Formats and related files
Vote Revenue#
APPROPRIATION MINISTER(S): Minister of Revenue (M57)
APPROPRIATION ADMINISTRATOR: Inland Revenue Department
RESPONSIBLE MINISTER FOR INLAND REVENUE DEPARTMENT: Minister of Revenue
Overview of the Vote#
The Minister of Revenue is responsible for appropriations in the Vote for the 2018/19 financial year covering the following:
- a total of just over $15 million for policy advice and services to other agencies
- a total of just over $647 million for investigations, management of debt and outstanding returns, services to inform the public about entitlements and meeting obligations, and services to process obligations and entitlements
- a total of just over $143 million for departmental capital expenditure for the purchase or development of assets by and for the use of Inland Revenue
- a total of just over $4,794 million for benefits or related expenses, mainly for tax credits, KiwiSaver payments and benefit payments such as child support and paid parental leave
- a total of just over $12 million for borrowing expenses, relating to interest paid on deposit schemes administered by Inland Revenue, and
- a total of $1,290 million for other expenses, mainly for the impairment and write-off of debt and initial fair value write-down on student loans.
The Minister of Revenue is also responsible for a multi-year appropriation of just under $1,139 million for the implementation of business transformation.
The Minister of Revenue is also responsible for a capital injection of just over $98 million to Inland Revenue.
The Minister of Revenue is also responsible for Crown revenue and receipts in the Vote for the 2018/19 financial year covering the following:
- a total forecast of $76,559 million for tax revenue
- a total forecast of $1,111 million for non-tax revenue, and
- a total forecast of $1,529 million for capital receipts.
Details of these appropriations are set out in Parts 2-4.
Details of Appropriations and Capital Injections#
Annual and Permanent Appropriations#
2017/18 | 2018/19 | ||
---|---|---|---|
Titles and Scopes of Appropriations by Appropriation Type | Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
Departmental Output Expenses |
|||
Policy Advice (M57) This appropriation is limited to the provision of advice, including second opinion advice and contributions to policy advice led by other agencies, to support decision-making by Ministers on government policy matters. |
9,397 | 9,397 | 10,608 |
Services to Other Agencies RDA (M57) This appropriation is limited to the provision of services by Inland Revenue to other agencies, where those services are not within the scope of another departmental output expense appropriation in Vote Revenue. |
5,071 | 4,571 | 4,684 |
Investigations (M57) This appropriation is limited to undertaking investigation, audit and litigation activities administered by Inland Revenue. |
152,717 | 148,613 | - |
Management of Debt and Outstanding Returns (M57) This appropriation is limited to activities to prevent returns becoming outstanding and debt becoming overdue, and to collect outstanding returns and overdue payments, whether for the Crown, other agencies or external parties. |
139,944 | 135,679 | - |
Services to Inform the Public About Entitlements and Meeting Obligations (M57) This appropriation is limited to providing information and assistance to the public to make them aware of their obligations and entitlements. This also includes the provision of services to help Ministers fulfil their responsibilities to Parliament and the New Zealand public, other than policy decision-making responsibilities. |
232,249 | 225,419 | - |
Services to Process Obligations and Entitlements (M57) This appropriation is limited to both the registration, assessment and processing of tax obligations and other entitlements, including associated review and Crown accounting activities, and the collection and sharing of related information with other agencies. |
105,056 | 102,755 | - |
Total Departmental Output Expenses |
644,434 | 626,434 | 15,292 |
Departmental Capital Expenditure |
|||
Inland Revenue Department - Capital Expenditure PLA (M57) This appropriation is limited to the purchase or development of assets by and for the use of the Inland Revenue Department, as authorised by section 24(1) of the Public Finance Act 1989. |
123,096 | 123,095 | 143,200 |
Total Departmental Capital Expenditure |
123,096 | 123,095 | 143,200 |
Benefits or Related Expenses |
|||
Best Start Tax Credit PLA (M57) This appropriation is limited to Best Start Tax Credits made to eligible recipients in accordance with section 185 of the Tax Administration Act 1994. |
- | - | 80,000 |
Child Support Payments PLA (M57) Child support payments to custodial persons who are not dependent on the state for financial support (expenses incurred pursuant to section 141 of the Child Support Act 1991). |
288,000 | 288,000 | 300,000 |
Child Tax Credit PLA (M57) Extra assistance for low to middle income families who are not dependent on the state for financial support (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
800 | 800 | 600 |
Family Tax Credit PLA (M57) Family Support payments made to beneficiaries and non-beneficiaries during the year (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
1,696,000 | 1,696,000 | 2,628,000 |
In-Work Tax Credit PLA (M57) Extra assistance for low to middle income families where the person works a minimum of 20 hours per week and does not have a partner, or a person and their partner work a minimum of 30 hours per week (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
533,000 | 533,000 | 540,000 |
KiwiSaver: Interest (M57) To enable the payment of interest on KiwiSaver contributions as set out in the KiwiSaver Act 2006. |
10,000 | 8,000 | 10,000 |
