How many New Zealand Units, if any, were forecast to be sold at auction in financial year 23/24?

Answer

The Budget Economic and Fiscal Update 2023 forecast $894 million worth of units to be sold at auction in the 2023/24 financial year. Using the market price of $54.50 at 31 March 2023, this corresponds to 16,403,670 NZUs. ETS units sold by the Crown are recognised as a liability on the Crown’s balance sheet. Therefore, when auctions do clear and cash is received, a corresponding and equal liability is recognised – offsetting this cash and making ETS auctions balance sheet neutral. The converse is also the case - when auctions do not clear and cash is not received, no liability is registered, meaning the shortfall in cash receipts is balanced by a corresponding reduction in expected liability.