Statement of Intent 2008/09

															

Table of Contents								

Statement from the HSC Board	3
Introduction	4
PART 1 – The Next Three Years	5
HSC’s Strategic Direction	5
The HSC’s Approach	5
Organisational Capability and Capacity	7
Operating Environment	11
Crown Expectations	12
Outcomes	14
Health Outcomes	14
Long-term Outcomes and Objectives	14
Intermediate Outcomes and Interventions	15
Sources referenced in Part 1	40
PART 2: Statement of Forecast Service Performance	41
Reporting	50
Quarterly Reports	50
Informal Reports	50
Reports to Parliament	50
Part 2a: Financial Statements	51
Forecast Statement of Cashflow	52
Forecast Statement of Output Costs	53
Forecast Statement of Financial Position	54
Forecast Statement of Financial Performance	55
Forecast Statement of Movements in Equity	56
Statement of Accounting Policies	57

ISSN 1172-7357 (Print)
ISSN 1178-9042 (Online)

Statement from the HSC Board				

The Health Sponsorship Council’s (HSC’s) primary role is to promote health and encourage healthy lifestyles. We undertake this by developing and delivering a number of health promotion and marketing programmes, which aim to improve health by:

•	Reducing the incidence and prevalence of smoking and reducing tobacco-related harm.
•	Increasing sun safe behaviours.
•	Improving nutrition.
•	Preventing and minimising gambling harm.

The HSC uses research and evaluation to inform our programmes and directions and works to strengthen the health sector so it is more able to meet government health objectives.

This Statement of Intent outlines for Parliament the performance we have agreed with the Minister of Health to deliver for the period commencing on 1 July 2008 and ending 30 June 2009.

In particular, this document specifies:

•	HSC’s contribution to government strategy.
•	Strategic issues being faced by the HSC and how we intend to address them.
•	The programme of initiatives to promote healthy lifestyles, with performance indicators that the HSC will seek to achieve from 1 July 2008 to 30 June 2009.
•	The performance the HSC will aim to achieve during this time, specified in terms of financial performance, capability and risk management.
•	Financial forecasts.

This specification of performance will be used as a basis for comparison against our actual performance when our annual report is prepared.
		
Athol Mann							Tracey Bridges
Chairman							Board Member
30 June 2008							30 June 2008

Introduction									

This Statement of Intent has been prepared by the HSC to meet the requirements of the Crown Entities Act 2004.

The document has two parts:

PART 1 provides a three-year picture of the outcomes HSC is pursuing, how we intend to achieve these outcomes and how we will measure progress. It also includes a summary of the challenges we face and any implications these challenges may have.

PART 2 includes the financial and non-financial measures and standards by which we will be assessed in 2008/09.

The HSC was established by the Smoke-free Environments Act 1990 and is a Crown entity, as defined in Schedule 1 (Crown agents) of the Crown Entities Act 2004. 

The HSC is governed by a Board of up to six members. Current members:

Athol Mann of Wellington, Chairman
Tracey Bridges of Wellington
Tino Pereira of Wellington
Allison Roe of Auckland

PART 1 – The Next Three Years				

HSC’s Strategic Direction						

The HSC’s function is to “promote health and encourage healthy lifestyles” (section 44 of the Smoke-free Environments Act 1990) resulting in the mission To encourage New Zealanders to adopt and maintain healthy attitudes and lifestyles.

HSC is contracted to work in the areas of tobacco control, sun safety, healthy eating, and problem gambling. Our work focuses on:

•	Raising awareness of the health issues involved.
•	Positively influencing attitudes about the health issues.
•	Positively influencing behaviour.
•	Encouraging local, regional, and national co-operation.
•	And, ultimately, contributing to the reduction in health inequalities, smoking rates, cancers, cardio-vascular disease, type 2 diabetes, obesity, and gambling-related harm.

A number of strategies are used to achieve our goals and objectives, including a range of marketing and communication activities, promotions, and educational programmes and resources. Formative research, evaluation and monitoring play a key part, as do facilitating community action, undertaking paid media activities, and developing branded resources to help disseminate our messages.

The HSC’s Approach 

The Ottawa Charter, the New Zealand Health Strategy, the Treaty of Waitangi and a number of Government strategies help guide the strategic direction of the HSC.

The HSC is a public health organisation and, as such, takes a public health approach. The Ottawa Charter provides the international framework for our public health approach, which defines health promotion as “the process of enabling people to increase control over, and to improve, their health…”

As a reflection of our public health approach, HSC’s strategies focus on improved health outcomes for all New Zealanders, as the wellbeing of society is intertwined with the wellbeing of individuals. HSC has a particular focus on improving the health of Mäori (as New Zealand’s indigenous people) and Pacific peoples, as collectively they experience an array of negative health outcomes. Reducing these inequalities is a key part of most of HSC’s programmes.

To improve health outcomes for all New Zealanders, HSC uses social marketing – a strategy that employs commercial marketing and communication principles and techniques to analyse, plan, execute and evaluate programmes designed to influence the voluntary behaviour of target audiences in order to improve their health. 

Social marketing is a user-focused and community-driven process. It is systematic, staged, and is directly geared to achieving specific and measurable behavioural goals over the short, medium and long-term.

Consultation and collaboration

Consultation and collaboration are essential for successful social marketing. 

The HSC is committed to a collaborative approach as it ensures effective and innovative strategies are shared, as is knowledge and information. In addition, HSC’s brands and messages are portrayed consistently and coherently, helping people to better understand the messages and, as a result, take action. 

The Government gains from collaboration by reducing duplication between government agencies and, more importantly, through shared learning and communication. An additional benefit is that HSC’s health messages reach a wider audience in a clear and consistent manner. HSC’s partner organisations gain, too, by having our tools and resources readily available to them. At the local level, collaboration enables communities to develop solutions that are best for them while strengthening HSC’s work by linking into activities taking place in communities, schools and workplaces. The benefits of this approach are numerous, from making messages relevant to different people’s lives and, through the consistency and coherency of the messages across the country, building understanding and acceptance of the brands and messages.

The range of organisations the HSC works with is broad, from national agencies such as Agencies for Nutrition Action and the Heart Foundation, to regional organisations such as public health units (within District Health Boards), Cancer Society divisions and local Mäori networks. By working in this way we hope to assist and facilitate both national and community action. 

Research and evaluation

Research and evaluation are key activities within many stages of the social marketing process. Examples of research and evaluation HSC undertakes to ensure we develop appropriate messages, communicate them in a meaningful manner with our key audiences, and constantly monitor results are:

•	Formative research to guide directions for new social change programmes. This includes market research to determine the most appropriate audience and establish the most effective mix of messages and delivery mechanisms.
•	Evaluation and monitoring of existing social change programmes to ensure they continue to meet HSC’s goals and objectives. In this way we are able to adjust our national communication strategies to continue to meet our audiences’ needs.
•	Co-ordination of research to inform the social change programmes of HSC and others. As part of this work HSC undertakes some long-term research including the biennial Health and Lifestyles Survey to track the impact of HSC's four programmes, the triennial sun safety monitor, and the annual youth tobacco survey (the New Zealand Youth Tobacco Monitor, which is jointly undertaken with ASH). 

Organisational Capability and Capacity

Ministry of Health

Contract
2008/09 is the final year of the HSC’s three-year contract with the Ministry of Health. As a result, the HSC will begin contract discussions with the Ministry early in the financial year, with a view to completing the process in a timely manner.

Men’s Health Initiative
In late 2007/08 the Associate Minister of Health announced an action plan for men’s health, including a social marketing campaign. In 2008/09 HSC, working with the Ministry of Health, will contribute to the scoping, development and implementation of this initiative.

People

The HSC’s organisational capability and capacity needs are defined by our work programme. As a result, the last two years have been a period of significant growth as we have recruited staff to enable us to deliver on two new areas of work (healthy eating and problem gambling) and increased capacity in the research and evaluation unit to ensure we are able to share information, improve performance, and provide international comparisons. 

With increased competition for a limited pool of experienced, skilled people the HSC is committed to recruiting, retaining and developing a talented and diverse workforce. Strategies to achieve this include:

•	Continuing to provide learning and development opportunities for staff. Professional development plans for individuals are developed as part of the performance review process.
•	Conducting exit interviews for staff that are leaving.
•	Supporting a diverse workforce so we can meet the needs of target audiences.

Business development unit

In early 2007/08 the HSC established a business development unit (BDU) with the primary function of strengthening and enhancing the work and practice of the HSC in the areas of social marketing and reducing inequalities. Specific areas of focus include:

•	Contributing to the development of HSC’s capacity to deliver social marketing programmes. 
•	Supporting strategic and operational planning activities across the organisation.
•	Supporting and enhancing the wider health sector. The BDU will consider opportunities that contribute to health sector enhancement, including support for collaborative and innovative approaches to health.

Two important activities undertaken by the BDU in 2007/08 were overseeing the inaugural quality assurance process and undertaking an organisational culture assessment.

Quality assurance
The HSC has an ongoing commitment to ensuring we deliver quality programmes. As a result, a quality improvement plan was developed in 2007 with a view to:

•	Supporting the development of robust processes and methods used for current social marketing programmes.
•	Improving the efficiency and effectiveness of our programmes and activities (in line with the strategic plan).
•	Developing a best practice model(s) for social marketing.

The quality assurance model will assist the HSC to sharpen its social marketing skills, keep up to date with international directions and trends, and share this knowledge and learning with others interested in improved health and social outcomes.

SunSmart was the first programme to undergo the process, with recommendations set to be adopted in 2008/09. In 2008/09, tobacco control programmes will be reviewed.

Cultural assessment
The HSC’s organisational values underpin the ways that staff members are expected to operate in carrying out their respective roles and activities. With the recent growth and development of the organisation, we undertook an organisational cultural assessment in 2007/08 to gain a better understanding of the needs of HSC staff. Overall, the responses were very positive and we are committed to making the changes required to ensure the HSC continues to be regarded as a workplace of choice.

