	Note	2000 Actual	1999 Actual
		$000	$000
Fees and fines		44,322	49,850
Electrical levies		3,107	3,157
Interdepartmental revenue		2,158	2,582
Petroleum Fuels Monitoring Levy		1,138	1,147
Rental from sub-let of office space		778	569
Gas Levies		548	512
Sale of publications		146	273
Net gain on sale of fixed assets	3	25	80
Miscellaneous		930	938
Total Other Revenue		53,152	59,108

3. Gain on Sale of Fixed Assets

	2000 Actual	1999 Actual
	$000	$000
Computer equipment	0	2
Furniture	0	(3)
Office equipment	(3)	1
Test equipment	(2)	24
Motor vehicles	30	56
Net Gain on Sale of fixed Assets	25	80

4. Interest Revenue

The Ministry invests surplus cash on term deposit with the New Zealand Debt Management Office (NZDMO) and earns interest at variable rates.

5. Personnel Costs

	2000 Actual	1999 Actual
	$000	$000
Salaries and wages	36,414	37,494
ACC levy	400	800
Pension expenses - GSF	611	677
Recruitment costs	493	392
Fringe benefit tax	10	24
Total Personnel Costs	37,928	39,387

6. Operating Expenses

		2000 Actual	1999 Actual
		$000	$000
Rental and operating lease costs		8,335	8,403
Professional services		8,430	8,459
Technical services		4,279	3,472
Travel - domestic and overseas		2,914	2,552
Premises costs⁵		1,581	1,707
Staff training		915	1,069
Maintenance and repairs of fixed assets		1,720	1,651
Audit Fees to Auditors for Audit of the Financial Statements
	Deloitte Touche Tohmatsu for GSF	95	95
	Audit New Zealand	155	155
Other services provided by auditors
	Deloitte Touche Tohmatsu for GSF	-	96
Fixed asset write-offs		72	55
Change in provision for doubtful debts		(108)	(70)
Entertainment expenses		121	114
Bad debts written off		376	146
Other operating costs		16,879	17,878
Total Operating Expenses		45,764	45,782

7. Restructuring Expenses

	2000 Actual	1999 Actual
	$000	$000
Review of Corporate Information Management and Technology Group	258	-
Transition of Energy Efficiency Conservation Authority to Crown entity	90	-
Business and Registries Branch	-	286
Energy Inspection Group	-	205
Total Restructuring Expenses	348	491

8. Capital Charge

The Ministry pays a capital charge to the Crown on its taxpayers' funds as at 30 June and 31 December each year. The capital charge rate for the year ended 30 June 2000 was 10% (30 June 1999, 11%).

9. Taxpayers' Funds

Taxpayers' funds comprise two components:

		2000 Actual	1999 Actual
		$000	$000
General Funds
General funds as at 1 July		2,064	3,725
Net operating surplus		6,591	9,807
		8,655	13,532
Provision for repayment of surplus to the Crown		(6,591)	(10,637)
Transfers (to)/from other Departments:
	Internal Affairs	-	(88)
	Labour	-	(743)
General Funds as at 30 June		2,064	2,064
Revaluation Reserve
Leasehold improvements		221	221
Total Taxpayers' Funds as at 30 June		2,285	2,285

10. Short-Term Deposits

As at balance date the following term deposit had been placed with the New Zealand Debt Management Office (NZDMO):

30/6/ 1999 Actual	Counterparty	Interest Rate %	Term	30/6/ 2000 Actual
$000				$000
13,000	NZDMO	5.688	7 days	2,800
	NZDMO	5.875	14 days	5,000
13,000				7,800

11. Debtors and Receivables

	2000 Actual	1999 Actual
	$000	$000
Third party debtors	5,134	4,825
Less: Provision for doubtful debts	(316)	(424)
Net	4,818	4,401
Interdepartmental debtors	1	35
Total Debtors and Receivables	4,819	4,436

12. Fixed Assets

(All figures in $000s)