KiwiSaver: Tax Credit (M57) To enable the payment of a tax credit to KiwiSaver members and the payment of residual tax credits to employers as set out in the Income Tax Act 2007. |
832,000 | 822,000 | 850,000 |
Minimum Family Tax Credit PLA (M57) Extra payment made to families where at least one parent is working for salary or wages (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
12,000 | 12,000 | 14,000 |
Paid Parental Leave Payments (M57) This appropriation is limited to Paid Parental Leave Payments made to parents in accordance with the Parental Leave and Employment Protection Act 1987. |
297,000 | 287,000 | 360,000 |
Parental Tax Credit PLA (M57) This appropriation is limited to expenses incurred on parental tax credit as provided for in subpart MD of the Income Tax Act 2007 and as authorised by section 185 of the Tax Administration Act 1994. |
29,000 | 29,000 | 5,000 |
Payroll Subsidy PLA (M57) This appropriation is limited to the payment of a subsidy to a payroll agent undertaking employers' payroll-related tax compliance activities on their behalf, section 185 of the Tax Administration Act 1994. |
7,600 | 7,600 | 6,500 |
Total Benefits or Related Expenses |
3,705,400 | 3,683,400 | 4,794,100 |
Non-Departmental Borrowing Expenses |
|||
Adverse Event Interest PLA (M57) This appropriation is limited to interest on Adverse Event Income Equalisation Reserve accounts held by taxpayers in the farming and agriculture business, authorised by section 65ZH(1) of the Public Finance Act 1989. |
10 | 10 | 10 |
Environmental Restoration Account Interest PLA (M57) This appropriation is limited to interest on Environmental Restoration accounts, authorised by section 65ZH(1) of the Public Finance Act 1989. |
2,000 | 2,000 | 2,000 |
Income Equalisation Interest PLA (M57) This appropriation is limited to interest on Income Equalisation Reserve Scheme accounts held by taxpayers in the farming, fishing or forestry industries, authorised by section 65ZH(1) of the Public Finance Act 1989. |
7,000 | 7,000 | 10,000 |
Total Non-Departmental Borrowing Expenses |
9,010 | 9,010 | 12,010 |
Non-Departmental Other Expenses |
|||
Impairment of Debt and Debt Write-Offs (M57) This appropriation is limited to bad debt write-offs for Crown debt administered by Inland Revenue, excluding child support and student loans and to amounts relating to the impairment of this debt. |
800,000 | 640,000 | 680,000 |
Initial Fair Value Write-Down Relating to Student Loans (M57) This appropriation is limited to the initial fair value write-down of student loans. |
638,000 | 615,000 | 610,000 |
Impairment of Debt Relating to Child Support (M57) This appropriation is limited to the impairment of child support debt. |
5,000 | - | - |
Impairment of Debt Relating to Student Loans (M57) This appropriation is limited to the impairment of student loan debt. |
66,000 | - | - |
Total Non-Departmental Other Expenses |
1,509,000 | 1,255,000 | 1,290,000 |
Multi-Category Expenses and Capital Expenditure |
|||
Services for Customers MCA (M57) The single overarching purpose of this appropriation is to deliver a customer-centric, integrated tax and entitlement service experience for New Zealanders that is agile and intelligence-led. |
- | - | 647,659 |
Departmental Output Expenses |
|||
Investigations This category is limited to undertaking investigation, audit and litigation activities administered by Inland Revenue. |
- | - | 171,983 |
Management of Debt and Outstanding Returns This category is limited to activities to prevent returns becoming outstanding and debt becoming overdue, and to collect outstanding returns and overdue payments, whether for the Crown, other agencies or external parties. |
- | - | 152,255 |
Services to Inform the Public About Entitlements and Meeting Obligations This category is limited to providing information and assistance to the public to make them aware of their obligations and entitlements. This also includes the provision of services to help Ministers fulfil their responsibilities to Parliament and the New Zealand public, other than policy decision-making responsibilities. |
- | - | 207,949 |
Services to Process Obligations and Entitlements This category is limited to both the registration, assessment and processing of tax obligations and other entitlements, including associated review and Crown accounting activities, and the collection and sharing of related information with other agencies. |
- | - | 115,472 |
Total Multi-Category Expenses and Capital Expenditure |
- | - | 647,659 |
Total Annual and Permanent Appropriations |
5,990,940 | 5,696,939 | 6,902,261 |
Multi-Year Appropriations#
Type, Title, Scope and Period of Appropriations | Appropriations, Adjustments and Use | $000 |
---|---|---|
Departmental Other Expenses |
||
Transformation (M57) This appropriation is limited to the design and implementation of a modern system for tax revenue and social policy administered by Inland Revenue.Commences: 01 July 2017 Expires: 30 June 2021 |
Original Appropriation | 1,112,607 |
Adjustments to 2016/17 | - | |
Adjustments for 2017/18 | 26,254 | |
Adjusted Appropriation | 1,138,861 | |
Actual to 2016/17 Year End | - | |
Estimated Actual for 2017/18 | 220,168 | |
Estimated Actual for 2018/19 | 320,876 | |
Estimated Appropriation Remaining | 597,817 |
Total Annual and Permanent Appropriations and Multi-Year Appropriation Forecasts#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Annual and Permanent Appropriations | 5,990,940 | 5,696,939 | 6,902,261 |
Total MYA Departmental Other Expenses Forecasts | 220,168 | 220,168 | 320,876 |
Total Annual and Permanent Appropriations and Multi-Year Appropriation Forecasts |
6,211,108 | 5,917,107 | 7,223,137 |
Capital Injection Authorisations#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Inland Revenue Department - Capital Injection (M57) | 58,600 | 58,600 | 98,200 |
Supporting Information#