Research and evaluation

Research and evaluation are key to HSC’s operations and fundamental to social marketing – understanding what people are thinking and how they may have come to these conclusions is vital. We must be attuned to our audiences and ensure we have an evidence base that is comprehensive enough to enable us (and our partners) to have confidence that our strategies are as effective as possible. While HSC has made a significant investment in this area in the past two years (by ensuring our in-house research and evaluation unit has both the capacity and capability to undertake this vital role), recruiting appropriately trained researchers continues to be a capacity issue we must deal with.

Risk management 

As a Crown entity, the HSC is expected to manage owner expectations including risk and risk mitigation strategies. In 2007/08, the HSC has undertaken work to improve organisational risk identification and risk management planning across the organisation. A risk management tool has been developed and is expected to be introduced in early 2008/09.

Co-ordinated state services

As mentioned earlier, HSC values the advantages that can be achieved in working collaboratively with many organisations, both government and non-government. In a move to gain better access to share government knowledge the HSC joined the public service intranet (PSI) in 2007/08. Belonging to the PSI enables us to easily and securely collaborate, network and share work-related information across government. 

HSC research and evaluation also provides the opportunity to contribute our knowledge and expertise to other organisations involved in the health sector. For example, results from the Smokefree/Auahi Kore Monitor are helping the Ministry of Health track the reduction in exposure to second-hand smoke in New Zealand homes and the triennial sun survey informs the direction of national strategies (the HSC’s and others).

Organisational policies

The HSC’s suite of organisational policies were reviewed and, where necessary, updated in November 2007. This includes policies ranging from health and safety, code of conduct, formal complaints and equal employment opportunities to procurement and disaster planning. As a result of updating the procurement policy, all staff underwent procurement training at the end of 2007/08.

Good employer practices 

The HSC remains committed to fulfilling its obligations to be a good employer, implementing equal employment opportunities for all. This commitment will help us compete successfully (in terms of both recruitment and retention) in the challenging labour market we are currently operating in. Our staff are essential to ensure we maintain excellence and a high level of performance and results.

To retain our existing staff, attract people to the organisation, and help alleviate workplace stress the HSC has a number of flexible working arrangements, including:

•	Flexible start and finish times.
•	Recognising family needs outside of the workplace by providing reduced working hours, work at home options, and flexible options during school holidays.
•	Providing time off in lieu for additional hours worked.
•	Encouraging exercise during work hours.
•	Ensuring workstation set up is appropriate for individuals.
•	Employing extra support staff for peak periods.

Operating Environment

As HSC has four key areas of activity, we have a wide range of consumer and stakeholder audiences. HSC must continue to garner understanding of these many and various groups to ensure we are able to manage expectations and, most importantly, are able to communicate effectively with all of them.

Rapid changes in technology are transforming the way we live. The growth of new technologies and diverse and fragmented communications channels could affect our ability to communicate effectively with audiences. We must ensure, therefore, that we have an understanding of these new technologies and learn to use them efficiently to engage with people.

The myriad of marketing messages New Zealanders are exposed to (commercial and non-commercial, healthy and unhealthy) means the HSC is competing for attention in an extremely busy market. As a result, when developing new strategies we must be mindful of this ‘message clutter’, which means we must communicate in innovative and exciting ways that capture attention. This can be difficult when competing against commercial entities that have many thousands (if not millions) of dollars to market their messages and products and continues to challenge our approach.

Related to this is the need to avoid certain audiences feeling that they are being bombarded with a large number of health messages, as many of the government’s health messages focus on the same audience groups – Mäori, Pacific, and people from low socio-economic areas.

Demographic trends suggest that the proportion of New Zealanders of Mäori, Pacific and Asian ethnicity will increase and these populations tend to have a younger age structure than New Zealanders of European descent. This, and the overall aging population in this country, has a two-fold affect for HSC. At the older end of the population, lifestyle decisions made earlier in life are beginning to impact on quality of life through, for example, increases in the prevalence of obesity, type 2 diabetes, and heart disease. At the younger end, HSC is focused on preventative measures, making the need to influence younger audiences even more vital.

Crown Expectations

The Minister has expressed the expectations of the Crown as owner of the HSC within the 2008/09 Letter of Expectations. Those expectations are consistent with the terms of this Statement of Intent and include the following.

Stakeholder relationships
The HSC recognises the importance of community input and collaboration and will continue to proactively pursue and strengthen relationships with the Ministry of Health, relevant national organisations, District Health Boards, community groups and other agencies and organisations. This enables the sharing of knowledge, information and results. 

Public health infrastructure
The HSC will continue supporting the public health sector by improving knowledge and the skills base of the workforce to assist effective delivery of health initiatives. This is achieved through delivering a number of workforce development opportunities, eg, social marketing seminars and conferences. In addition, HSC will continue to disseminate a range of research and evaluation findings to the sector.

Reducing health inequalities
The HSC recognises the importance of working and consulting with Mäori, Pacific and community groups to ensure our social marketing programmes adequately address the needs of these audiences and help reduce existing health inequalities. 

Balance sheet management
The HSC will manage accumulated equity and working capital to be consistent with agreed optimal levels.

Performance improvement
Through the quality improvement process (begun in 2007/08), the HSC is committed to ensuring we deliver quality programmes.

Focus on evidence
In recent years the HSC has made a significant investment in building the capacity of our research and evaluation unit. As a result we are now better able to establish a robust evidence base for our programmes and verify that strategies we undertake are effective.

Outcomes										

Health Outcomes

The Ministry of Health has four high-level health outcomes for the New Zealand population. They are:
•	Better health – the best possible improvement in New Zealanders’ health status and quality of life over time, within the resources available.
•	Reduced inequalities – an improvement in the health status of those currently disadvantaged, particularly Mäori, Pacific peoples and people with low socio-economic status.
•	Trust and security – New Zealanders feel secure that they are protected by the system from substantial financial costs due to ill health, and trust it because it performs to high standards, reflects their needs and provides opportunities for community participation.
•	Better participation and independence – the health and disability support sector contributes constructively to having a society that fully values the lives of people with disabilities.

Through HSC’s programme areas, the outcomes we contribute most to are:

•	Better health.
•	Reduced inequalities.

Long-term Outcomes and Objectives

HSC’s long-term outcomes focus on:

•	Reducing the prevalence of smoking.
•	Reducing the proportion of New Zealanders who develop and die from skin cancer.
•	Preventing obesity, maintaining healthy weight, and improving nutrition by helping New Zealanders to adopt and maintain healthy eating practices, with an initial focus on children. 
•	Preventing and minimising the harm from problem gambling.

Objective – Enabling the Health Sector

In addition to these outcomes the HSC has an objective of enabling the health sector. This objective focuses on working with the wider health sector to develop and hone people’s social marketing and health promotion skills so they are better able to meet government health objectives. 

HSC will encourage this improvement through the following activities:

•	Organising professional development opportunities on social marketing, health issues, research and evaluation, eg, the biennial Smokefree and social marketing conferences.
•	Supporting training opportunities for community health workers, eg, training in social marketing as part of the Te Hotu Manawa Mäori community nutrition programme.
•	Providing a mechanism for sharing best practice (through a social marketing website and listserve).
•	Developing linkages with experts and other social marketing organisations such as the National Centre for Social Marketing – England, and the Institute for Social Marketing – Stirling University, Scotland.
•	Maintaining and developing relationships with:
-	other government agencies and national organisations such as SPARC and the Ministry of Education
-	funding and planning units within District Health Boards
-	members of appropriate industry groups.

Intermediate Outcomes and Interventions 

The following sections describe the context for HSC’s programmes and the intermediate outcomes we are working towards. Intermediate outcomes are lower-level outcomes that, when achieved, influence final outcomes.

Diagrams in each section illustrate the cause-and-effect links between what the HSC does (the activities) and the health gains that we are ultimately trying to achieve for New Zealanders (the outcomes). For tobacco control and sun safety the long-term outcomes and links with the intermediate outcomes are based on international work. The long-term outcomes for nutrition are drawn from the Healthy Eating Healthy Action strategy (Ministry of Health, 2003) and international work, while those for problem gambling are based on the objectives in the government’s strategic plan – Preventing and Minimising Gambling Harm – Strategic Plan 2004-2010 (Ministry of Health 2005).

We monitor the contribution of the activities to our intermediate outcomes with annual performance measures and monitor progress towards long-term outcomes by measuring indicators that show the extent of health gains and the adoption of healthy lifestyle options.

Tobacco control

The problem
Tobacco smoking is the single biggest cause of preventable death and ill health in New Zealand. It is estimated that smoking is currently responsible for approximately 5,000 deaths per year in this country (Ministerial Committee on Drug Policy 2007, p25). In addition, second-hand smoke is recognised as a substantial health hazard, responsible for about 300 deaths per year in New Zealand. 

The 2006/07 New Zealand Health Survey shows that one in every five (19.9%) New Zealand adults was a current smoker. This equates to 619,000 adults (Ministry of Health, 2008). New Zealand's smoking rate has fallen to its lowest level since monitoring of tobacco use began more than 30 years ago.

The New Zealand Health Survey shows that the prevalence of smoking has decreased – from 25.2% in 1996/97 to 18.7% in 2006/07 (note: to allow comparisons these figures are for daily smoking (age adjusted), as the 2002/03 survey did not measure current smokers using the international definition adopted for the 2006/07 survey). The decline over this period was evident for both men and women.

Daily smoking for adults by gender and ethnicity, 1996/97, 2002/03 and 2006/07
(Ministry of Health, 2006/07 New Zealand Health Survey)

Yet, despite this decline, the burden of tobacco use is still borne disproportionately by Mäori and Pacific populations – the prevalence of current smoking in 2006/07 for Mäori was 42.2% and for Pacific peoples 26.9%, compared with 18.6% for people of European/Other ethnicity (these figures are unadjusted). The figures also show that, after adjusting for age, Mäori women were more than twice as likely to be current smokers than women in the total population, and Mäori men and Pacific men were 1.5 times more likely to be current smokers than men in the total population.

