits set in cash terms, section 11(2) of the Public Finance Act 1989 requires that they be reported on an accrual basis. The usual legislative wording allows for expenses or capital expenditure to be incurred for the purpose specified in the legislation “without further appropriation than this section”. Details of permanent appropriations are included in Details of Annual and Permanent Appropriations in the Estimates and Supplementary Estimates for each Vote for completeness, though the amount specified is a forecast rather than a limit. The amounts of permanent appropriations are therefore not shown in bold type. The scope of a permanent appropriation will reference the relevant section of the authorising legislation.

Guide to Reading Information Supporting the Estimates#

The Information Supporting the Estimates for each of the 10 sectors comprises five components, each of which is briefly described, below.

1 Sector Overview Information#

The first component of the Information Supporting the Estimates may include a statement, agreed by all Ministers responsible for appropriations in each Vote included in the sector, that presents an overview of the sector and a high-level summary of the government's expectations and priorities. The Overview also includes Ministerial and Chief Executive Statements of Responsibility for the information provided in the Information Supporting the Estimates.

2 Performance Information Relating to Appropriations in Each Vote#

The second component of the Information Supporting the Estimates presents performance information relating to each appropriation.

The title pages for each Vote specify the Minister(s) responsible for existing and proposed appropriations in the Vote, and the Responsible Minister for the department. The performance information meets the requirements of sections 15 and 41(1)(e) of the PFA and contains up to six parts. If particular information is not applicable to the Vote or a specific appropriation or type, or is otherwise unavailable, the relevant heading is not included.

Part 1 - Summary of the Vote#

The Summary of the Vote comprises:

• Part 1.1 Overview of the Vote - A plain-language summary of the focus of the appropriations through a brief explanation of the Vote. The Overview also appears at the start of the Vote in the Estimates.
• Part 1.2 High-Level Objectives of the Vote - The objectives for the Vote presented through links and relationships and high-level priorities and outcomes to which they contribute. Where applicable, priorities and outcomes are drawn from the priorities and desired outcomes and published strategy documents. Links are also made to specific government strategies. Links may also be made to specific Government objectives.
• Part 1.3 Trends in the Vote - A presentation of the actual and estimated trends in the Vote, comprising:
  • Summary of Financial Activity - A table showing financial information over the preceding five years (actual, budgeted or estimated actual), the current year (Budget) and the following three years (estimated) for the type of appropriations and Crown revenue and capital receipts.
  • New Policy Initiatives - A table showing how new initiatives (and the associated expenses or capital expenditure) are allocated to appropriations in the Vote. References are included where appropriations in other Votes are affected by the same initiative.
  • Analysis of Significant Trends - High-level analysis of appropriations and Crown revenue and capital receipts by type over the nine financial years covered by the Summary of Financial Activity table, explanations of significant changes and may also contain graphical presentations.

• Part 1.4 Reconciliation of Changes in Appropriation Structure - a table providing a reconciliation and explanation of any changes in the structure or classification of appropriations made in the Budget year. These changes are restated for the previous financial year to facilitate comparison.

Part 2 - Details and Expected Performance for Output Expenses#

This Part provides further detail about appropriations and expected performance for output expenses.

• Part 2.1 Departmental Output Expenses - Intended impacts, outcomes and objectives are presented for departmental output expense appropriations in the Vote. This is followed by information on each appropriation, including its scope, a table showing expenses and revenue (distinguishing the revenue sources between the Crown and others), a statement of reasons for change in the appropriation (if material), and tables detailing performance measures and standards for significant aspects of expected output performance, any conditions on use of appropriation, any memorandum accounts (which record accumulated surpluses and deficits incurred in the provision of outputs on a full cost-recovery basis), and any current and past policy initiatives affecting the appropriation.
  • Information on impacts and outcomes or objectives to which the outputs contribute is provided. Further information on the relationships between outputs, impacts, and outcomes or objectives is outlined in Part 1.2 and the Statement of Intent. Conditions on use include administrative criteria and processes contained in legislation, regulation and Government decisions, which may be reference in scope statement or performance measures. The current and past policy initiatives tables provides a five-year history of announced initiatives that impact on the Budget year, the preceding year and the following three years.
  • For MCOA, an explanation is provided as to why the classes of outputs have been grouped under a single appropriation, and the scope statement, expenses and revenue, and performance information is presented for each output class.
  • Information provided for MYAs enables the original appropriation to be reconciled to the adjusted level if changes have been approved or are proposed, and the balance remaining to be derived taking account of actual or estimated expenses incurred to date.
  • The appropriation scope, expenses and revenue, and output performance measures and standards match information required to be included in a department's Statement of Forecast Service Performance with respect to departmental output expense appropriations used by the department.
• Part 2.2 Non-Departmental Output Expenses - This sub-part contains comparable information to that presented in Part 2.1 on departmental output expense appropriations. The main differences are that details of third parties’ other revenue is not relevant and a summary of service providers is included.
  • The service providers table shows Crown entities and non-governmental organisations providing outputs funded through the Vote, and (where applicable) the mechanism for reporting actual performance to Parliament and the expiry of the Government's resource commitment. The reporting mechanisms are typically an entity's annual report or a report by the responsible Minister required by section 32A of the PFA. Where the provider is a Crown entity that is required to produce a Statement of Intent, its annual report may contain more detailed performance information at the output class or output level. ‘Section 32A' reports include a statement of service performance in relation to the appropriation.