Part 1 - Vote as a Whole#
1.1 - New Policy Initiatives
Policy Initiative | Appropriation | 2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Budget 2018 Research and Development Tax Credit Implementation | Services for Customers MCA | |||||
Services to Inform the Public About Entitlements and Meeting Obligations |
- | 480 | 600 | 320 | 320 | |
Services to Process Obligations and Entitlements |
- | 600 | 750 | 400 | 400 | |
Investigations |
- | 120 | 150 | 80 | 80 | |
Multi-Category Expenses | ||||||
Budget 2018 Tax Compliance Activity - Funding to Collect Additional Revenue | Policy Advice | - | 950 | 950 | 700 | 400 |
Departmental Output Expenses | ||||||
Services for Customers MCA | ||||||
Management of Debt and Outstanding Returns |
- | 5,850 | 5,850 | 5,900 | 5,900 | |
Multi-Category Expenses | ||||||
Impairment of debt and debt write offs | - | 10,700 | 15,000 | 15,000 | 15,000 | |
Non-Departmental Other Expenses | ||||||
Changes made during passage of the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill | Payroll Subsidy PLA Non-Departmental Other Expenses |
1,700 | 6,500 | 3,900 | - | - |
Extending Paid Parental Leave to 26 weeks | Paid Parental Leave Non-Departmental Benefits or Related Expenses |
- | 66,000 | 68,700 | 142,700 | 148,400 |
Families Package Implementation | Services for Customers MCA | |||||
Services to Inform the Public About Entitlements and Meeting Obligations |
- | 1,010 | 410 | 350 | 350 | |
Services to Process Obligations and Entitlements |
- | 2,050 | 840 | 710 | 710 | |
Multi-Category Expenses | ||||||
Best Start PLA Non-Departmental Benefits or Related Expenses |
- | 80,000 | 231,000 | 373,000 | 451,000 | |
Family Tax Credit PLA Non-Departmental Benefits or Related Expenses |
(97,000) | 540,000 | 530,000 | 520,000 | 510,000 | |
Minimum Family PLA | - | 1,300 | 1,300 | 1,300 | 1,300 | |
Non-Departmental Benefits or Related Expenses | ||||||
Parental Tax Credit PLA | - | (28,000) | (27,000) | (26,000) | (25,000) | |
Non-Departmental Benefits or Related Expenses | ||||||
First year fees-free in 2018 | Initial Fair Value Write-Down Relating to Student Loans Non-Departmental Other Expenses |
(52,627) | (70,465) | (71,951) | (68,526) | (72,383) |
Increase student allowance and living costs loans by $50 | Initial Fair Value Write-Down Relating to Student Loans Non-Departmental Other Expenses |
24,813 | 56,005 | 59,106 | 61,271 | 63,302 |
Tertiary Education Annual Maximum Fee Movement | Initial Fair Value Write-Down Relating to Student Loans Non-Departmental Other Expenses |
- | 1,272 | 2,107 | 2,270 | 2,329 |
Budget 2017 Family Incomes Package Implementation | Services to Inform the Public About Entitlements and Meeting Obligations | 800 | - | - | - | - |
Departmental Output Expenses | ||||||
Services to Process Obligations and Entitlements | 1,600 | - | - | - | - | |
Departmental Output Expenses | ||||||
Total Initiatives | (120,714) | 674,372 | 821,712 | 1,029,475 | 1,102,108 |
1.2 - Trends in the Vote#
Summary of Financial Activity#
2013/14 | 2014/15 | 2015/16 | 2016/17 | 2017/18 | 2018/19 | 2019/20 | 2020/21 | 2021/22 | ||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual $000 |
Actual $000 |
Actual $000 |
Actual $000 |
Final Budgeted $000 |
Estimated Actual $000 |
Departmental Transactions Budget $000 |
Non- Departmental Transactions Budget $000 |
Total Budget $000 |
Estimated $000 |
Estimated $000 |
Estimated $000 |
|
Appropriations |
||||||||||||
Output Expenses | 8,673 | 10,522 | 11,050 | 11,386 | 14,468 | 13,968 | 15,292 | - | 15,292 | 14,807 | 14,546 | 14,246 |
Benefits or Related Expenses | 3,678,047 | 3,708,849 | 3,550,477 | 3,621,139 | 3,705,400 | 3,683,400 | N/A | 4,794,100 | 4,794,100 | 4,928,400 | 5,166,400 | 5,325,300 |
Borrowing Expenses | 8,908 | 5,176 | 7,907 | 6,783 | 9,010 | 9,010 | - | 12,010 | 12,010 | 12,010 | 12,000 | 12,000 |
Other Expenses | 2,046,945 | 1,614,494 | 1,414,087 | 1,288,208 | 1,729,168 | 1,475,168 | 320,876 | 1,290,000 | 1,610,876 | 1,553,086 | 1,679,731 | 1,551,754 |
Capital Expenditure | 44,691 | 32,388 | 61,115 | 100,661 | 123,096 | 123,095 | 143,200 | - | 143,200 | 150,000 | 168,800 | 40,000 |
Intelligence and Security Department Expenses and Capital Expenditure | - | - | - | - | - | - | - | N/A | - | - | - | - |
Multi-Category Expenses and Capital Expenditure (MCA) | ||||||||||||
Output Expenses | 690,881 | 693,478 | 652,182 | 635,477 | 629,966 | 612,466 | 647,659 | - | 647,659 | 555,068 | 484,015 | 474,359 |
Other Expenses | - | - | - | - | - | - | - | - | - | - | - | - |
Capital Expenditure | - | - | - | - | - | - | N/A | - | - | - | - | - |
Total Appropriations |
6,478,145 | 6,064,907 | 5,696,818 | 5,663,654 | 6,211,108 | 5,917,107 | 1,127,027 | 6,096,110 | 7,223,137 | 7,213,371 | 7,525,492 | 7,417,659 |
Crown Revenue and Capital Receipts |
||||||||||||
Tax Revenue | 56,207,968 | 59,747,539 | 63,401,693 | 69,222,866 | 72,193,000 | 72,193,000 | N/A | 76,559,000 | 76,559,000 | 81,520,000 | 86,279,000 | 91,246,000 |
Non-Tax Revenue | 1,456,383 | 1,152,579 | 1,161,292 | 1,143,664 | 1,106,500 | 1,106,500 | N/A | 1,111,000 | 1,111,000 | 1,114,700 | 1,115,400 | 1,112,100 |
Capital Receipts | 1,111,028 | 1,388,866 | 1,424,519 | 1,331,379 | 1,433,000 | 1,433,000 | N/A | 1,529,000 | 1,529,000 | 1,615,000 | 1,701,000 | 1,791,000 |
Total Crown Revenue and Capital Receipts |
58,775,379 | 62,288,984 | 65,987,504 | 71,697,909 | 74,732,500 | 74,732,500 | N/A | 79,199,000 | 79,199,000 | 84,249,700 | 89,095,400 | 94,149,100 |
Note - where restructuring of the vote has occurred then, to the extent practicable, prior years information has been restated as if the restructuring had occurred before the beginning of the period covered. In this instance Total Appropriations for the Budgeted and Estimated Actual year may not equal Total Appropriations in the Details of Appropriations and Capital Injections.