	Cost or Valuation as at 30/6/ 2000	Accumu- lated Depre- ciation 30/6/ 2000	Net Carrying Amount as at 30/6/ 2000	Cost or Valuation as at 30/6/ 1999	Accumu- lated Depre- ciation 30/6/ 1999	Net Carrying Amount as at 30/6/ 1999
Buildings	38	25	13	38	24	14
Leasehold improvements	2,866	775	2,091	2,411	357	2,054
Computer equipment	15,992	9,030	6,962	15,503	10,354	5,149
Furniture	3,859	2,351	1,508	3,439	2,044	1,395
Office equipment	2,347	1,649	698	2,312	1,423	889
Test equipment	2,723	1,639	1,084	2,501	1,460	1,041
Motor vehicles	1,526	715	811	1,520	740	780
Work in progress	406	-	406	2,410	-	2,410
Totals	29,757	16,184	13,573	30,134	16,402	13,732

13. Creditors and Payables

	2000 Actual	1999 Actual
	$000	$000
Trade creditors	2,391	1,048
Accrued operating expenses	6,462	8,415
Provisions (refer note 14)	2,524	1,443
GST Payable	457	840
	11,834	11,746
Accruals for fixed assets	384	443
Total Creditors and Payables	12,218	12,189

14. Provisions

	2000 Actual	1999 Actual
	$000	$000
Refund of Crown Mineral Applications	129	142
Rebate of Mining Inspection Fees	-	92
Rebate of Petroleum Fuels Monitoring Levy	482	112
Rebate of Gas Levies	20	-
Restructuring	348	260
Rebate of Electrical Levies	978	375
Other	567	462
Total Provisions	2,524	1,443

15. Unearned Income

	2000 Actual	1999 Actual
	$000	$000
Radio Operations	5,589	5,306
Energy Inspection	974	924
Crown Minerals	1,186	1,261
Other unearned income	6	43
Total Unearned Income	7,755	7,534

Unearned Income for Radio Operations and Crown Minerals relates to annual licence fees invoiced at the beginning of the period to which they relate and received in advance of being recognised as income. Energy Inspection unearned income includes income received in advance for electrical workers' practising licences.

16. Employee Entitlements

	2000 Actual	1999 Actual
	$000	$000
Non-Current Liabilities
Retirement and long service leave	2,224	2,190
Total non-current portion	2,224	2,190
Current Liabilities
Retirement and long service leave	221	240
Annual leave	2,076	1,979
Total Current Portion	2,297	2,219
Total Employee Entitlements	4,521	4,409

17. Provision for Repayment of Surplus to the Crown

	2000 Actual	1999 Actual
	$000	$000
Net surplus/(deficit)	6,591	9,807
Add: Other expenses (not for production of outputs)	-	830
Total Provision for Repayment of Surplus	6,591	10,637

18. Related Parties

The Ministry is a wholly owned entity of the Crown. The Government significantly influences the roles of the Ministry as well as being a major source of its revenue.

The Ministry enters into numerous transactions with other Government Departments, Crown Agencies and State Owned Enterprises on an arms length basis. These transactions are not considered to be related party transactions.

Apart from those transactions described above, the Ministry has not entered into any related party transactions.

19. Financial Instruments

The Ministry is party to financial instrument arrangements as part of its everyday operations. These include instruments such as bank balances, investments, accounts receivable, trade creditors and foreign currency forward contracts.

Credit Risk

Credit risk is the risk that a third party will default on its obligations to the Ministry, causing the Ministry to incur a loss. In the normal course of its business, the Ministry incurs credit risk from trade debtors, and transactions with financial institutions and the New Zealand Debt Management Office (NZDMO).

The Ministry does not require any collateral or security to support financial instruments with financial institutions that the Ministry deals with, or with the NZDMO, as these entities have high credit ratings. For its other financial instruments, the Ministry does not have significant concentrations of credit risk.

Fair Value

The fair value of all financial instruments is equivalent to the carrying amount disclosed in the Statement of Financial Position.

Currency Risk

Currency risk is the risk that debtors and creditors due in foreign currency will fluctuate because of changes in foreign exchange rates.

The Ministry uses foreign currency forward contracts to manage foreign exchange exposures. All individual payments above the equivalent of NZ$50,000 must be made via foreign currency forward contracts. The maximum exposure for all other foreign exchange transactions that the Ministry may have at any one time is NZ$250,000.

Interest Rate Risk

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. This could impact on the return on investments or the cost of borrowing. The Ministry has no significant exposure to interest rate risk on its financial instruments.