Part 3 - Details for Benefits and Other Unrequited Expenses#

Part 3 provides performance information about appropriations for benefits and other unrequited expenses incurred by the Crown. No departmental transactions arise under this appropriation type.

• Part 3.2 Non-Departmental Benefits and Other Expenses - Information on each appropriation includes impacts and outcomes intended to be achieved, a scope statement, expense components, reasons for material changes, any conditions of use, and details of any current and past policy initiatives over the five years up to and including the Budget year.

Part 4 - Details for Borrowing Expenses#

This Part provides detail about appropriations for borrowing expenses. No departmental borrowing expense appropriations exist at present.

• Part 4.2 Non-Departmental Borrowing Expenses - The set of performance information is the same as that for non-departmental benefits and other expenses, except that conditions on use are no specified.

Part 5 - Details and Expected Results for Other Expenses#

Part 5 provides detail about appropriations for:

• Part 5.1 Departmental Other Expenses - It is uncommon for this category of appropriation to be utilised. In the few cases where it occurs, the performance information is the same as that for non-departmental other expense appropriations except for a summary of reporting mechanisms.
• Part 5.2 Non-Departmental Other Expenses- Information on other expenses incurred by the Crown covers intended impacts and outcomes, appropriation scope, expenses analysed by component, reasons for material changes in the appropriation, expected results and standards, any conditions on use, any current and past policy initiatives, and a summary of mechanisms for reporting actual performance to Parliament.

Part 6 - Details and Expectations of Capital Expenditure#

This Part provides further details about appropriations for capital expenditure.

• Part 6.1 Departmental Capital Expenditure - The purchase or development of assets by a department is made under a permanent appropriation authorised by section 24(1) of the PFA. Capital expenditure is defined in section 2 as the cost of assets acquired or developed, including tangible, intangible or financial assets, and any ownership interest in entities, but excluding inventories. The appropriation appears in the Vote that contains appropriations belonging to the department's Responsible Minister.
  • Information is provided on intended impacts and outcomes of the appropriation, its scope, expenditure analysed by standard asset categories, reasons for material changes in the appropriation, and expected results. The scope statement is in a standard form for all departments. The performance information relates to the department as a whole and is not limited to any specific capital injection.
• Part 6.2 Non-Departmental Capital Expenditure - Performance information for capital expenditure incurred by the Crown is the same as that for departmental capital expenditure except for not detailing asset categories and the addition of any conditions on use of the appropriation, any current and past policy initiatives, and a summary of the mechanism for reporting to Parliament.
  • The scope statement indicates the form of interest or asset acquired by the Crown, such as a capital injection (equity), loan or shares.

The following table summarises the performance information that is required for a ‘standard' appropriation in each sub-part.

Information on reasons for change, conditions on use, current and past policy initiatives, and reporting mechanisms appears where applicable or material. Memorandum accounts are relevant only in Part 2. Some variations exist for non-standard appropriations, including MCOAs in Parts 2.1 and 2.2 and MYAs in Parts 2.2, 5.2 and 6.2. Furthermore performance information may not be available for some appropriations.

3 Statement of Forecast Service Performance of Departments#

The third component of the Information Supporting the Estimates of Appropriations comprises the Statement of Forecast Service Performance for each department included in the sector, by reference to material already set out in Part 2.1 of Votes containing appropriations proposed to be used by the department.

4 Forecast Financial Statements of Departments#

The fourth component of the Information Supporting the Estimates begins with a Statement of Common Accounting Policies applicable to all departments. The forecast financial statements for the forthcoming financial year for each department covered by the sector includes a:

• Statement of Forecast Comprehensive Income
• Statement of Forecast Changes in Taxpayers' Funds
• Forecast Statement of Financial Position
• Statement of Forecast Cash Flows
• Statement of Significant Assumptions.

Each department will include a Statement of Entity- Specific Accounting Policies detailing policies for any matters not addressed by the Statement of Common Accounting Policies (such as a “going concern” statement) or where its policies are more specific than the common policies (such as capitalisation thresholds and estimated useful lives of individual classes of assets). Notes to the Financial Statements provide additional details to assist interpretation of the accounts and to meet disclosure requirements outlined in legislation and accounting standards.