The prevalence of daily smoking in year 10 students (14- and 15-year-olds) also has decreased consistently since 2000, from 16.3% to 8.4% among girls and from 14.0% to 6.2% among boys by 2007 (Paynter, 2008). The decline over this period has occurred among students of all ethnicities, although large relative inequalities persist for both Mäori and Pacific youth when compared with European/other and Asian youth. Decreases in smoking rates from 2003 to 2007 have been larger for girls of all ethnicities, compared with boys.

The proportion of 14- and 15-year-olds who have never smoked, that is never even had one puff of a cigarette, has increased over the same period, from 33% in 2000 to 57% in 2007.

As well as Mäori and Pacific peoples, the burden associated with smoking falls disproportionately on people of lower socio-economic status, with the highest prevalence among people with low incomes – the 2006/07 Health Survey showed that for both men and women the prevalence of smoking was three times higher in the most deprived areas (NZDep 2006 quintile 5) than in the least deprived (quintile 1), when adjusted for age. For men, the figure for the most deprived areas was 34.2% while for the least deprived areas it was 12.2%. The corresponding figures for women were 32.2% and 11.4%.

As a consequence, Mäori, Pacific peoples, and people of lower socio-economic status are priority audiences for the HSC’s tobacco control strategies. The responses of these audiences to our campaigns and strategies are given priority in developing and implementing the messages.

Our focus
The three key objectives of tobacco control activities in New Zealand are to:

-	reduce smoking initiation
-	increase quitting
-	reduce exposure to second-hand smoke.

HSC focuses on the first and third of these objectives, although supporting initiatives that encourage young people and their parents and caregivers to quit is also a key part of our work.

The Framework for Reducing Smoking Initiation (RSI, HSC, 2005) guides effective interventions for reducing smoking initiation and creating smokefree communities. 

Progress to date
Evaluation of HSC's tobacco control work is showing tangible progress. The Smokefree Homes campaign has contributed to more children now living in homes where smoking is not allowed, while the Smokefree Cars campaign is helping to increase the number of smokefree cars. Based on reports from parents and caregivers, by 2007 9 out of 10 children under the age of 14 years were living in homes where no one smoked inside. This compares with a baseline figure of 8 out of 10 in 2003. The reported drop in smoking in household cars from 2006 to 2007 was from 20% to 17%. Mäori parents and caregivers' responses to these campaigns have been particularly positive.

Progress is also evident from an increasing number of smokefree public and recreational areas outdoors and increasing support among adults for these measures; the percentage of adults who believe that smoking at outdoor sports fields and courts is unacceptable increased from 37% in 2005 to 51% in 2007. Young people, particularly Mäori and Pacific, also are responding positively to new Smokefree and Auahi Kore campaigns targeted at this age group.

Despite these achievements, HSC aims to increase the impact of its programmes over the next three years. This will include consolidating existing work and building an evidence base from formative research to support new work in a new three-year tobacco control plan.

Intermediate Outcomes
The overall goal for HSC's tobacco control work for the next three years and beyond is to:

Reduce the incidence of young people becoming frequent or addicted smokers.

Drawing on the RSI Framework, this goal will be realised by:

-	increasing the skills of pre-adolescents and adolescents to refuse tobacco
-	reducing young people's access to tobacco, including reducing social supply from adults to young people
-	denormalising tobacco use by reducing young people's exposure to smoking behaviour, and increasing anti-tobacco and pro-smokefree attitudes among youth, and their parents and caregivers and role models
-	strengthening young people's associations with key social and cultural organisations that contribute to self-identities that exclude tobacco use, for example by increasing young people's participation in school and community activities that reinforce Smokefree and Auahi Kore messages.

A particular focus over the next three years will be on increasing pro-Smokefree/Auahi Kore and anti-tobacco attitudes among society at large and making Smokefree/Auahi Kore lifestyles and environments the "norm". This will include developing new national communications strategies for adults and continuing the strategies targeting young people (including Smoking Not Our Future). Whenever appropriate, promoting quitting messages to young people and adults will be included in interventions. 

Within Mäori environments and settings (such as marae and kura kaupapa) the focus will be on increasing the acceptance of an Auahi Kore kaupapa.

The diagram on page 21 shows how these objectives are translated into HSC's intermediate outcomes and how, in turn, these contribute to the long-term outcomes for the tobacco control sector in New Zealand. The first column in the diagram shows how the work in 2008/09 will contribute to these intermediate outcomes.

Monitoring progress – tobacco control
Indicators to measure progress towards achieving intermediate and long-term outcomes will include:

Intermediate Indicators
•	Proportion of population reporting exposure to second-hand smoke in homes, cars and other settings.
•	Proportion of adults and young people reporting pro-Smokefree/Auahi Kore and anti-tobacco attitudes.

Long-term Indicators
•	Prevalence of tobacco use among young people and adults.
•	Proportion of young people who are not regular smokers.

These indicators will be measured using data from monitors conducted by HSC and other organisations. Monitoring tobacco-related inequalities will be a key part of this work.

Managing to reduce the incidence of young people becoming frequent or addicted smokers

HSC’s Key
Activities

HSC’s
Contributing
Outcomes

Tobacco Control - Long-Term
Outcomes

•	National communications strategies targeting young people continued (eg, Smoking Not Our Future) (see 1.0.1, page 42).
•	Second-hand smoke national communications strategies continued (see 1.0.2, page 42).
•	Support provided to communities to increase the number of smokefree outdoor public places (eg, parks and playgrounds (see 1.0.3, page 42).
•	Communications strategies targeted at Mäori implemented in association with Te Reo Marama and community organisations (using print, website, resources such as posters and advertising, and grants) (see 1.0.4, page 43).
•	National communications strategies developed to increase pro-Smokefree/Auahi Kore and anti-tobacco attitudes among New Zealand adults, including parents and caregivers (see 1.0.5, page 43).
•	Partnerships with organisations to promote Smokefree/Auahi Kore brands and campaign messages to young people (see 1.0.6, page 43).		Increasing the skills of pre-adolescents and adolescents to refuse tobacco.

Reducing young people's access to tobacco, including reducing social supply from adults to young people.

Denormalising tobacco use by reducing young people's exposure to smoking behaviour, and increasing anti-tobacco and pro-smokefree attitudes among youth, and their parents and caregivers and role models.

Strengthening young people's associations with key social and cultural organisations that contribute to self-identities that exclude tobacco use, for example by increasing young people's participation in school and community activities that reinforce Smokefree and Auahi Kore messages.

Reduced inequality from tobacco-related harm.
		Reduced smoking initiation.

Reduced exposure to second-hand smoke.

Increased quitting among adults and young people.

Decreased tobacco-related inequalities.

Reduced tobacco-use prevalence and consumption among adults and young people.

Reduced tobacco-related morbidity and mortality.
	
•	Smoking Not Our Future partnered with Quit's youth cessation pilot (txt to quit) (see 1.0.7, page 43).		Increasing quit attempts, especially among young people and their parents and caregivers.			
•	National monitors developed and continued to survey smoking patterns, and pro-Smokefree/Auahi Kore attitudes, among the general population, Mäori, Pacific peoples and young people (see 1.0.8, page 43).					

Note: 	Long-term outcomes and links to intermediate outcomes are based on work by the U.S. Centers for Disease Control and Prevention. Reduced tobacco use, consumption and tobacco-related morbidity and mortality results from achieving the other long-term outcomes.

Sun safety

The problem
In the area of sun safety, New Zealand is following international trends – showing an increase in the incidence of skin cancer while the mortality rate remains relatively stable. More than 300 New Zealanders die every year from skin cancer, with melanoma being responsible for most of these deaths - 269 in 2005 (New Zealand Health Information Service).

The incidence rate is increasing and is expected to continue to do so over the next few years, reflecting the latent nature of skin cancer - the disease often does not manifest until many years after the damaging exposure. The incidence rates we see now are a reflection of the sun worshipping behaviour of the 1970s, 1980s and 1990s.

The main causal factor for melanoma is episodic sunburn, particularly during childhood. Studies have shown that the best avenue for melanoma prevention is by encouraging protection against sunburn, particularly in children and fair-skinned people.

Ultraviolet radiation (UVR) exposure also brings benefits as it provides the main source of vitamin D in New Zealand. Adequate vitamin D status is essential for general health, being necessary for bone, joint, muscle and neurological function. Because of this, a balance is required between avoiding an increased risk of skin cancer and maintaining adequate vitamin D levels. Research is currently underway to understand what the optimal balance should be for New Zealanders.
The promotion of sun safety in New Zealand (using the SunSmart brand) is managed through a close strategic partnership between the HSC and the Cancer Society of New Zealand. 

Our focus
Following the HSC's inaugural independent quality assurance process, which focused on the SunSmart programme, much of 2008/09 will focus on implementing the recommendations that resulted.

Progress to date
Evaluation of the sun safety programme undertaken since the mid-1990s shows that the programme and the "Tiger Prawn" campaign that promoted the "Slip, Slop, Slap, Wrap" message have been successful in raising knowledge, awareness and use of most SunSmart behaviours. However, this has not yet led to a decrease in the incidence of reported sunburn.

Research undertaken in 2006/07 with parents and caregivers of pre-teens found that sun safety messages needed to be consistent with the enjoyment of an outdoor "New Zealand summer lifestyle". In consequence, a new national communications strategy was launched at the start of 2008 that focuses on summer activities but explains the link between sunburn and melanoma and promotes the message to parents and caregivers to "never let your child get sunburnt".

Intermediate Outcomes
The New Zealand Skin Cancer Control Strategic Framework has the goal of reducing the proportion of New Zealanders who develop and die from skin cancer. The framework has three strands – prevention, early detection and treatment. HSC’s sun safety activities contribute primarily to prevention, and the overall goal for the sun safety prevention programme for the next three years is to reduce the incidence of sunburn in 8 to 12-year-olds by increasing effective use of sun protection strategies and reducing the time children are exposed to harmful UVR.