Adjustments to the Summary of Financial Activity Table Due to Vote Restructuring#
2013/14 Adjustments $000 |
2014/15 Adjustments $000 |
2015/16 Adjustments $000 |
2016/17 Adjustments $000 |
2017/18 Final Budgeted Adjustments $000 |
2017/18 Estimated Actual Adjustments $000 |
|
---|---|---|---|---|---|---|
Appropriations |
||||||
Output Expenses | (690,881) | (693,478) | (652,182) | (635,477) | (629,966) | (612,466) |
Benefits or Related Expenses | - | - | - | - | - | - |
Borrowing Expenses | - | - | - | - | - | - |
Other Expenses | - | - | - | - | - | - |
Capital Expenditure | - | - | - | - | - | - |
Intelligence and Security Department Expenses and Capital Expenditure | - | - | - | - | - | - |
Multi-Category Expenses and Capital Expenditure (MCA) | ||||||
Output Expenses | 690,881 | 693,478 | 652,182 | 635,477 | 629,966 | 612,466 |
Other Expenses | - | - | - | - | - | - |
Capital Expenditure | - | - | - | - | - | - |
Total Appropriations |
- |
- |
- |
- |
- |
- |
Crown Revenue and Capital Receipts |
||||||
Tax Revenue | - | - | - | - | - | - |
Non-Tax Revenue | - | - | - | - | - | - |
Capital Receipts | - | - | - | - | - | - |
Total Crown Revenue and Capital Receipts |
- | - | - | - | - | - |
The adjustments in the table above reflect the new Multi-Category Appropriation - Services for Customers. The prior year information in the Summary of Financial Activity table has been restated to reflect the current Vote structure.
1.3 - Analysis of Significant Trends#
Departmental Output Expenses
Inland Revenue's Departmental output expenses have decreased from $700 million in 2013/14 to an estimated amount of just over $626 million in 2017/18 and a budgeted amount of just under $663 million in 2018/19.
Beyond 2018/19, Departmental output expenses will continue to reduce, reflecting productivity savings resulting from Inland Revenue's multi-year transformation. Alongside improved customer services and increased policy agility, the transformation will result in Inland Revenue being a more effective and efficient organisation that can achieve higher levels of performance with fewer resources.
The one-off increase in expenditure in 2018/19 is mainly due to:
- expenditure transfers from one-off efficiencies realised in 2017/18 to support the temporary changes in operating costs as Inland Revenue implements its transformation programme, and
- additional funding received from the Families Package Implementation, Budget 2018 Research and Development Tax Credit Implementation, and Budget 2018 Tax Compliance Activity - Funding to Collect Additional Revenue.
Departmental Other Expenses
The Departmental other expenses category incorporates one multi-year appropriation (MYA) for Inland Revenue's transformation, covering 2017/18, 2018/19, 2019/20 and 2020/21. For completeness, transformation costs are also shown for the pre-MYA years 2015/16 to 2016/17 as well as the estimated amount for 2021/22 which will be covered by an annual Transformation appropriation.
This appropriation covers expenditure for the multi-year, business-led, technology-enabled transformation of New Zealand's revenue system. As this is a multi-year appropriation, the amounts are indicative of the spend in each of the individual years.
Non-Departmental Benefits or Related Expenses
Non-Departmental benefits or related expenses include appropriations for KiwiSaver, Working for Families Tax Credits, Best Start tax credit, payroll subsidy, paid parental leave payments and child support payments to custodial persons.
Total Non-Departmental benefits or related expenses remained relatively static from 2013/14 to 2017/18. Fluctuations occur because an improving economy steadily increases KiwiSaver tax credits, child support payments to custodial persons, and paid parental leave payments. Conversely an improving economy reduces Working for Families entitlements as incomes grow, and this caused some of the downwards trend in 2015/16.
The increase in Non-Departmental benefits or related expenses from 2018/19 is the result of Families Package policy changes. Working for Families Tax Credits are substantially increased from 1 July 2018 due to the aforementioned policy changes which increase the family tax credit per-child entitlements for most families. The threshold for abatement of entitlements also increases, meaning fewer families face abatement. Income growth sees Working for Families entitlements decrease overall from 2019/20 onwards until 2021/22 where there is a small increase due to a forecast indexation adjustment in April 2021.
The Best Start tax credit, which is also part of the Families Package, commences from 1 July 2018. Expenditure on Best Start increases steadily over the forecast period as the policy phases in.
Paid parental leave is also increased by an extension to 22 weeks' entitlement from July 2018, and to 26 weeks from July 2020.