5 Statements of Intent of Departments#

The final component of the Information Supporting the Estimates presents the Statements of Intent of the departments covered by each sector. These statements contain the information required by section 40 of the PFA. They focus on the medium term and generally cover:

• Nature and scope of the department's functions - A brief high-level description of the department's functions, addressing its role(s) and purpose and how it intends fulfilling them.
• Strategic direction - impacts and outcomes - A brief high-level overview of the department's strategic direction covering both the impacts and outcomes the department is seeking to achieve (or contribute to) and the strategic environment in which the department operates through, in particular, its responses to the government's priorities.
• Operating intentions - Information that describes how the department intends to achieve (or contribute to) those desired impacts and outcomes through its operations. This section should also include the main measures and standards the department will use to assess and demonstrate what it has achieved, including measures of outcome achievement, impact and cost effectiveness.
• Managing in a changeable operating environment - Information on the risks to achievement of the desired outcomes and priorities, and the department's mitigation strategies.
• Assessing organisational health and capability - The department's intentions for building and strengthening its internal capability, including its responses to the development goals for the State Services and its strategic approach to managing its asset base and forecast capital expenditure in the medium term. If capital expenditure is significant, it is in a separate section.
• Additionalinformationand statutory reporting requirements - As required either by the responsible Minister or Minister of Finance, or by specific legislation.

Terms and Definitions#

The table below contains terms that are used in the Supplementary Estimates and the Information Supporting the Supplementary Estimates.

Useful Links#

The suite of Budget 2009 documents can be accessed in the Budgets section of the website: www.treasury.govt.nz/budget/2009. Documents providing guidance on the PFA and the public sector financial management system can be accessed in the Public Finance Overviews section of the Treasury's website: www.treasury.govt.nz/publications/guidance/publicfinance.

Sector Overview#

Ministerial Statements of Responsibility#

Each of us is satisfied that the information on future operating intentions provided by our respective departments included in the Information Supporting the Estimates for the Environment Sector is in accordance with sections 38 and 41 of the Public Finance Act 1989 and is consistent with the policies and performance expectations of the government.

Hon Dr Nick Smith
Responsible Minister for the Ministry for the Environment
22 April 2009

Hon Tim Groser
Responsible Minister for the Department of Conservation
22 April 2009

Chief Executive Statements of Responsibility#

Ministry for the Environment#

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Environment Sector relating to the Ministry for the Environment and for the Votes for which the Ministry for the Environment is the administering department. Specifically, this information is contained in the Ministry for the Environment's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2009/10 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

Dr Paul Reynolds
Secretary for the Environment
Ministry for the Environment
22 April 2009

Rochelle Davis
Chief Financial Officer
Ministry for the Environment
22 April 2009
Counter-signed

Department of Conservation#

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Environment Sector relating to the Department of Conservation and for the Vote for which the Department of Conservation is the administering department. Specifically, this information is contained in the Department of Conservation's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2009/10 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

Alastair Morrison
Director-General
Department of Conservation
22 April 2009

Christeen Mackenzie
Chief Financial Officer
Department of Conservation
22 April 2009
Counter-signed

Parliamentary Commissioner for the Environment#

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Environment Sector relating to the Parliamentary Commissioner for the Environment and for the Vote for which the Parliamentary Commissioner for the Environment is the administering Office. Specifically, this information is contained in the Parliamentary Commissioner for the Environment's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2009/10 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

Dr Jan Wright
Parliamentary Commissioner for the Environment
22 April 2009

Sarah Clark
Senior Manager - Capability and Communications
Parliamentary Commissioner for the Environment
22 April 2009
Counter-signed

Performance Information for Appropriations Vote Climate Change#

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister for Climate Change Issues (M12)

ADMINISTERING DEPARTMENT: Ministry for the Environment

MINISTER RESPONSIBLE FOR MINISTRY FOR THE ENVIRONMENT: Minister for the Environment

Part 1 - Summary of the Vote#

Part 1.1 - Overview of the Vote

The Minister Responsible for Climate Change Issues is responsible for appropriations in Vote Climate Change for the 2009/10 financial year covering the following:

• A total of nearly $10 million for the development of a national Carbon Accounting System.
• A total of over $471 million for the allocation of New Zealand emission units to the New Zealand economy.
• A total of over $14 million for international negotiations under the Kyoto Protocol, development and implementation of the Emissions Trading Scheme and other climate change policy measures.
• A total of $300,000 for policy advice on energy efficiency and conservation issues.
• A total of $227,000 for New Zealand's contribution to the United Nations Framework Convention on Climate Change.
• A total of $300,000 for New Zealand's contribution to the Climate Change Development Fund to support international projects addressing climate change impacts.
• A total of over $3 million for the issue of New Zealand Assigned Amount Units (NZ AAU) to Permanent Forest Sink Initiatives participants.
• A total of nearly $4 million for the purchase of Projects to Reduce Emissions (PRE) emission units by the Crown from the PRE portfolio.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

The output expenses in Vote Climate Change will contribute to the Government's overarching goal of economic transformation with a strong focus on environmental sustainability. This vote supports Government's engagement with businesses and community groups and aims to reduce New Zealand's Greenhouse Gas emissions and meet international obligations under the United Nations Framework Convention on Climate Change (UNFCCC) and Kyoto Protocol.