To realise this goal, the sun safety programme has four key objectives:

•	Increase the percentage of parents and caregivers taking steps to protect their 8 to 12-year-olds from getting sunburnt (ie, focusing on the home environment).
•	Increase the percentage of organisations and agencies with influence over recreational settings (eg, health promoters, sports organisations and local councils) taking steps to protect 8 to 12-year-olds from getting sunburnt in these settings.
•	Increase the percentage of organisations and agencies with influence over the media (eg, health promoters, the MetService and TV and print media) that are taking steps to increase messages that encourage, and decrease messages that discourage, sun protection behaviours.
•	to increase the percentage of primary and intermediate schools taking steps to protect 8 to 12-year-olds from getting sunburnt (note: this objective is the primary responsibility of the Cancer Society).

The focus for the programme, therefore, is to develop and implement strategies for each of these settings, beginning with a focus on the home environment.

HSC will also continue to develop partnerships and relationships with national and international organisations to contribute to the prevention, early detection and treatment of skin cancer.

The diagram on page 25 shows how these objectives are translated into HSC's intermediate outcomes and how, in turn, these contribute to the long-term outcomes for skin cancer control in New Zealand. The first column in the diagram shows how the work for 2008/09 will contribute to these intermediate outcomes.

Monitoring progress – sun safety
Progress towards achieving intermediate and long-term outcomes will be measured using the following key indicators:

•	Proportion of young people and adults adopting sun safe behaviours.
•	Incidence of reported sunburn among young people and adults.
•	Incidence of, and death rates from, skin cancer, including melanoma.

These indicators will be measured using data from monitors conducted by HSC and other organisations.

Managing to reduce the incidence of sunburn in 8 to 12-year-olds.

HSC’s Key
Activities

Sun Safety -
Long-Term
Outcomes

HSC’s
Contributing
Outcomes

•	National communications strategies continued to increase parents and caregivers' awareness and understanding of the risks of harmful exposure to UVR and to increase understanding of the UV Index (see 2.0.1, page 44).		Increasing the percentage of parents and caregivers taking steps to protect their 8 to 12-year-olds from getting sunburnt (ie, focusing on the home environment).		Decreased incidence of sunburn.

Reduced exposure to ultraviolet radiation.

Increase (effective) use of sun protection strategies.

Increased prevention, early detection and effective treatment of skin cancers.	
•	Partnerships with local authorities and community groups established and maintained to increase sun-safe policies and practices (see 2.0.2, page 44).		Increasing the percentage of organisations and agencies with influence over recreational settings (eg, health promoters, sports organisations and local councils) taking steps to protect 8 to 12-year-olds from getting sunburnt in these settings.			
•	Relationships with key agencies in the sector established and maintained to ensure consistent and frequent messages about sun protective behaviours and the risks of UVR (see 2.0.4, page 44).		Increasing the percentage of organisations and agencies with influence in the media (eg, health promoters, the MetService, TV, radio and print media) that are taking steps to increase messages that encourage, and decrease messages that discourage, sun protection behaviours.

Increasing the percentage of primary and intermediate schools taking steps to protect 8 to 12-year-olds from getting sunburnt (note: this is the primary responsibility of the Cancer Society).			
•	Resources developed and distributed to support national, regional and local sun safety strategies (see 2.0.3, page 44).					
•	Partnerships with national and international agencies and organisations established and maintained (see 2.0.5, page 45).		Increasing collaboration and partnerships between agencies and organisations for improved prevention, early detection and effective treatment of skin cancers.			

Note: 	Long-term outcomes and links to intermediate outcomes are based on work by the U.S. Centers for Disease Control and Prevention.

Healthy Eating – improved nutrition

The problem
In the last two decades, the number of overweight and obese people in developed countries has increased so quickly that it has been described as an epidemic and New Zealand is no exception. 

In New Zealand in 2006/07, one in five children were overweight (20.9% of 2 to 14-year-olds) and a further one in twelve (8.3%) were obese (Ministry of Health, 2008). Among adults, one in three (36.1%) were overweight and a further one in four (26.5%) were obese. There was an increase in the prevalence of obesity for adults from 1997 to 2006/07, but the rate of increase appears to be slowing, with no statistically significant increase from 2002/03 to 2006/07 for both men and women. There was no change in the proportion of school-aged children who were obese over this period, although in less than one generation childhood rates of obesity in New Zealand have tripled (Ministry of Health, 2004).

Mäori and Pacific communities are affected disproportionately by overweight and obesity, and morbidity and mortality associated with overweight and obesity, and nutrition-related risk factors. In 2006/07 12% of Mäori children (2-14 years) and 23% of Pacific children were obese, compared with 6% of children of European/Other ethnicity and 6% of Asian children. Among adults, 42% of Mäori and 64% of Pacific adults were obese, compared with 24% of adults of European/Other ethnicity and 11% of Asian adults.

Overweight and obesity in New Zealand children
(2-14 years, age standardised), 2006/07
(Ministry of Health, 2006/07 New Zealand Health Survey)

People with low socio-economic status are another population disproportionately affected by obesity and its health effects. Mäori and Pacific peoples are highly represented in this group. The World Health Organization has identified adverse socio-economic conditions as a probable cause of increased risk of obesity, particularly for women. Socio-economic disadvantage is also associated with diabetes, heart disease, and increased risk of micronutrient deficiencies resulting from inappropriate diet or insufficient food. 

In addition to Mäori, Pacific peoples and people of low socio-economic status, children are a priority group for improving nutrition and reducing and preventing obesity for three reasons. First, due to the increasing rate of obesity among New Zealand children and the increasing incidence of obesity-related conditions, in particular type 2 diabetes. Second, because there is an established risk of childhood overweight persisting into adolescence and adulthood. Third, because, once obesity is established, it is notoriously difficult to correct and evidence to support most treatment methods is unclear. However, virtually all reviews have indicated that the prevention of obesity is not only possible but also is the most realistic and cost-effective approach for dealing with childhood obesity. Research conducted in the United Kingdom has also suggested that prevention efforts should be implemented prior to adolescence, based on the finding that persistent obesity is established before age 11.

The Ministry of Health's strategic framework Healthy Eating – Healthy Action: Oranga Kai – Oranga Pumau (HEHA) is providing an overarching response to the problem of obesity and overweight. Within this, the HSC's healthy eating programme (Feeding our Futures) is contributing to improving children's nutrition and nutrition practices in the home.

Our focus
The overall goal for the healthy eating programme is:

A reduction in the percentage of overweight and obese children in New Zealand, particularly those in Mäori, Pacific and low socio-economic status families.

In the short to medium term, the focus is on improving children's nutrition practices as a key mechanism for preventing and reducing obesity and overweight in 8 to 12-year-olds. This is the target age group for two reasons. First, because evidence from national nutrition surveys showed that the nutritional status of younger children (5-6 year olds) was appreciably better than that of older children, and second, because improving nutrition in this age group is likely to have flow-on benefits as they move into the teenage years and beyond.

While children are the group that will benefit from the healthy eating programme, changes in children's diet and weight are strongly influenced by changes made by their parents and caregivers. The specific goal of the first phase of the Feeding our Futures programme, therefore, is to:

Increase the proportion of parents and caregivers adopting “tips” to provide a healthy diet for children aged 8 to 12 years.

Progress to date
The first phase of the healthy eating programme was developed in 2006/07 and the Feeding our Futures brand and mass media campaign were launched in May 2007.

The campaign provides parents with simple, practical and accessible tips to help them achieve healthy diets for children. Initial tips included eating together regularly as a family, encouraging children to get involved in food preparation and promoting the message that water and milk, not sweet drinks, should be the first choice for children.

The programme provides a national platform for those working in public health to promote improved nutrition and positive eating behaviours in their communities.

Preliminary evaluation of public response to the campaign has shown that, even after a relatively short time, parents and caregivers’ recall of Feeding our Futures advertising was good, with figures ranging from six out of 10 for the most recalled advertisement (ad) to two out of 10 for the least recalled ad. For many of the ads, recall was higher for Mäori and Pacific parents and caregivers than it was for parents and caregivers in the general population. Higher proportions of Mäori and Pacific parents and caregivers (than parents and caregivers in the general population) also said that seeing Feeding our Futures advertising had prompted them to engage in the "tip" promoted by the ad more often. For all parents and caregivers, television was the medium mentioned most often when they were asked where they had seen or heard Feeding our Futures advertising. Around four out of five Mäori  and Pacific parents and caregivers (compared with one in two parents and caregivers in the general population) agreed that, compared with a year ago, they were aware of more things they could do to improve their children’s diet and had a better understanding of how to improve their children’s diet.

A comprehensive survey of parents and caregivers and 5 to 16-year-old children - the New Zealand Children's Food and Drinks Survey - also has been completed to provide baseline information to monitor the impact of the programme. Follow-up survey information will be collected in 2010.

Intermediate Outcomes
The specific goal of the first phase of the healthy eating programme to 2009 is to:

Increase the proportion of parents and caregivers adopting “tips” to provide a healthy diet for children aged 8 to 12 years.

Based on theories of behaviour change (particularly social cognitive theory), achieving the following objectives will realise this goal:

•	Increasing parents and caregivers' motivation to provide a healthy diet for their children.
•	Increasing parents and caregivers’ confidence in their ability to provide a healthy diet for their children [self-efficacy].
•	Increasing parents and caregivers’ knowledge of strategies that can be used to ensure a healthy diet.
•	Increasing parents and caregivers' skills to implement strategies that ensure a healthy diet.
•	Strengthening support for parents and caregivers.
•	Increasing the proportion of parents and caregivers who eat a healthy diet [role-modelling].
•	Ensuring Mäori receive equitable benefit from the healthy eating programme.
•	Ensuring Pacific peoples receive equitable benefit from the healthy eating programme.