Non-Departmental Borrowing Expenses
Non-Departmental borrowing expenses include interest payments for the income equalisation, adverse event, and environmental restoration account schemes. The interest payable varies with the size of the deposits in these schemes. These schemes are designed to allow taxpayers to smooth income between tax years - either to smooth out variability in incomes or to set aside income to deal with an adverse event or provide for environmental restoration costs.
Actual results to date are variable and reflect deposit balances in the schemes. The forecast for interest expense in 2017/18 reflects the expected level of the schemes' activity for the remainder of the year. From 2018/19 the forecast includes a provision for a potential increase in activity.
Non-Departmental Other Expenses
Non-Departmental other expenses include bad debt write-offs, the initial fair value write-down on student loans. Impairments relating to student loans, child support, general tax, KiwiSaver, and Working for Families Tax Credits debt are also included.
The large reduction from 2013/14 to 2016/17 resulted from both significantly lower than forecast debt impairment mainly due to a material fall in the overdue debt book over the period and a change in accounting standards affecting the way we recognise impairment relating to child support debt in the year ended 30 June 2015.
From 2017/18 the level of Non-Departmental other expenses stabilises.
Non-Departmental Tax Revenue
Non-Departmental tax revenue incorporates unconsolidated source deductions (PAYE), other persons' tax, fringe benefit tax, corporate tax including company tax, other direct income tax, GST and other indirect tax administered by Inland Revenue.
Total tax revenue is forecast to continue to grow over the next five years at an average rate of 5.7% per annum, above nominal gross domestic product (GDP) growth which averages around 5%. Taxes paid by individuals such as PAYE and other persons' tax, are forecast to grow faster than GDP. This is due to an increasing average tax rate as incomes grow (known as fiscal drag), and because salary and wage incomes are forecast to grow slightly faster than GDP. Net company tax is forecast to outpace GDP growth, mainly owing to previously announced policy measures such as the base erosion and profit shifting policy (BEPS) which commences June 2019.
GST is the second largest tax type administered by Inland Revenue after PAYE and is forecast to, on average, grow in line with GDP. An expected recovery in deposit interest rates from recent lows is forecast to increase resident withholding tax on interest income.
The forecasts include additional revenue amounts arising from the implementation of Inland Revenue's Business Transformation programme, starting at $90 million in the year to June 2019, and rising to $540 million per annum by 2021/22.
Non-Departmental Non-Tax Revenue
Non-Departmental non-tax revenue incorporates child support collections from non-custodial parents, student loan interest unwind (interest income due to reversing the initial fair value write-down over the life of the loan), unclaimed monies, and interest and penalties on Working for Families Tax Credits debt.
The large reduction in 2014/15 reflected a change in accounting standards affecting the way we recognise child support penalty revenue. Under the new accounting standards, child support revenue is initially recognised at fair value.
Non-Departmental Capital Receipts
Non-Departmental capital receipts include student loan capital repayments and deposits into the adverse event income equalisation, income equalisation, and environmental restoration account schemes.
The lower receipts in 2013/14 and 2016/17 reflect lower income equalisation reserve scheme receipts. Receipts in this scheme are forecast to stabilise from 2017/18. The growth seen in 2018/19 and future years is attributable to higher forecast student loan capital repayments, which have a steadily increasing trend each year as incomes grow.
1.4 - Reconciliation of Changes in Appropriation Structure#
Old Structure | New Structure | |||||
---|---|---|---|---|---|---|
2017/18 Appropriations in the 2017/18 Structure |
2017/18 (Current) $000 |
Appropriations to which Expenses (or Capital Expenditure) have been Moved from or to |
Amount Moved $000 |
2017/18 Appropriations in the 2018/19 Structure |
2017/18 (Restated) $000 |
2018/19 $000 |
Departmental Output Expenses |
||||||
Investigations | 152,717 | Transferred to Multi-Category Appropriation: Services for Customers-Investigations | (152,717) | - | - | |
Management of Debt and Outstanding Returns | 139,944 | Transferred to Multi-Category Appropriation: Services for Customers-Management of Debt and Outstanding Returns | (139,944) | - | - | |
Services to Inform the Public About Entitlements and Meeting Obligations | 232,249 | Transferred to Multi-Category Appropriation: Services for Customers-Services to Inform the Public About Entitlements and Meeting Obligations | (232,249) | - | - | |
Services to Process Obligations and Entitlements | 105,056 | Transferred to Multi-Category Appropriation: Services for Customers-Services to Process Obligations and Entitlements | (105,056) | - | - | |
|
Multi-Category Appropriations: Services for CustomersMulti-Category Appropriations: Services for Customers |
|||||
- | Transferred from Departmental Output Appropriation: Investigations | 152,717 | Investigations | 152,717 | 171,983 | |
- | Transferred from Departmental Output Appropriation: Management of Debt and Outstanding Returns | 139,944 | Management of Debt and Outstanding Returns | 139,944 | 152,255 | |
- | Transferred from Departmental Output Appropriation: Services to Inform the Public About Entitlements and Meeting Obligations | 232,249 | Services to Inform the Public About Entitlements and Meeting Obligations | 232,249 | 207,949 | |
- | Transferred from Departmental Output Appropriation: Services to Process Obligations and Entitlements | 105,056 | Services to Process Obligations and Entitlements | 105,056 | 115,472 | |
Non-Departmental Benefits or Related Expenses |
||||||
Best Start PLA | N/A | N/A | N/A | N/A | N/A | 80,000 |
Total changes in Appropriation Structure |
629,966 |
- |
629,966 |
727,659 |
The purpose of the Services for Customers multi-category appropriation is to deliver a customer-centric, integrated tax and entitlement service experience for New Zealanders that is agile and intelligence-led.
Explanations of the reasons for changing the appropriation structure are noted in the details of each appropriation in Parts 2-4.