Government Priorities and Outcomes - Links to Appropriations#

Part 1.3 - Trends in the Vote#

Summary of Financial Activity#

New Policy Initiatives#

Analysis of Significant Trends#

Analysis of Significant Trends

Source: Ministry for the Environment

Part 1.4 - Reconciliation of Changes in Appropriation Structure#

Explanations of the reasons for changing the appropriation structure are noted in the details of each appropriation in Parts 2-6.

Services for Local Government MCOA (M49)#

Scope of Appropriation#

Explanation for Use of Multi-Class Output Expense Appropriation#

Both outputs contribute to the effective governance and support for New Zealand's Local Government sector.

Expenses and Revenue#

Reasons for Change in Appropriation#

The decrease in this appropriation is largely due to ongoing savings in the administration of the National Dog Database, dog safety education, and promotion costs for the rates rebate scheme.

Output Performance Measures and Standards#

Note 1 - Ratings used in all Ministerial Satisfaction Surveys are: Very Good, Good, Satisfied, Poor, Very Poor.

Note 2 - Activity information relates to output volume measures that are demand driven and therefore outside the Department's control.

Conditions on Use of Appropriation#

Memorandum Account#

Current and Past Policy Initiatives#

Part 3 - Details for Benefits and Other Unrequited Expenses#

Part 3.2 - Non-Departmental Benefits and Other Unrequited Expenses#

Intended Impacts, Outcomes and Objectives

Rates Rebate Scheme (M49)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in this appropriation is due to a forecast increase in CPI indexed assistance with rates for low-income residential ratepayers.

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Part 5 - Details and Expected Results for Other Expenses#

Part 5.2 - Non-Departmental Other Expenses#

Intended Impacts, Outcomes and Objectives

Chatham Islands Council (M49)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in this appropriation is due to a higher level of funding for the Chatham Islands waste management programme in 2009/10.

Expected Results

Current and Past Policy Initiatives

Depreciation (M49)#

Scope of Appropriation#

Expenses#

Tuwharetoa Maori Trust Board PLA (M49)#

Scope of Appropriation#

Expenses#

Conditions on Use of Appropriation#

Current and Past Policy Initiatives#

Reporting Mechanisms#

The above table indicates the mechanisms to be used for reporting actual performance for each non-departmental other expenses appropriation.

Part 6 - Details and Expected Results for Capital Expenditure#

Part 6.2 - Non-Departmental Capital Expenditure#

Intended Impacts, Outcomes and Objectives

Capital Investments - Lake Taupo (M49)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The decrease in this appropriation is due to a capital transfer from 2007/08 to 2008/09 for undertaking capital works at Lake Taupo.

Performance Information for Appropriations Vote Parliamentary Commissioner for the Environment#

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Speaker of the House of Representatives (M78)

ADMINISTERING DEPARTMENT: Parliamentary Commissioner for the Environment

MINISTER RESPONSIBLE FOR PARLIAMENTARY COMMISSIONER FOR THE ENVIRONMENT: Speaker of the House of Representatives

Part 1 - Summary of the Vote#

Part 1.1 - Overview of the Vote

The Speaker of the House of Representatives is responsible for appropriations in Vote Parliamentary Commissioner for the Environment for the 2009/10 financial year covering the following:

• a total of just over $2.700 million for providing reports and advice to the House of Representatives.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

Objectives of the Vote#

The objective of the Commissioner and her staff is to contribute toward the maintenance and improvement of the natural and physical environment. Many agencies and individuals share this goal. It is the way in which we seek to achieve this goal that defines our mission; that is, through influencing decisions.

The Commissioner's role as an Officer of Parliament gives us a unique opportunity to provide Parliament with independent advice in its consideration of any matters that may impact on the quality of the environment. Members of Parliament are the primary group of decision makers we aim to influence.

The Commissioner is required to deliver one output, Reports and Advice. This output is produced through four areas of activity:

• working with Parliament through advice to select committees and inquiries for the House of Representatives, and through effectiveness, influence and accountability reporting
• reviewing and investigating through environmental investigations and targeted inquiries
• communicating and informing by monitoring environmental matters, engagement with stakeholders, presentation of investigations, and interaction with the media
• encouraging preventive measures and remedial actions for the protection of the environment, through the above activities.