The diagram on page 32 shows how these objectives are translated into HSC's intermediate outcomes and how, in turn, these contribute to the longer-term outcomes for healthy eating for 8 to 12-year-olds in New Zealand. The first column in the diagram shows how the work in 2008/09 will contribute to these intermediate outcomes.

Monitoring progress – healthy eating
Intermediate indicators
A set of indicators to measure progress towards achieving intermediate and long-term outcomes has been developed. Measurement began with a baseline survey in 2007/08. 

Indicators include the extent to which:

•	Children take part in practices that increase their understanding, and support consumption, of a healthy diet, eg, helping with food preparation and cooking.
•	Parents and caregivers use practices that support healthy eating, eg, healthy food preparation and mealtime practices (eg, removing fat from meat, using low-fat foods, eating together as a family, healthy snacking to help achieve a healthy diet for their children).
•	Healthy food and beverage options are available in the home and consumed by children.

Progress will be tracked by monitoring trends in these indicators against the baseline results.

Long-term indicators
•	Proportion of children that are overweight and obese.
•	Proportion of children that have improved nutrition (eg, improved consumption of fruit and vegetables).

These long-term indicators will be monitored using data from surveys undertaken by the Ministry of Health.

Managing to increase the proportion of children eating a healthy diet

Healthy Eating
Long-Term
Outcomes

HSC’s Key
Activities

HSC’s
Contributing
Outcomes

•	Feeding our Futures national communications strategies continue to be implemented (see 3.0.1, page 46).		Increasing parents and caregivers' motivation to provide a healthy diet for their children.
Increasing parents and caregivers’ confidence in their ability to provide a healthy diet for their children [self-efficacy].
Increasing parents and caregivers’ knowledge of strategies that can be used to ensure a healthy diet.
Increasing parents and caregivers' skills to implement strategies that ensure a healthy diet.
Increasing the proportion of parents and caregivers who eat a healthy diet [role-modelling].		Increased adoption of healthy nutrition practices, as part of a healthy lifestyle.	
•	Resources developed and distributed to support campaign messages for target audiences, particularly Mäori  and Pacific communities, and the sector (see 3.0.2, page 46).				Increased community action to enable the adoption of healthy nutrition practices.	
•	Partnerships with community-based groups with a focus on Mäori  and Pacific communities established (see 3.0.3, page 47).		Strengthening support for parents and caregivers.
		Increased access to health-supporting physical and social environments.	
•	Partnerships at a national and regional level established and maintained (see 3.0.4, page 47).				Increased capacity of communities to create health-promoting social and physical environments.	
		Mäor receiving equitable benefit from the healthy eating programme. 
Pacific peoples receiving equitable benefit from the healthy eating programme.		Decreased nutrition-related inequalities.	
		Increasing collaboration and integration of activities by agencies working to improve nutrition and reduce obesity.		Decreased risk factors for nutrition-related health problems and chronic diseases that are affected by diet and physical activity.	
				Decreased incidence of complications of chronic diseases that are affected by diet and physical activity.	

Problem gambling

The problem
Gambling-related harm is an emerging public health issue in New Zealand, with significant health, social and economic implications. While gambling is a popular recreational activity and some communities benefit from funds raised from gambling, for many people and their families gambling has harmful consequences and the effects on the community are far reaching.

Problem gambling occurs when people, and often their families or communities, experience harm or distress because of gambling. Problem gambling can affect health, relationships, finances, employment, and children, and the harms from gambling can extend to the entire community. Problem gambling affects several groups disproportionately, including Mäori, Pacific peoples, people who are disadvantaged in socio-economic terms, and some Asian communities.

The 2006/07 New Zealand Health Survey  (Ministry of Health, 2008) found that just over 5% (5.4%) of gamblers were at low risk of their gambling being a problem and 2% were at moderate risk. A further 0.6% of gamblers, 13,000 adults, met the criteria for problem gambling. Almost 3% (2.8%) of adults, 87,000, had experienced problems due to someone's gambling in the previous 12 months. This is consistent with overseas studies that estimate that between five to 10 other people are affected by the behaviour of a serious problem gambler (Productivity Commission, 1999).

The latest New Zealand Health Survey also shows the burden of problem gambling in New Zealand's main ethnic population groups; with Mäori and Pacific adults more than three and a half times more likely than adults in the total population to be problem gamblers.

Statistics released in December 2007 by the Department of Internal Affairs (DIA) show New Zealanders’ gambling spend is on the rise again, after a drop in the two previous years from a peak in 2003/04. This pattern is mirrored by an increase in calls to the Gambling Helpline in 2007 after a drop in 2005 and 2006. Spending on the main forms of gambling increased by 2.2 percent to $2.02 billion in 2006/07 ($1.97 billion in 2005/06). This is due largely to players spending more on non-casino gaming machines (pokies) in pub and clubs.

Expenditure ('Losses') 1992/93-2006/07
(DIA)

Although only a small proportion of the population  have, or are at risk of developing, a serious gambling problem, research in 2006/07 (the Gaming and Betting Activities Survey (GBAS) – National Research Bureau, 2007) provides indicators of the wider impact of gambling on individuals and their families/whänau, for example:

•	16% of people surveyed said that there had been some argument about time or money spent on betting or gambling in their wider family or household 
•	16% said that someone had had to go without something they needed or some bills were not paid because too much was spent on gambling by another person in their wider family or household.

Mäori and Pacific peoples were more likely than people of other ethnicities to say they had experienced both of these consequences of gambling.

Research also shows that New Zealanders are increasingly questioning the social desirability of gambling. A 2005 survey by DIA (DIA, 2008) of participation in, and attitudes to, gambling found that, since the previous survey in 2000, there was an increase in the proportion of people who considered all but one type of gambling socially undesirable (telephone or text games or competitions was the exception).

To counter gambling harms, including problem gambling, New Zealand has adopted a public health approach, and the legislation provides for an integrated problem gambling strategy focused on public health (Gambling Act 2003, Part 4, s.317 ) that is funded by a levy paid by gambling operators to the Crown.

The Ministry of Health is responsible, under the Act, for the prevention and treatment of problem gambling. The Ministry's approach is outlined in a six-year strategic plan – Preventing and Minimising Gambling Harm: Strategic plan 2004-2010 (Ministry of Health, 2005).

The Ministry’s strategy includes provision for a social marketing programme to:

-	encourage New Zealanders to make healthy lifestyle choices about gambling
-	promote discussion about the effects of gambling in the community
-	reduce the incidence of problem gambling among the general population, with a specific emphasis on at-risk populations.

The Ministry has contracted HSC to develop and deliver this social marketing programme. 

Our focus
Consistent with a public health and social marketing approach, HSC's work focuses on changes both upstream and downstream. Upstream changes include denormalising harmful gambling, by getting society to understand and question the issues around gambling harm, and building public support for measures that prevent and minimise gambling harms and create safer families, safer communities, and safer venues and gambling products. Downstream changes include providing support for public health activities and community-led responses that range from increasing individuals' help-seeking behaviour to community action to identify and address gambling harms at the local level.

The programme's messages are targeted at all New Zealand adults. At the same time, strategies are being developed with those groups in the population that are disproportionately affected by gambling harms to reduce inequalities experienced by these groups.

Progress to date
The social marketing programme was launched in April 2007 with 'Kiwi Lives', a mass media campaign that highlights the damaging effect of problem gambling in homes and communities, and aims to increase awareness and understanding of problem gambling and its impacts. The campaign also aims to create a supportive environment for public health and community action.

Evaluation of public response to the campaign has shown that, even after a relatively short time, the 'Kiwi Lives' television commercial (TVC) was recalled by a substantial proportion of the target audience; four population groups were surveyed (Mäori, Pacific peoples, Asian peoples, and a general population group) and between a quarter and one–half of people in these groups could recall the Kiwi Lives TVC when prompted with a description of the advertisement. Feedback also showed that the campaign messages were clearly communicated and the campaign was beginning to achieve one of its key aims of promoting debate and discussion about gambling harms and solutions. Between a sixth and a third of respondents in the four groups surveyed said they discussed problem gambling with others after viewing ‘Kiwi Lives’.

Mäori and Pacific peoples were particularly receptive to the campaign message that problem gambling is a community, not just an individual, issue.

A baseline survey (GBAS) to monitor the impact of the programme was completed in 2007. Results from this survey indicate that the Kiwi Lives campaign is timely, with potential to increase knowledge and understanding about the harms of gambling and strategies that can be used to prevent and minimise harm. There is also scope to increase knowledge and understanding about the range of services to help people experiencing gambling harm and to build confidence in these services.

The next phase of Kiwi Lives, therefore, will continue to increase awareness and understanding of gambling harms and support the promotion of strategies that people and communities can use to identify and respond to gambling harms.

The GBAS provides a snapshot of New Zealanders’ views about gambling and gambling-related harm and these indicate that the majority of people will be responsive to, and supportive of, initiatives that seek to prevent and minimise gambling harm. There is wide support also for a comprehensive response to this issue that involves Government, as well as individuals, families/whänau, communities, and the gambling industry.

The survey is scheduled to be repeated in 2010 to monitor initial responses to the social marketing programme and related public health activities.

Intermediate Outcomes
The overall goal for the problem gambling social marketing programme agreed by HSC and its public health partners is to:

Reduce the incidence of problem gambling and the impact of gambling harms in Aotearoa/New Zealand.

This goal will be realised by:

•	Denormalising harmful gambling.
•	Increasing people’s skills and resilience to prevent and minimise harmful gambling.
•	Increasing protection for individuals, families/whänau, and communities.
•	Reducing the harms of gambling for individuals, families/whänau, and communities.

The diagram on page 38 shows how these objectives are translated into HSC’s intermediate outcomes and how, in turn, these contribute to longer-term outcomes to prevent and minimise gambling harm. The first column in the diagram shows how the work in 2008/09 will contribute to these intermediate outcomes.