Part 2 - Details of Departmental Appropriations#
2.1 - Departmental Output Expenses#
Policy Advice (M57)
Scope of Appropriation
Expenses and Revenue
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 9,397 | 9,397 | 10,608 |
Revenue from the Crown | 9,384 | 9,384 | 10,595 |
Revenue from Others | 13 | 13 | 13 |
What is Intended to be Achieved with this Appropriation
This appropriation is intended to provide policy advice to support decision-making by Ministers on tax and social policy matters, to protect and maintain the integrity of the tax system while ensuring that our tax system is as simple as possible and is internationally competitive.
How Performance will be Assessed and End of Year Reporting Requirements
2017/18 | 2018/19 | ||
---|---|---|---|
Assessment of Performance | Final Budgeted Standard |
Estimated Actual |
Budget Standard |
Primary measures# |
|||
Percentage of ministerial satisfaction for policy advice. |
80% | 80% | 90% |
Percentage of sampled reports that meet quality standards (see Note 1). |
75% | 75% | 80% |
Average cost per hour of producing policy advice outputs. |
$150.00 or less | $150.00 or less | $150.00 or less |
Note 1 - A quality score of 70% or better.
These policy performance measures cover the breadth of Inland Revenue's policy advice (tax, social policy and KiwiSaver).
End of Year Performance Reporting
Performance information for this appropriation will be reported by Inland Revenue in the department's Annual Report 2019.
Current and Past Policy Initiatives
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Current Government |
||||||
Budget 2018 Tax Compliance Activity - Funding to Collect Additional Revenue | 2018/19 | - | 950 | 950 | 700 | 400 |
Reasons for Change in Appropriation
This increase in 2018/19 is mainly due to:
- additional funding of $950,000 for the Budget 2018 initiative: Tax Compliance Activity - Funding to Collect Additional Revenue, and
- a transfer of $135,000 from 2017/18 to 2018/19 as a result of efficiencies and other savings made in the 2017/18 financial year.
Services to Other Agencies RDA (M57)#
Scope of Appropriation#
Expenses and Revenue#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 5,071 | 4,571 | 4,684 |
Revenue from the Crown | - | - | - |
Revenue from Others | 5,071 | 4,571 | 4,684 |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to provide support services to other government agencies, such as the provision of a hosted financial management information system and shared financial transactional services.
How Performance will be Assessed and End of Year Reporting Requirements#
2017/18 | 2018/19 | ||
---|---|---|---|
Assessment of Performance | Final Budgeted Standard |
Estimated Actual |
Budget Standard |
Primary measures# |
|||
Percentage of satisfaction of the Department of Internal Affairs for services provided. |
70% | 75% | 75% |
Percentage of satisfaction of the New Zealand Productivity Commission for services provided. |
70% | 85% | 90% |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by Inland Revenue in the department's Annual Report 2019.
2.2 - Departmental Other Expenses#
Transformation (M57)#
Scope of Appropriation and Expenses
Type, Title, Scope and Period of Appropriations | Appropriations, Adjustments and Use | $000 |
---|---|---|
Transformation (M57) This appropriation is limited to the design and implementation of a modern system for tax revenue and social policy administered by Inland Revenue.Commences: 01 July 2017 Expires: 30 June 2021 |
Original Appropriation | 1,112,607 |
Adjustments to 2016/17 | - | |
Adjustments for 2017/18 | 26,254 | |
Adjusted Appropriation | 1,138,861 | |
Actual to 2016/17 Year End | - | |
Estimated Actual for 2017/18 | 220,168 | |
Estimated Actual for 2018/19 | 320,876 | |
Estimated Appropriation Remaining | 597,817 |
What is Intended to be Achieved with this Appropriation
This appropriation is intended to design and implement a modern system for tax revenue and social policy administered by Inland Revenue that meets government priorities and responds to customers' changing expectations. This will lead to the more efficient collection of taxes and distribution of entitlements. It will also have wider benefits for New Zealand, including reduced compliance and operating costs, as well as the more agile delivery of policy changes in the future.
How Performance will be Assessed and End of Year Reporting Requirements
2017/18 | 2018/19 | ||
---|---|---|---|
Assessment of Performance | Final Budgeted Standard |
Estimated Actual |
Budget Standard |
Primary measures# |
|||
Income tax is administered in START. |
N/A | N/A | 30 June 2019 |
Employers are able to send their PAYE information to Inland Revenue on a payday basis (subject to legislation being enacted). |
N/A | N/A | 30 June 2019 |
Working for Families is administered in START. |
N/A | N/A | 30 June 2019 |
End of Year Performance Reporting
Performance information for this appropriation will be reported by Inland Revenue in the department's Annual Report 2019.
Current and Past Policy Initiatives
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Previous Government |
||||||
Business Transformation | 2015/16 | 226,000 | 190,000 | 156,000 | 70,000 | 64,000 |
2.3 - Departmental Capital Expenditure and Capital Injections#
Inland Revenue Department - Capital Expenditure PLA (M57)#
Scope of Appropriation
Capital Expenditure
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Forests/Agricultural | - | - | - |
Land | - | - | - |
Property, Plant and Equipment | 14,000 | 14,000 | 13,000 |
Intangibles | 109,096 | 109,095 | 130,200 |
Other | - | - | - |
Total Appropriation |
123,096 | 123,095 | 143,200 |
Significant Projects
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Business Transformation | 90,672 | 90,672 | 130,200 |
Total | 90,672 | 90,672 | 130,200 |
What is Intended to be Achieved with this Appropriation
This appropriation is intended to invest in the renewal, upgrade and redesign of assets that support the delivery of the department's services. This includes the capital investment required for the implementation of business transformation.