Part 1.3 - Trends in the Vote#

Summary of Financial Activity#

Analysis of Significant Trends#

The departmental appropriations in Vote Parliamentary Commissioner for the Environment, which are detailed in the Summary of Financial Activity above, show significant changes discussed briefly below.

In 2005, an increase of $73,000 for 2004/05 was approved to enable the Commissioner to undertake a study tour and to reprint two recent major investigation reports. $355,000 was approved for 2005/06 and outyears to support the restoration of investigative capacity and to further expand the Commissioner's communication capacity.

In 2006, an increase of $24,000 in 2005/06, $25,000 in 2006/07 and $26,000 from 2007/08 was approved to enable the Commissioner to cover the costs of a retirement scheme for office staff. $89,000 was approved to meet some of the costs in relation to a programme of events to mark the 20th anniversary of the Commissioner's establishments in 2006/07. Parliament also approved, for 2006/07 and outyears, $45,000 to improve capacity with respect to information and records management.

In 2007, an increase of $206,000 for 2006/07 was approved for costs towards the appointment of the new Commissioner; contracted background papers for a sustainable development project; a project arising from a Protected Disclosures Act enquiry; and a finance contractor. An increase of $100,000 was approved for 2007/08 and outyears to maintain the capability and capacity of the office's investigation team.

In 2008 an operating capital swap resulted in a decrease of $450,000 for 2008/09 only; outyear funding for operating expenses remained unchanged at $2.490 million.

In 2009 there is no increase in departmental appropriation.

Part 2 - Details and Expected Performance for Output Expenses#

Part 2.1 - Departmental Output Expenses#

Intended Impacts, Outcomes and Objectives

Reports and Advice (M78)

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Current and Past Policy Initiatives

Part 5 - Details and Expected Results for Other Expenses#

Part 5.1 - Departmental Other Expenses#

Remuneration of the Parliamentary Commissioner for the Environment PLA (M78)

Scope of Appropriation

Expenses

Part 6 - Details and Expected Results for Capital Expenditure#

Part 6.1 - Departmental Capital Expenditure#

Intended Impacts, Outcomes and Objectives

Parliamentary Commissioner for the Environment - Capital Expenditure PLA (M78)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

There is a decrease in appropriation of $450 due to the completion of renovations in 2008/09.

Statements of Forecast Service Performance#

The Statements of Forecast Service Performance of agencies included in the Environment Sector comprise the service performance information for all departmental output expense appropriations that are proposed to be used by those agencies. In this context, service performance information comprises the scope, expenses and revenue, and output performance measures and standards for each class of outputs within those departmental appropriations, as set out in Part 2.1 of the Performance Information for Appropriations in Each Vote.

The following table identifies the classes of outputs incorporated in the Statement of Forecast Service Performance for each department and Office of Parliament in the Environment Sector.

Forecast Financial Statements of Departments#

Statement of Common Accounting Policies#

These accounting policies have been applied in the forecast financial statements of all departments and Offices of Parliament except as outlined in the statement of entity-specific accounting policies for individual departments or Offices of Parliament.

These forecast financial statements are prepared in accordance with section 41(1)(a)-(f) of the Public Finance Act 1989. The purpose of the forecast financial statements is to facilitate Parliament's consideration of appropriations for, and planned performance of departments and offices of Parliament. Use of this information for other purposes may not be appropriate. It is not intended that these forecast financial statements be updated subsequent to publication.

Statement of Compliance

These forecast financial statements for the year ended 30 June 2009 comply with FRS-42 Prospective Financial Statements.

Specific Accounting Policies#

The accounting policies set out below have been applied consistently to all periods presented in these statements. These statements have been prepared on a going-concern basis. The measurement base applied is historical cost modified by the revaluation of certain assets and liabilities as identified in this statement of accounting policies.

The accrual basis of accounting has been used unless otherwise stated. These financial statements are presented in New Zealand dollars, which is the entity's functional currency. All financial information presented has been rounded to the nearest thousand.

Judgements and Estimations#

The preparation of forecast financial statements in conformity with FRS-42 requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and these variations may be material.

Revenue#

Revenue is derived through the provision of outputs to the Crown and from services to third parties. Revenue is recognised in the forecast statement of financial performance when earned.

Leases#

Operating Leases

Where substantially all of the risks and rewards of ownership are retained by the lessor, leases are classified as operating leases.

Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.

Finance Leases

Leases which effectively transfer to the department substantially all the risks and rewards incidental to ownership of the leased items are classified as finance leases. These are capitalised at the lower of the fair value of the asset or the present value of the minimum lease payments. The leased assets and the corresponding lease liabilities are recognised in the statement of financial position. The leased assets are depreciated over the period the department is expected to benefit from their use. The interest expense component of finance lease payments is recognised in the statement of financial performance.