Managing to reduce the incidence of problem gambling and the impact of gambling harms in Aotearoa/New Zealand 

HSC's Key Activities

HSC's Contributing Outcomes

Problem Gambling – Long-term Outcomes

•	Problem gambling national communications strategies to increase awareness of gambling-related harms and ways to prevent and minimise gambling harm continued (see 4.0.1, page 48).		Denormalising harmful gambling (by getting society to understand and question the issues around gambling harm, and building public support for measures that prevent and minimise gambling harms). 		Increased and sustained knowledge about gambling harm and support for measures to prevent and minimise gambling harm.	
•	Resources for target groups developed and distributed to support national, regional and local strategies (see 4.0.2, pg 48).		Increasing people’s skills and resilience to prevent and minimise harmful gambling.		Increased family/whänau and community capacity to take action to prevent and minimise gambling harm.	
•	Relationships at national, regional and community levels maintained and developed further to ensure consistent messaging and appropriate responses for different communities (see 4.0.3, page 48).		Increasing protection for individuals, families/whänau, and communities.		Increased access to physical and social environments that prevent and minimise gambling harm.	
•	Monitor for the Problem Gambling programme maintained (see 4.0.4, page 48).		Reducing the harms of gambling for individuals, families/whänau, and communities.		Reduced incidence of problem gambling and gambling-related harm among target populations.	
•	Audience research undertaken to understand motives and barriers to attitude and behaviour change (see 4.0.5, page 49).
				Decreased health inequalities associated with harmful gambling.	

Note: 	Long-term outcomes are based on relevant objectives in the Ministry of Health’s Strategic Plan for Preventing and Minimising Gambling Harm.

Monitoring progress – problem gambling

The GBAS provides a baseline for monitoring the problem gambling programme. Intermediate and long-term indicators include the extent to which:

Intermediate indicators
•	People acquire knowledge of the harms of gambling.
•	People understand how harmful gambling can impact on individuals, families and communities.
•	People identify the occurrence of problem gambling in themselves and others.
•	People understand how individuals, families and whänau, and communities can play a role in minimising the harmful effects of gambling.

Long-term indicators
•	People know where to go, or refer others to, for help and support.
•	People participate in debate and discussion about the place of gambling in their community and community responses to gambling harms.
•	People and communities support and adopt strategies to avoid problem-level gambling and minimise gambling harms.
•	People understand gambling and the potential benefits and drawbacks.

Post-campaign surveys also will be used to evaluate the reach and initial impact of the mass communications strategies.

Sources referenced in Part 1

HSC. 2005. Framework for Reducing Smoking Initiation in Aotearoa-New Zealand. Wellington: HSC.

Productivity Commission (1999). Australia’s Gambling Industries, Report No. 10, AusInfo, Canberra.

Department of Internal Affairs. 2008. People's Participation in, and Attitudes to, Gambling, 1985-2005. Report for the Regulation and Compliance Branch by Research and Evaluation Services. Wellington: Department of Internal Affairs.

Ministerial Committee on Drug Policy. 2007. National Drug Policy 2007-2012. Wellington: Ministry of Health.

Ministry of Health. 2003. Healthy Eating – Healthy Action Oranga Kai – Oranga Pumau: A strategic framework. Wellington: Ministry of Health.

Ministry of Health. (2004). Tracking the obesity epidemic: New Zealand 1977 - 2003. Wellington: Ministry of Health.

Ministry of Health. 2005. Preventing and Minimising Gambling Harm – Strategic Plan 2004-2010. Wellington: Ministry of Health.

Ministry of Health. 2008. A Portrait of Health. Key Results of the 2006/07 New Zealand Health Survey. Wellington: Ministry of Health.

National Research Bureau. 2007. 2006/07 Gaming and Betting Activities Survey: New Zealanders' knowledge, views and experiences of gambling and gambling-related harm. Auckland: NRB.

Paynter, J. 2008. National Year 10 ASH Snapshot Survey, 1999-2007: Trends in tobacco use by students aged 14-15 years. A report for Action on Smoking and Health, Health Sponsorship Council and the Ministry of Health. Auckland: Action on Smoking and Health.

PART 2: Statement of Forecast Service		 Performance									
Output Class One – Marketing Healthy Lifestyles
HSC has developed four areas of focus that incorporate most of our work. These are all contained within Output One. HSC focuses on tobacco control (Smokefree and Auahi Kore) sun safety (SunSmart), healthy eating (Feeding our Futures), and preventing and minimising the harm caused by problem gambling.

Total Cost for Output Class One 2008/09:	$15,302,000 (ex GST).

Consistent with its social marketing and public health approach, HSC’s activities include a number of different strategies to increase healthy lifestyles, including:
•	National communications strategies, which may involve evidence-based, pre-tested, multi-media advertising campaigns, public relations activities, and developing health-branded merchandise and promotional items.
•	Partnerships with national and international agencies (for example the Cancer Society and the Problem Gambling Foundation) to deliver national initiatives, policies and guidelines.
•	Partnerships at a community level, which involves HSC working with local groups and national organisations to encourage community action by mobilising communities to put issues (such as Smokefree/tobacco control and healthy eating) on their agendas, decide the most appropriate ways to address these issues in their communities, and ensure consistency of messages locally and nationally.
•	Relationships with other agencies working in the same, or allied sectors, as the HSC. These relationships range from asking experts to advise and assist the HSC develop and implement its interventions to engaging with a wide range of stakeholders to obtain their buy-in to our work.
•	Resources – HSC designs health education/promotional materials to support its strategies and activities. Promotional resources include items such as websites, posters, stickers, brochures, fridge magnets, apparel, signage, radio advertising and media-release templates. Teaching resources are produced for schools.
•	Monitoring – HSC conducts a series of national survey monitors to track changes in knowledge and behaviour in response to its programmes.

The key activities for 2008/09 for each of HSC’s programmes are described in the sections that follow. 

Tobacco Control

HSC’s tobacco control work contributes towards managing to reduce the incidence of young people becoming frequent or addicted smokers (see page 19 for the intermediate outcomes that contribute to this goal). Key activities for 2008/09 include:

Key Activities	Purpose
	Performance Measure	
1.0.1 National communications strategies targeting young people continued (eg, Smoking Not Our Future (SNOF)).
	o	Positive views about Smokefree/Auahi Kore and negative views about tobacco use increased.
o	Young people motivated to adopt Smokefree/Auahi Kore lifestyles.	o	SNOF campaign reaches target audience, particularly Mäori and Pacific young people – post campaign analysis shows TARP (Target Audience Rating Point) levels met or exceeded.
o	Young people agree that the SNOF campaign promotes Smokefree/Auahi Kore views and encourages cessation - measured by SNOF evaluation.
o	Young people agree that the SNOF campaign promotes anti-tobacco views - measured by SNOF evaluation.
o	Young people report that they are less likely to experiment with tobacco/start smoking - measured by SNOF evaluation.	
1.0.2 Second-hand smoke national communications strategies continued.	o	Parents/caregivers’ awareness of the effect of second-hand smoke resulting from smoking in cars maintained or increased.

o	Parents/caregivers’ motivation and willingness to make cars smokefree maintained or increased.

o	Parents/caregivers’ motivation and willingness to make and keep their homes smokefree maintained or increased.
	o	National mass media campaign, supported by promotion at a community level, continued.

o	Percentage of parents/caregivers reporting no one smoking in the household car is maintained or increases. 

o	Percentage of parents/caregivers reporting that smoking occurred in their home is maintained or decreases.
	
1.0.3 Support provided to communities to increase the number of smokefree outdoor public places (eg, parks and playgrounds.
	o	Number of places where children are exposed to smoking behaviour is reduced.	o	Support provided to at least three regions.	
1.0.4 Communications strategies targeted at Mäori implemented in association with Te Reo Marama and community organisations (using print media, website, and resources such as posters and advertising).
	o	Discussion and understanding among Mäori of the benefits of being Auahi Kore increased.

o	Mäori motivated to create smokefree settings, including smokefree homes and cars.

o	Consistent messages communicated, from mass media to grass roots.

o	Community events and activities that promote the Auahi Kore kaupapa are supported.	o	Activity levels reported six-monthly based on the number of hits on relevant website pages promoting smokefree homes, cars and marae, and the number of requests for resources and resources downloaded from the web site – measured at 31 December 2008 and 30 June 2009.

o	Partnerships with at least 20 community-based Mäori groups to strengthen community action in promoting the Auahi Kore kaupapa.
	
1.0.5 National communications strategies developed for New Zealand adults, including parents and caregivers.
	o	Pro-Smokefree/Auahi Kore and anti-tobacco attitudes increased among adults.	o	Strategies developed (approach and concepts) informed by current evidence (ie, from formative research) - by June 2009.	
1.0.6 Partnerships with organisations to promote Smokefree/Auahi Kore brands and campaign messages to young people.
	o	Smokefree/Auahi Kore awareness and intentions increased by supporting popular youth events, including Smokefreerockquest, and Smokefree Pacifica Beats.	o	Ten or more events staged with Smokefree/Auahi Kore branding and campaign messages promoted. 

o	All events are well attended and HSC branding/messages/smokefree policies (where applicable) are implemented – measured by partners reporting estimated attendances and evidence of how messages are promoted/policies are implemented.
	
1.0.7 Smoking Not Our Future partnered with Quit's youth cessation pilot (txt to quit).	o	Quit's pilot supported by HSC's national communications strategies targeting young people.	o	Partnership established and maintained. 
	
1.0.8 National monitors developed and continued to survey smoking patterns, and pro-Smokefree/Auahi Kore attitudes among the general population, Mäori, Pacific peoples and young people.
	o	Programme objectives monitored.	o	2008/09 NZ Youth Tobacco Survey completed successfully (on time and to budget) and results distributed to the sector.

o	New adult monitor (Health and Lifestyles Survey) established and implemented using in-home survey.	