How Performance will be Assessed and End of Year Reporting Requirements
Expenditure supports the delivery of the department's performance measures in accordance with the department's capital asset management priorities for 2018/19 which are:
- implementation of business transformation (approximately 90%), and
- maintain and improve business infrastructure including technology replacements and accommodation fit-outs (approximately 10%).
Transformation spending will be assessed against the performance measures agreed for the Transformation appropriation.
End of Year Performance Reporting
Performance information for this appropriation will be reported by Inland Revenue in the department's Annual Report 2019.
Reasons for Change in Appropriation
Inland Revenue has updated the capital cost estimates for the remainder of the Transformation programme to 2021/22. The forecast shows that while Inland Revenue expects to remain well within the approved funding envelope, the timing of some of the costs and contingencies has changed due to the planned release approach and the timing of key support activities across the programme. Capital spending in 2018/19 and out years has been updated to better align with the updated work programme.
Capital Injections and Movements in Departmental Net Assets
Inland Revenue Department
Details of Net Asset Schedule | 2017/18 Estimated Actual $000 |
2018/19 Projected $000 |
Explanation of Projected Movements in 2018/19 |
---|---|---|---|
Opening Balance | 253,605 | 311,722 | |
Capital Injections | 58,600 | 98,200 | The cost estimates for the remainder of the Transformation programme have been updated. Capital injections have been adjusted to reflect the planned release approach and the timing of key support activities across the programme. |
Capital Withdrawals | (483) | - | Capital withdrawal of $483,000 for the business tax package initiative. |
Surplus to be Retained (Deficit Incurred) | - | - | |
Other Movements | - | - | |
Closing Balance |
311,722 | 409,922 |
Part 3 - Details of Non-Departmental Appropriations#
3.2 - Non-Departmental Benefits or Related Expenses#
Best Start Tax Credit PLA (M57)
Scope of Appropriation
Expenses
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | - | - | 80,000 |
What is Intended to be Achieved with this Appropriation
This permanent appropriation provides for payments to all families with a dependent child in the first year of the child's life to help with day-to-day living costs. Payments continue for low and middle income families until the dependent child turns three years old.
How Performance will be Assessed and End of Year Reporting Requirements
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for Best Start tax credit payments under the Income Tax Act 2007. Performance information relating to the administration of the payment is provided under the Services for Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Current and Past Policy Initiatives
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Current Government | ||||||
Families Package | 2018/19 | - | 80,000 | 231,000 | 373,000 | 451,000 |
Reasons for Change in Appropriation
This is a new non-departmental benefits or related expenses appropriation effective from 1 July 2018.
Conditions on Use of Appropriation
Reference | Conditions |
---|---|
Subpart MG of the Income Tax Act 2007 | Sets out the entitlement and calculation of the Best Start tax credit. |
Child Support Payments PLA (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 288,000 | 288,000 | 300,000 |
What is Intended to be Achieved with this Appropriation#
This permanent appropriation provides for the transfer of child support payments from non-custodial parents to custodial persons.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for child support payments to custodial persons under the Child Support Act 1991. Performance information is provided under the Services for Customers Multi-Category Appropriation relating to the administration of the payment is provided under the Services to Process Obligations and Entitlements category.
Current and Past Policy Initiatives#
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Previous Government | ||||||
Addressing child support legacy debt | 2015/16 | 1,100 | 1,100 | - | - | - |
Child support compliance | 2014/15 | 18,000 | 18,000 | - | - | - |
Reasons for Change in Appropriation#
The increase in 2018/19 is due to an increase in the number of child support cases as a result of general population growth, and forecast improvements to the labour market. The latter increases the amount collected from non-custodial parents and transferred to custodial persons, and it also decreases the likelihood that custodial persons are dependent on the state for financial support.
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Section 141 of the Child Support Act 1991 | On payment of money received by the Commissioner by way of child support to qualifying custodians, if the qualifying custodian of the child is not a recipient of a social security benefit. |
Child Tax Credit PLA (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 800 | 800 | 600 |
What is Intended to be Achieved with this Appropriation#
This permanent appropriation provides for payments to families with dependent children aged 18 or younger to help with day-to-day living costs.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for child tax credit payments under the Income Tax Act 2007. Performance information relating to the administration of the payment is provided under the Services for Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Reasons for Change in Appropriation#
The child tax credit was replaced by the in-work tax credit in April 2006. People ineligible for the in-work tax credit could continue to receive the child tax credit until no longer eligible. The appropriation will continue to decline as the remaining recipients gradually change to the in-work tax credit or are no longer eligible.
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Subpart MZ of the Income Tax 2007 | Sets out the entitlement for and calculation of the child tax credit |
Family Tax Credit PLA (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 1,696,000 | 1,696,000 | 2,628,000 |
What is Intended to be Achieved with this Appropriation#
This permanent appropriation provides for payments to low to middle income families with dependent children aged 18 or younger to help with day-to-day living costs.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for family tax credit payments under the Income Tax Act 2007. Performance information relating to the administration of the payment is provided under the Services for Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Current and Past Policy Initiatives#
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Current Government | ||||||
Families Package | 2018/19 | (97,000) | 540,000 | 530,000 | 520,000 | 510,000 |
Previous Government | ||||||
Budget 2017 Family Incomes Package | 2017/18 | 97,000 | 371,000 | 316,000 | 308,000 | 308,000 |
Package for children living in material hardship | 2015/16 | (30,520) | (28,550) | (28,550) | (28,550) | (28,550) |
Reasons for Change in Appropriation#
The family tax credit is payable to families with eligible children whose family income is below the relevant abatement cut-off point. The appropriation generally declines over time because income growth reduces entitlement for families with annual family incomes over the abatement threshold.