Under section 46 of the Public Finance Act the Ministry cannot raise a loan without ministerial approval and no such loans have been raised. Accordingly, there is no interest rate exposure for funds borrowed.

20. Major Budget Variances

Statement of Financial Performance

The increases in output expenses and consequential increase in Crown Revenue principally result from increases in the following outputs (all exclusive of GST):

Vote: Commerce Output Class D1 Policy Advice - Business and Competition

The appropriation for this output class was increased by $1,213,000. Most of this provided for the purchase of advice on the implementation of the previous government's Bright Futures/5 Steps Ahead initiative.

Vote: Business Development Output Class D1 Policy Advice - Business Development

The appropriation for this output class was increased by $2,495,000. Most of this provided for the establishment costs for Industry New Zealand and the Ministry of Economic Development and interim policy advice costs associated with the new Economic Development, and Industry and Regional Development portfolios.

Vote: Communications Output Class D1 Policy Advice - Communications

The appropriation for this output class was increased by $429,000 overall. This increase comprised $572,000 for the telecommunications sector inquiry, $30,000 for the Ministry's contribution to the INCIS inquiry; offset by $58,000 reduction for transfer of policy advice outputs to the Ministry of Culture and Heritage and reduction of $115,000 associated with the repeal of section 5B of the Telecommunications Act 1987 (this change had a corresponding impact on Other Revenue).

Vote: Communications Output Class D3 Year 2000 Readiness

The appropriation for this output class was increased by $440,000. This provides for an expense transfer from 1998/1999 of $365,000 to fund a public information programme to provide advice on managing Y2K risks, and a technical adjustment of $75,000 to recognise sponsorship revenue previously offset against expenses.

Vote: Energy Output Class D1 Policy Advice on Energy and Resource Issues

The appropriation for this output class was increased by $650,000. This provided for the Electricity Sector Inquiry.

Vote: Government Superannuation Fund (GSF) Output Class D1 Management of the GSF

The appropriation for this output class was increased by $250,000. This provided for the write-off of a receivable incorrectly raised against the GSF Fund for expense recovery during the previous financial year.

Revenue Other

Provision was made in the Supplementary Estimates for increases in third party revenue and associated increases in GST for appropriation purposes, under Vote: Commerce output classes D4 Registration and Granting of Intellectual Property Rights and D7 Registration and Provision of Statutory Information. These increases in revenue were fiscally positive to the Crown. The Statement of Unappropriated Expenditure explains the only significant variation from the Supplementary Estimates.

Output Expenses

A realignment of output expenses between the relative proportion of operating to personnel costs was done for the Supplementary Estimates. This change reflects the flow-on effect of changes in work programmes, and the full year impacts of the previous year restructuring.

Interest Revenue

The greater than anticipated interest earnings from New Zealand Debt Management investments reflects greater than expected third party revenue and improvements in cash flow management.

Further information on the major budget variations from the initial Budget Night (Main) Estimates is provided under each output class in the Statement of Objectives and Statement of Service Performance.

Statement of Financial Position (and Cash Flows)

The increase in cash and short-term deposits offset by Debtor Crown reflects the increase in current liabilities, greater than expected third party revenue and deferral of capital expenditure.

The reduction in current employee entitlements is a result of management efforts to reduce the level of untaken leave.

21. Discontinued Activities

Vote: Communications Output Class D3 Year 2000 Readiness

The Y2K Readiness Commission, established in October 1998 to provide advice on and monitor and promote understanding of Year 2000 issues, completed its final report to Cabinet on 27 March 2000.

Vote: Energy Output Class D4 Energy Efficiency and Conservation

Prior to 30 June 2000 the Energy Efficiency and Conservation Agency (EECA) was a division within the Ministry of Economic Development. From 1 July 2000, with the passing of the Energy Efficiency and Conservation Act 2000, EECA was established as a Crown Entity for the purposes of the Public Finance Act 1989. The Ministry for the Environment became EECA's control agent from 1 July 2000. A capital withdrawal of $345,000 eventuated.

22. Events after Balance Date

No events have occurred between the balance date and date of signing these financial statements that materially affect the financial statements.

⁵Includes rates, power and water, cleaning services and other utility charges.

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Printed: 26/11/2009