Borrowing Costs#

Borrowing costs are recognised as an expense when incurred.

Property, Plant and Equipment#

Property, plant and equipment, other than land and buildings, is stated at cost less accumulated depreciation and impairment losses. Land and buildings are stated at fair value as determined by an independent registered valuer. Fair value is determined using market-based evidence. Land and buildings are revalued with sufficient regularity to ensure that carrying value is not materially different from fair value at the end of the reporting period. Additions between revaluations are recorded at cost. Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Depreciation#

Depreciation is provided on a straight-line basis so as to allocate the cost [or valuation] of an item of property, plant and equipment, less any estimated residual value, over its estimated useful life.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Leasehold improvements are capitalised and the cost is amortised over the unexpired period of the lease or the estimated useful life of the improvements, whichever is shorter.

Items under construction are not depreciated. The total cost of a capital project is transferred to the appropriate asset class on its completion and then depreciated.

Intangible Assets#

Intangible assets with finite useful lives (such as computer software) are recorded at cost less accumulated amortisation and impairment losses.

Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Amortisation is charged to the statement of financial performance on a straight-line basis over the estimated useful life of the asset.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Intangible assets with indefinite useful lives are not amortised, but are tested at least annually for impairment.

Where there is an active market for an intangible asset, the asset is recorded at a revalued amount, being fair value less any subsequent accumulated amortisation and accumulated impairment losses.

Cash and Cash Equivalents#

Cash includes cash on hand and funds on deposit with banks with a maturity of 3 months or less from date of acquisition.

Debtors and Other Receivables#

Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate, less impairment charges. Allowances for estimated irrecoverable amounts are recognised when there is objective evidence that the asset is impaired.

Inventories#

Inventories held for sale or use in the production of goods and services on a commercial basis are recorded at the lower of cost and net realisable value. The cost of purchased inventory is determined using the weighted average cost method.

Inventories held for distribution for public benefit purposes are recorded at cost (calculated using the weighted average cost method) adjusted when applicable for any loss of service potential. Where inventories are acquired at no cost, or for nominal consideration, the cost is the current replacement cost at the date of acquisition.

Employee Entitlements#

Pension Liabilities

Obligations for contributions to defined contribution retirement plans are recognised in the statement of financial performance as they fall due.

Other Employee Entitlements

Employee entitlements to salaries and wages, annual leave, sick leave, long service leave, retiring leave and other similar benefits are recognised in the statement of financial performance when they accrue to employees. Employee entitlements to be settled within 12 months are reported at the amount expected to be paid. Long-term employee entitlements are reported at the present value of the estimated future cash outflows.

Termination Benefits

Termination benefits are recognised in the statement of financial performance only when there is a demonstrable commitment to either terminate employment prior to normal retirement date or to provide such benefits as a result of an offer to encourage voluntary redundancy. Termination benefits to be settled within 12 months are reported at the amount expected to be paid. Other termination benefits are reported at the present value of the estimated future cash outflows.

Onerous Contracts#

Where the benefits to be derived from a contract are lower than the unavoidable costs of meeting the obligation under the contract, a provision is recognised. The provision is stated at the present value of the future net cash outflows expected to be incurred in respect of the contract.

Foreign Currency#

Foreign currency transactions are reported at the New Zealand dollar exchange rate at the date of the transaction.

Statement of Cash Flows#

The following are definitions of the terms used in the statement of cash flows:

• cash and cash equivalents include cash on hand, cash in transit, bank accounts and deposits with a maturity of no more than three months from date of acquisition
• investing activities are those activities relating to the acquisition and disposal of non-current assets
• financing activities comprise capital injections by, or repayment of capital to, the Crown, and
• operating activities include all transactions and other events that are not investing or financing activities.

Taxation#

Departments and Offices of Parliament are exempt from income tax as public authorities. Accordingly no charge for income tax has been provided for.

Goods and Services Tax#

These forecast financial statements are GST exclusive, except for receivables and payables in the statement of financial position, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax, then it is recognised as part of the related asset or expense.

The net amount of GST owing to or from the Inland Revenue Department at balance date is included as part of receivables or payables (as appropriate) in the statement of financial position.

Commitments#

Future expenses and liabilities to be incurred on contracts that have been entered into at balance date are disclosed as commitments to the extent that there are equally unperformed obligations.

Contingent Liabilities and Contingent Assets#

Contingent liabilities are disclosed if the possibility that they will crystallise is not remote. Contingent assets are disclosed if it is probable that the benefits will be realised.

Changes in Accounting Policies#

Any changes in accounting policies since the date of the last audited financial statements prepared under New Zealand generally accepted accounting practice are described in the statement of entity-specific accounting policies. The last audited financial statements (30 June 2008) were prepared in accordance with NZ IFRS (New Zealand Equivalents to International Financial Reporting Standards) as appropriate for public benefit entities.

