Education

Note 12: Commitments and contingencies
12.1
Schedule of
commitments
Schedule of commitments
By type
Capital commitments
2013
$’000
2012
$’000
Buildings 2,109 13,463
Total capital commitments 2,109 13,463
Lease commitments
Operating leases 12,340 9,955
Total lease commitments 12,340 9,955
By maturity
Capital commitments
One year or less 2,109 13,463
From one to five years – –
Total capital commitments 2,109 13,463
Operating lease commitments
One year or less 4,994 4,147
From one to five years 7,346 5,808
Over five years – –
Total operating lease commitments 12,340 9,955
Total 14,449 23,418
Note: Commitments are GST inclusive where relevant.
Capital commitments generally relate to the outstanding contractual amounts on building works but may be subject to
contract variations.
The department leases buildings, plant and equipment and fleet under operating leases expiring from one to ten
years. Leases generally provide the department with a right of renewal at which time all terms are renegotiated. Lease
payments comprise a base amount plus an incremental contingent rental. Contingent rentals are based on either
movements in the Consumer Price Index or operating criteria.
12.2
Contingent
assets and
liabilities
Contingent assets and liabilities are not recognised in the Statement of Financial Position due to uncertainty regarding
the amount or timing of the underlying claim or obligation.
(a) Unquantifiable contingencies
At 30 June 2013 the department had a number of legal claims against it, generally relating to personal injury arising from
accidents on departmental premises. The Crown Solicitor has advised the department that the estimated personal
injury liability to be $1.725m for 2012–13 ($1.340m for 2011–12).
The department has a number of leases on property it occupies. Some of these leases contain a ‘make good provision’.
A liability for these provisions has not been recognised in the Statement of Financial Position as the department
considers a value of these provisions cannot be reliably measured due to a variety of factors. The majority of leases
cover a five to ten year period and are generally renewed, hence deferring any make good liability.
134 Financial Statements » Notes