Sun Safety
HSC’s sun safety work contributes towards reducing the incidence of sun burn in 8 to 12-year-olds.

Key Activities	Purpose
	Performance Measure	
2.0.1 Sun safety national communications strategy (SunSmart) continued.	o	Awareness and understanding of risks posed by ultraviolet radiation (UVR) increased, including increased understanding of the UV Index.

o	Parents and caregivers are motivated to take steps to protect their children from getting sunburnt.
	o	National communications strategy for SunSmart successfully implemented (on time and to budget) by April 2009.

o	Post campaign analysis shows that TARP (Target Audience Rating Point) levels met or exceeded.

o	Initial impact of new campaign assessed (using the Health and Lifestyles Survey) by December 2008.
	
2.0.2 Partnerships with local authorities and community groups established and maintained.
	o	The reach of SunSmart messages to priority audiences is improved.

o	Local authorities and community groups such as Tennis NZ and Surf Lifesaving NZ are supported to develop and implement sun safe policies and practices.	o	Partnerships with local authorities and community groups are established and maintained by 30 June 2009.

o	Partners report increased effectiveness in developing and implementing policies and practices – measured by HSC stakeholder survey.	
2.0.3 Resources developed and distributed to support national, regional and local sun safety strategies.
	o	National communications strategy supported with resources that reinforce campaign messages and support the work of partners and the sector.	o	SunSmart resources developed and delivered to partners and the sector – measured by uptake of resources.

o	Partners report increased effectiveness in promoting the SunSmart objectives – measured by HSC stakeholder survey.	
2.0.4 Relationships with key agencies involved in the provision and dissemination of UV information established and maintained.	o	New Zealanders receive consistent, frequent messages in weather forecasts and media coverage about risks surrounding UVR and how to avoid sunburn.	o	Ninety percent of national media continue to promote supplied UVI information.

o	At least two media releases issued in partnership with NIWA and/or MetService.

o	At least three meetings held with NIWA and/or MetService to align UV work.
	
2.0.5 Partnerships with national and international agencies and organisations established and maintained.
	o	To investigate opportunities to inform national policy development for skin cancer control.

o	To collaborate on national skin cancer control initiatives to ensure consistency of messages and provide a co-ordinated approach.	o	Opportunities for influencing policy development for skin cancer control identified.

o	HSC represented on New Zealand Guidelines Group and Cancer Council Australia, National Skin Cancer Committee.

o	Meet at least four times a year with Cancer Society New Zealand national office.

Healthy Eating – improving nutrition
HSC’s healthy eating work contributes towards increasing the proportion of children eating a healthy diet, particularly those in Mäori, Pacific and low socio-economic status families.

Key Activities	Purpose
	Performance Measure	
3.0.1 Feeding our Futures national communications strategies continue to be implemented.

	o	Parents and caregivers’ motivation to provide a healthy diet for their children maintained.

o	Parents and caregivers’ confidence in their ability to provide a healthy diet for their children continues to increase.

o	Parents and caregivers’ knowledge of strategies that can be used to ensure a healthy diet including promoting consumption of fruit and vegetables increased.

o	Parents and caregivers and families/whänau increasingly understand the benefits of being positive role models for their children and act as positive role models.
	o	National communications strategies for Feeding our Futures 2008/09 successfully implemented by 30 June 2009 (on time and to budget).

o	Post campaign analysis shows that TARP (Target Audience Rating Point) levels met or exceeded.

o	New creative concepts are tested with target audiences.
	
3.0.2 Resources developed and distributed to support campaign messages for target audiences, particularly Mäori and Pacific communities, and the sector.
	o	National communications strategies supported by resources that reinforce campaign messages for parents and caregivers and support the work of the sector.	o	Feeding our Futures resources developed and distributed to community partners – measured by uptake of resources.

o	Community partners report increased effectiveness in promoting healthy eating through use of Feeding our Futures resources – measured through HSC's stakeholder survey.	
3.0.3 Partnerships with community-based groups with a focus on Mäori and Pacific communities established.
	o	Community activity that increases parents and caregivers’ skills to adopt healthy nutrition practices that improve children nutrition supported.

o	National communications strategy messages communicated and reinforced at a community level. 	o	Partnerships established with at least 15 community-based groups and assessed to inform future partnerships.	
3.0.4 Partnerships at a national and regional level established and maintained.

	o	Co-ordination and consistency of messages improved.

o	The reach and consistency of healthy eating messages into local and priority communities improved.

o	National communications strategy messages communicated and reinforced at a community level. 
	o	Memorandum of Understanding with Agencies for Nutrition Action (ANA) maintained and implemented.

o	Partnerships with a number of key groups and organisations (such as Mission On, Te Hotu Manawa Mäori  (THMM), District Health Boards and other relevant government organisations) developed and maintained.

o	Plan for supporting District Health Board Community Action Projects implemented, including delivery of social marketing training.

o	Partner organisations report co-ordinated and consistent messages from national to community level – measured by HSC's stakeholder survey.
	
3.0.5 Research and monitoring for Healthy Eating programme continued.	o	Culturally-specific analysis and interpretation of research/monitor findings (eg, audience research and Children's Food and Drinks Survey) by Mäori and Pacific researchers.

o	Continued dissemination of research/monitor findings.
	o	Research commissioned, completed and disseminated to Mäori and Pacific communities, and the sector.	

Problem Gambling
HSC’s problem gambling work contributes towards reducing the incidence of problem gambling and the impact of gambling harms in Aotearoa/New Zealand.

Key Activities	Purpose
	Performance Measure	
4.0.1 Problem gambling national communications strategies continued, including Kiwi Lives phase 2 and an expanded website serving New Zealanders and the problem gambling sector.	o	New Zealanders (18+ years) learn about and start to use strategies to identify and respond to gambling harms.

o	New Zealanders and the problem-gambling sector have ready access to information and resources about strategies, and sources of support and help.

	o	National communications strategies for New Zealand adults implemented.

o	Post campaign analysis shows that TARP (Target Audience Rating Point) levels met or exceeded.

o	Hits on relevant pages of website and use of links to information sources. 

o	Calls to gambling helpline for information about, and support for, gambling-related harm and problem gambling.
	
4.0.2 Resources for target groups developed and distributed to support national, regional and local strategies.	o	National communications strategies supported by resources, including resources developed with relevant partners, that reinforce campaign messages and support the work of the sector.
	o	Resources distributed and used by partners - measured by uptake of resources.

o	Partners report increased effectiveness in reinforcing campaign messages through using campaign resources – measured through HSC stakeholder survey.
	
4.0.3 Relationships at national, regional and community levels maintained and developed further.	o	Consistent messaging about strategies to identify and respond to gambling harms.

o	Regional activity supported.

o	Appropriate responses to need for information about gambling harm developed (eg, continued work with partners to provide relevant information, and continuing to work with Mäori, Pacific and Asian communities to develop targeted approaches).
	o	Partners report increased co-ordination and effectiveness in addressing gambling-related harm – measured by HSC's stakeholder survey.
	
4.0.4 Monitor for the Problem Gambling programme maintained.	o	Tracking response to programme and attitude and behaviour change continues.	o	Results of baseline survey continue to be analysed and results disseminated and used to inform the development of the programme.
	
4.0.5 Audience research undertaken to increase knowledge of motives and barriers to attitude and behaviour change.
	o	Evidence assembled to inform the direction for future stages of communication strategies.	o	Audience research completed to inform the 2009/10 programme planning and development.

Reporting

The Board of the HSC will provide the Ministry of Health, as the Minister's agent, with the following reports during the period. These reports will be presented in a manner that allows the Minister to assess the extent to which the HSC has delivered the performance specified in this agreement.

Quarterly Reports 

The HSC will by the agreed date following the close of the quarter (ie. 31 October 2008, 31 January 2009, 30 April 2009, 31 July 2009) provide a report detailing financial and non-financial performance against performance measures in this Statement of Intent and the Contract. The reports will include comments on progress against the performance indicators and targets due for completion later the year.

Informal Reports

In addition to the formal reports the HSC will, at any time necessary:

•	Alert the Minister of Health and the Ministry of Health to any emerging factors that could preclude the achievement of any Contract obligation that relates to purchase or ownership performance.
•	Inform the Ministry of Health of any issue likely to be of significance to the Minister of Health.

Reports to Parliament

The HSC will prepare the following reports for the Minister of Health to table in Parliament:

•	Statement of Intent 2009/10.
•	Annual Report 2008/09.

The content and timing of the production of these documents shall comply with the requirements of the Crown Entities Act 2004.

Part 2a: Financial Statements 					

Statement of Responsibility

The Board and Management of HSC accept responsibility of these prospective financial statements and the judgements used herein.

The Board and Management are of the opinion that these prospective financials statements fairly reflect the expected financial position and operations of HSC for the forecast period.
		
Athol Mann							Tracey Bridges
Chairman							Board Member
30 June 2008							30 June 2008

Forecast Statement of Cashflow
	For the 12 months to 
30 June 2008
($000)	For the 12 months to 
30 June 2009
($000)	For the 12 months to 
30 June 2010
($000)	For the 12 months to 
30 June 2011
($000)	
Cashflows From/(Used In) Operating Activities					
Cash from:					
Ministry of Health	16,000	13,407	14,093	13,630	
Land Transport New Zealand	0	0	0	0	
Other	520	631	611	611	
	16,520	14,038	14,704	14,241	
					
Cash disbursed to:					
Payments to Suppliers and Employees	16,299	15,338	15,056	14,626	
	16,299	15,338	15,056	14,626	
					
Net Cashflows from Operating Activities	221	(1,300)	(352)	(385)	
					
Cashflows From/(Used In) Investing Activities					
Cash disbursed to:					
Purchase of Fixed Assets	84	58	54	55	
					
Net Cashflows from Investing Activities	(84)	(58)	(54)	(55)	
					
Net increase (decrease) in Cash Held	137	(1,358)	(406)	(440)	
					
Plus Projected Opening Cash	4,267	4,404	3,046	2,640	
					
Closing Cash Balance	4,404	3,046	2,640	2,200	

Forecast Statement of Output Costs

The following table outlines the anticipated emphasis and size of the HSC's operations over the next three years. 