Forecast Financial Statements Department of Conservation#

Statement of Forecast Comprehensive Income for the year ending 30 June 2010#

Statement of Forecast Changes in Taxpayers' Funds for the year ending 30 June 2010#

Forecast Statement of Financial Position as at 30 June 2010#

Statement of Forecast Cash Flows for the year ending 30 June 2010#

Statement of Significant Assumptions#

These forecast financial statements have been compiled on the basis of Government policies and the Estimates of Appropriation relating to Vote Conservation presented by the Government. They reflect decisions made by the Government during the 2009/10 budget process up to April 2009.

The primary underlying assumption upon which this financial information has been prepared is that the department's activities will remain substantially the same as for the previous year.

Personnel and operating costs are based on historical experience. The general historical pattern is expected to continue and the estimated year end information for 2008/09 is used as the opening position for the 2009/10 forecasts.

Statement of Entity-Specific Accounting Policies#

Reporting entity

These are the prospective financial statements of Department of Conservation, prepared in accordance with section 38 of the Public Finance Act 1989.

Department of Conservation is a Government Department as defined by section 2 of the Public Finance Act 1989. For the purposes of financial reporting Department of Conservation is a public benefit entity.

Authorisation Statement

These forecast financial statements were authorised for issue by the Director-General and Chief Financial Officer on 22 April 2009. The Chief Financial Officer is responsible for the forecast financial statements presented, including the appropriateness of the assumptions underlying the forecast financial statements and all other required disclosure.

Specific Accounting Policies

Property, plant and equipment

Capitalisation thresholds applied are set out below:

The estimated useful lives of property, plant and equipment are set out below:

Intangible assets

Capitalisation thresholds applied are:

The estimated useful lives of intangible assets are set out below:

Notes to the Financial Statements#

Note 1 - Operating Expenses

Note 2 - Property, plant and equipment#

Note - Other is mostly made up of Visitor Assets.

Note 3 - Intangible assets#

Note 4 - Reconciliation of Net Surplus to Net Cash Flows from Operating Activities for the year ending 2010#

Note 5 - Capital expenditure#

Forecast Financial Statements Ministry for the Environment#

Statement of Forecast Comprehensive Income for the year ending 30 June 2010#

Statement of Forecast Changes in Taxpayers' Funds for the year ending 30 June 2010#

Forecast Statement of Financial Position as at 30 June 2010#

Statement of Forecast Cash Flows for the year ending 30 June 2010#

Statement of Significant Assumptions#

These forecast financial statements have been compiled on the basis of existing government policies and Ministerial expectations at the time the statements were finalised.

The main assumptions are as follows:

• The department will shift its activities to focus on the Government's priorities. These priorities include the reform of the Resource Management Act, the redesign and implementation of the Emissions Trading Scheme, improving New Zealand's freshwater management, and creating an Environmental Protection Agency.
• Personnel costs are based on 320 full time equivalent staff which takes into account staff turnover.
• Operating costs are based on historical experience and various other factors that are believed to be reasonable under the circumstances.
• The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revisions and future periods if the revision affects both current and future periods.
• Estimated year end information for 2008/09 is used as the opening position for the 2009/10 forecasts.

These assumptions are adopted as at 3 April 2009.

Factors that could lead to material differences between the forecast financial statements and the 2009/10 actual financial statements include:

• Changes to the baseline budget through new initiatives, or technical adjustments.

Statement of Entity-Specific Accounting Policies#

The Ministry for the Environment has applied the accounting policies set out in the Statement of Accounting Policies Standard included in this document, except as stated below.

Reporting entity

These are the prospective financial statements of Ministry for the Environment, prepared in accordance with section 38 of the Public Finance Act 1989.

The Ministry for the Environment is a Government Department as defined by section 2 of the Public Finance Act 1989. For the purposes of financial reporting the Ministry for the Environment is a public benefit entity.

Authorisation Statement

These forecast financial statements were authorised for issue by the Secretary for the Environment on 8 April 2009. The Secretary for the Environment is responsible for the forecast financial statements presented, including the appropriateness of the assumptions underlying the forecast financial statements and all other required disclosure.

Specific Accounting Policies

Rental Income

Rental income is recognised in the Statement of Financial Performance on a straight-line basis over the term of the lease. Lease incentives granted are recognised evenly over the term of the lease as a reduction in total rental income.

Leases

Finance leases

The Ministry for the Environment is not permitted to enter into finance leases under the Public Finance Act 1989.

Expenses

Grants/subsidies

Where grants and subsidies are discretionary until payment, the expense is recognised when the payment is made. Otherwise, the expense is recognised when the specific criteria have been fulfilled and notice has been given to the Crown.

Property, Plant and Equipment

Capitalisation thresholds applied are set out below:

• IT equipment/hardware - $1,500.
• All other property, plant and equipment - $1,500.

Depreciation

The estimated useful lives of property, plant and equipment are set out below:

• Furniture and fittings - 5 to 8 years.
• Office equipment - 5 years.
• Computer hardware - 3 to 4 years.

Intangible Assets

Capitalisation thresholds applied are set out below:

• Purchased software - $1,500.

The estimated useful lives of intangible assets are set out below:

• Purchased software - 3 years.
• Purchased software licences - 3 to 8 years.

Cost Allocation

The Ministry derives the costs of outputs using a cost allocation system. Direct costs are charged directly to the Ministry's outputs. Indirect costs are charged to outputs based on a primary cost driver of salaried full-time equivalent staff.

'Direct costs' are those costs directly attributed to an output. 'Indirect costs' are those costs that cannot be directly associated with a specific output.

Notes to the Financial Statements#

Note 1 - Operating Expenses

Note 2 - Reconciliation of Net Surplus to Net Cash Flows from Operating Activities for the year ending 30 June 2009#

Forecast Financial Statements Parliamentary Commissioner for the Environment#

Statement of Forecast Comprehensive Income for the year ending 30 June 2010#

Statement of Forecast Changes in Taxpayers' Funds for the year ending 30 June 2010#

Forecast Statement of Financial Position as at 30 June 2010#

Statement of Forecast Cash Flows for the year ending 30 June 2010#

Statement of Significant Assumptions#

Statement of Significant Assumptions

These forecast financial statements have been compiled on the basis of outputs agreed with the Speaker of the House of Representatives at the time the statements were finalised.

The main assumptions are as follows:

• The office activities will remain substantially the same as for last year.
• Personnel costs are based on 18 staff positions (15 full time equivalents).
• Operating costs are based on historical experience. The general historical pattern is expected to continue.
• Estimate year end information for 2008/09 is used as the opening position for the 2009/10 forecasts.

These assumptions are adopted as at 16 April 2008.

Factors that could lead to material differences between the forecast financial statements and the 2009/10 actual financial statements include:

• Changes to the baseline budget through new initiatives, or technical adjustments.
• Changes to the Permanent Legislative Authority.

Statement of Entity-Specific Accounting Policies#

The Parliamentary Commissioner for the Environment has applied the accounting policies set out in Statement of Accounting Policies Standard included in this document, except as stated below.

Reporting Entity

These are the prospective financial statements of the Parliamentary Commissioner for the Environment, prepared in accordance with section 38 of the Public Finance Act 1989.

The Parliamentary Commissioner for the Environment is a Government Department as defined by section 2 of the Public Finance Act 1989. For the purposes of financial reporting Parliamentary Commissioner for the Environment is a public benefit entity.

Authorisation Statement

These forecast financial statements were authorised for issue by Dr Jan Wright, Parliamentary Commissioner for the Environment on 9 April 2009. The Parliamentary Commissioner for the Environment is responsible for the forecast financial statements presented, including the appropriateness of the assumptions underlying the forecast financial statements and all other required disclosure.

Specific Accounting Policies

Property, Plant and Equipment

Capitalisation thresholds applied are set out below.

• IT Equipment/Hardware $1,000.
• All other property, plant and equipment $1,000.

Depreciation

The estimated useful lives of property, plant and equipment are set out below.

• Leasehold improvements (office fit-out) 10 years (10%).
• IT Equipment/Hardware 4 years (25%).
• Furniture, fittings and fixtures 10 years (10%).
• Other office equipment 5 years (20%).

Intangible Assets

Capitalisation thresholds applied are:

• Purchased software $1,000.

The estimated useful lives of intangible assets are set out below.

• Purchased software 3 years (33%).
• Developed software 4 years (25%).

Cost Allocation

The Parliamentary Commissioner for the Environment has one output only. All costs are allocated directly to that output.

Notes to the Financial Statements#

Note 1 - Operating Expenses

Note 2 - Reconciliation of Net Surplus to Net Cash Flows from Operating Activities for the year ending 30 June 2010#

Part 2 - Details and Expected Performance for Output Expenses#

Part 2.1 - Departmental Output Expenses#

Intended Impacts, Outcomes and Objectives

Carbon Monitoring Programme (M12)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The decrease in appropriation is in line with the scheduled deliverables as detailed in the business case which was approved by Cabinet on 14 February 2007.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Policy Advice - Climate Change (M12)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

The increase in appropriation in 2009/10 is due to funding received in 2009/10 for the review of the Emissions Trading Scheme.

Output Performance Measures and Standards#

Conditions on Use of Appropriation#

Current and Past Policy Initiatives#

Policy Advice - Energy Efficiency and Conservation (M12)#

Scope of Appropriation#

Expenses and Revenue#

Output Performance Measures and Standards#

Current and Past Policy Initiatives#