The programmes are described for the 2008/09 financial year and details of activities are outlined on pages 41 to 49. 

Annual expenditure on initiatives by year (ex GST)

	2007/08
($000)	2008/09
($000)	2009/10
($000)	2010/11
($000)	

Tobacco Control	
8,597	
8,272	
8,030	
8,025	

SunSmart	
1,106	
1,053	
1,030	
1,030	

Healthy Eating	
4,403	
4,402	
3,996	
3,991	

Problem Gambling 	
1,478	
1,575	
2,085	
1.635	

TOTAL
	
15,584	
15,302	
15,141	
14,681	

Forecast Statement of Financial Position

	As at 30 June 2008
($000)	As at 30 June 2009
($000)	As at 30 June 2010
($000)	As at 30 June 2011
($000)	

Equity	
3,658	
2,397	
1,947	
1,507	

Non Current Assets
Property, plant and equipment	

167	

170

170

170
	
Current Assets
Bank/short term investments
Inventory
Accounts receivable	
4,404
160
477	
3,046
150
481
	
2,640
150
467
	
2,200
150
467

Total Current Assets
	
5,041	
3,677	
3,257	
2,817	

Total Assets	
5,208	
3,847	
3,427	
2,987

Current Liabilities
Accounts payable
Sponsorship liabilities
Sundry payables	

850
500
200

850
400
200	

880
400
200	

880
400
200	

Total Current Liabilities	
1,550	
1,450
	
1,480
	
1,480
	
Net Assets	3,658	2,397	1,947	1,507

Forecast Statement of Financial Performance

	For the 12 months to
30 June 2008
($000)	For the 12 months to
30 June 2009
($000)	For the 12 months to
30 June 2010
($000)	For the 12 months to
30 June 2011
($000)	

Revenue

Crown revenue: 
Ministry of Health 
Other

14,378
520

13,410
631

14,080
611

13,630
611
	
Total Revenue	14,898	14,041	14691	14,241	

Expenditure
Community partnerships and sponsorships
Depreciation
Employee benefits 
Health promotion resources
Research and development
Media and communications
Other expenditure

Total Expenditure	

1,312
45
1,717
533
1,738
8,379
1,860

15,584	

1,505
45
2,376
440
1,385
7,338
2,213

15,302	

1,480
60
2,424
432
1,361
7,211
2,173

15,141	

1,417
60
2,496
414
1,303
6,907
2,084

14,681	

Operating Surplus/ (Deficit) for Year 

(686)	

(1,261)	

(450)	

(440)	

Note: The 2007/08 forecast figures differ from those in the 2007/08 Statement of Intent. This is due to the receipt of additional funding during 2007/08 and subsequent additional expenditure.

Forecast Statement of Movements in Equity

	For the 12 months
to 30 June 2008
($000)	For the 12 months
to 30 June 2009
($000)	For the 12 months
to 30 June 2010
($000)	For the 12 months
to 30 June 2011
($000)	

Opening Equity	
4,344	
3,658	
2,397	
1,947	

Operating Surplus/(Deficit) for Year 

(686)	

(1,261)	

(450)	

(440)	

Closing Equity	
3,658
	
2,397	
1,947	
1,507	

Statement of Accounting Policies

Reporting entity and statutory base
These are the prospective financial statements of the Health Sponsorship Council (HSC), prepared in accordance with the Crown Entities Act 2004 and the Smoke-free Environments Act 1990. 

The prospective financial statements have been prepared for the special purpose of the 2008/09 Statement of Intent (SOI) of the HSC to the Minister of Health. They are not prepared for any other purpose and should not be relied upon for any other purpose.
These statements will be used in the Annual Report as the budgeted figures.

The preceding SOI narrative informs the prospective financial statements and the document should be read as a whole.

Statement of compliance
These forecast financial statements comprise prospective financial statements and have been prepared in accordance with New Zealand Financial Reporting Standard No. 42: Prospective Financial Statements (FRS-42).

These are the HSC’s first forecast financial statements prepared under New Zealand equivalents of International Financial Reporting Standards (NZ IFRS). In line with all Crown Entities the HSC adopted NZ IRFS for the first time on 1 July 2007. 

Basis of preparation
The preparation of forecast financial statements in conformity with FRS-42 requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual financial results achieved for the period covered are likely to vary from the information presented, and the variations may be material.

Measurement system
The Financial Statements have been prepared using the historical cost method.

Accounting policies
The accounting policies outlined below are in line with terms of section 154 of the Crown Entities Act 2004 and are in a format consistent with generally accepted accounting practice. 

The following accounting policies, which significantly affect the measurement of financial performance and of financial position, have been consistently applied.

Budget figures
The budget figures have been prepared in accordance with generally accepted accounting practice and are consistent with the accounting policies adopted by the HSC for the preparation of the financial statements. The HSC is responsible for the forecast financial statements presented, including the appropriateness of the assumptions underlying the forecast financial statements and all other required disclosure. It is not intended to update the forecast financial statements subsequent to publication of these statements.

Revenue
Revenue is recognised as income when earned and is reported in the financial period to which it relates. 

Taxation
The HSC is not subject to income tax as it is a public authority in terms of the Income Tax Act 1994.

Operating leases
Operating lease payments, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items, are charged as expenses in the periods in which they are incurred.

Fixed assets
Fixed assets are recorded at cost, less accumulated depreciation.

Depreciation
The annual depreciation rates are shown on below.

Building Fit Out	33% Diminishing Value (DV)
Computers	33% DV
Office Equipment	20% DV
Furniture and Fittings	20% DV

Accounts receivable
Accounts Receivable have been recorded at their estimated realisable value after providing for doubtful and uncollectible debts.

Inventory
Inventory has been recorded on a First In First Out (FIFO) basis at the lower of cost or net realisable value.

Goods and services tax
All amounts in the financial statements are stated exclusive of GST except for Accounts Receivable, Accounts Payable and the portion of Sponsorship Liabilities that relate to promotional expenditure, which are GST inclusive. Where GST is irrecoverable as an input tax then it is recognised as part of the related asset or expense.

Short-term employee benefits
Employee benefits that the HSC expects to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay.

These include salaries and wages accrued up to balance date, and annual leave earned but not yet taken at balance date.

The HSC recognises a liability for sick leave to the extent that absences in the coming year are expected to be greater than the sick leave entitlements earned in the coming year. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that HSC anticipates it will be used by staff to cover those future absences.

Sponsorship liabilities
Sponsorship liabilities are recognised when the HSC enters into a contract for sponsorship.

The HSC may in any year commit itself to expend by way of sponsorship, in the next succeeding year, in aggregate up to 25 percent of the money appropriated by Parliament for the purposes of the HSC for the current year, together with the amount of cash on hand at that point in time (Section 60 of the Smoke-free Environments Act 1990).

Financial instruments
The HSC, as part of its everyday operations, is party to financial instruments that have been recognised in these financial statements. These financial instruments include accounts payable and accounts receivable, cash and short-term deposits. 

Revenues and expenses in relation to all financial instruments are recognised in the Statement of Financial Performance.

Statement of Cash Flows
Cash means cash balances on hand, held in bank accounts, demand deposits and other highly liquid investments in which the HSC invests as part of its day-to-day cash management.

Operating activities include cash received from all income sources of the HSC and records cash payments made for the supply of goods and services.

Investing activities are those activities relating to the acquisition and disposal of non-current assets.

Financing activities comprise the change in equity and debt capital structure of the HSC.

Output costs

The outputs costs, as reported in the Statement of Objectives and Service Performance, report the cost of services for the outputs of the HSC and represent the costs of providing the output.

The HSC has derived the net cost of service for each significant activity of the HSC using the cost allocation system outlined below.

Cost allocation policy
Direct costs are charged directly to significant activities. Indirect costs are charged to significant activities based on the pro-rata costs of the programmes.

Criteria for direct and indirect costs
"Direct costs" are those costs directly attributable to a significant activity.

"Indirect Costs" are those costs that cannot be identified in an economically feasible manner with a specific significant activity.

Cost drivers for allocation of indirect cost
The cost of internal services not directly charged to activities is allocated as overheads using the pro-rata costs of the programmes.

Impact of adoption of NZ IFRS
On 1 July 2007 the HSC adopted NZ IFRS for the first time. Based on a commissioned report on the impact of NZ IFRS on the financial statements of the HSC, the HSC believes that there will be no significant change in equity or profit. It is anticipated however that there will be presentational and disclosure changes.

Changes in Accounting Policies 
There have been no changes in accounting policies since the date of the last audited financial statements, other than the impact of adoption of NZ IFRS as described above. The policies have been applied on a basis consistent with the previous year.

Statement of significant assumptions
The assumptions used in preparing the forecast information are as follows:

Revenue
The stated level of Government funding is based on the contracts that the HSC is aware of at the time of preparation.

Operating Expenditure
Budgeted operating expenditure has been based on historical data, existing business practices or actual business plan projections for 2008/09.  

Opening position for 2008/09
Estimated year end information for 2007/08 is used as the opening position for the 2008/09 budgets.  This closing 2007/08 position is determined based on management’s judgments, estimates and assumptions. 

The HSC has accumulated funds in recent years largely due to funding for new projects and programmes being received late in the financial year. The HSC intends to reduce its accumulated equity in a measured manner designed to make best use of the funds while aiming for a level more appropriate to our circumstances. The accumulated equity will continue to drop during 2008/09 and will be at an optimal level by the end of 2010/11. This optimal level takes into consideration the significant variations in monthly payments to creditors and that the HSC is funded in arrears, thereby necessitating a higher cash position. Negotiations for the new contract (commencing in 2009/10) will include a payment schedule that will allow the optimal level to be achieved.