From 1 July 2018, family tax credit entitlements for children under 16 will increase to match the 16-18 year old entitlement rates. The family income abatement threshold will increase from $36,350 to $42,700 and consequentially fewer families will face abatement, although those which do will have their entitlements reduced at a faster rate of 25% (currently 22.5%). Overall, the combined changes will increase the family tax credit appropriation from 1 July 2018.
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Subpart MD 3 of the income Tax Act 2007 | Sets out entitlement for and calculation of the family tax credit. |
In-Work Tax Credit PLA (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 533,000 | 533,000 | 540,000 |
What is Intended to be Achieved with this Appropriation#
This permanent appropriation provides for payments to families who work the required hours each week and have dependent children aged 18 or younger to help with day-to-day living costs.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for in-work tax credit payments under the Income Tax Act 2007. Performance information relating to the administration of the payment is provided under the Services for Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Current and Past Policy Initiatives#
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Previous Government | ||||||
Budget 2017 Family Incomes Package | 2017/18 | - | 2,000 | 2,000 | 2,000 | 2,000 |
Package for children living in material hardship | 2015/16 | 100,000 | 95,000 | 95,000 | 95,000 | 95,000 |
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Sections MD 4-10 of the Income Tax Act 2007 | Sets out the entitlement for and calculation of the in-work tax credit |
KiwiSaver: Interest (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 10,000 | 8,000 | 10,000 |
What is Intended to be Achieved with this Appropriation#
This appropriation provides for interest payments to members on KiwiSaver contributions while they are held with Inland Revenue. Inland Revenue is required to hold members' contributions for three months from the date of the first contribution before transferring it to their KiwiSaver providers.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for KiwiSaver interest payments under the KiwiSaver Act 2006. Performance information relating to the administration of the payment is provided under the Services for Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Section 84-91 of the KiwiSaver Act 2006 | Interest payable by Inland Revenue on KiwiSaver member contributions while they are being held by Inland revenue prior to being forwarded to KiwiSaver scheme providers. |
KiwiSaver: Tax Credit (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 832,000 | 822,000 | 850,000 |
What is Intended to be Achieved with this Appropriation#
This appropriation encourages participation in the KiwiSaver scheme by providing for an annual payment to contributing members aged 18 or over who meet the eligibility criteria.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for KiwiSaver tax credit payments under the KiwiSaver Act 2006. Performance information relating to the administration of the payment is provided under the Services for Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Reasons for Change in Appropriation#
The increase in the tax credit in 2018/19 is due to an increase in the total number of contributing members as well as increases in their contributions due to forecast income growth.
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Part MK 1-8 of the Income Tax Act 2007 | Provides a tax credit for members up to a cap of $10 per week. |
Minimum Family Tax Credit PLA (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 12,000 | 12,000 | 14,000 |
What is Intended to be Achieved with this Appropriation#
This permanent appropriation provides for payments to families with dependent children aged 18 or younger to ensure that the annual income after tax of a family does not fall below $26,156 where at least one parent is working.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for minimum family tax credit payments under the Income Tax Act 2007. Performance information relating to the administration of the payment is provided under the Services to Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Current and Past Policy Initiatives#
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Current Government | ||||||
Families Package | 2018/19 | - | 1,300 | 1,300 | 1,300 | 1,300 |
Previous Government | ||||||
Package for children living in material hardship | 2015/16 | 1,800 | 1,800 | 1,800 | 1,800 | 1,800 |
Reasons for Change in Appropriation#
The increase in 2018/19 is due to the indexation-related increases to minimum family tax credit which are made each year. These maintain the level of the credit relative to welfare benefit rates. The Winter Energy Payment is included in future calculations of the minimum family tax credit entitlement from 1 July 2018 bringing the guaranteed minimum amount to $26,156 for the 2018/19 fiscal year.
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Subpart ME of the Income Tax Act 2007 | Sets out the entitlement for and calculation of the minimum family tax credit. |
Paid Parental Leave Payments (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 297,000 | 287,000 | 360,000 |
What is Intended to be Achieved with this Appropriation#
This appropriation provides for payments to eligible parents and adoptive parents when they take parental leave from their employment to care for their new-born or adopted child (under the age of six). These payments provide employment protected leave and compensate for the loss of income.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for paid parental leave payments under the Income Tax Act 2007. Performance information relating to the administration of the payment is provided under the Services for Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Current and Past Policy Initiatives#
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Current Government | ||||||
Extending paid parental leave to 26 weeks | 2018/19 | - | 66,000 | 68,700 | 142,700 | 148,400 |
Previous Government | ||||||
Extending the duration of parental leave payments of preterm babies | 2015/16 | 3,400 | 3,400 | 3,400 | 3,400 | 3,400 |
Paid parental leave payments | 2014/15 | 63,900 | 65,200 | 65,200 | 65,200 | 65,200 |
Reasons for Change in Appropriation#
The increase in 2018/19 reflects the extension of paid parental leave payments from 18 to 22 weeks from 1 July 2018.
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Part 7A of the Parental Leave and Employment Protection Act 1987 | Establishes the calculation for the payment of paid parental leave payments. |
Parental Tax Credit PLA (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 29,000 | 29,000 | 5,000 |
What is Intended to be Achieved with this Appropriation#
This permanent appropriation provides for payments to families with a new-born baby for the first 10 weeks after the birth to help with day-to-day living costs.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for parental tax credit payments under the Income Tax Act 2007. Performance information relating to the administration of the payment is provided under the Services for Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Current and Past Policy Initiatives#
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Current Government | ||||||
Families Package | 2018/19 | - | (28,000) | (27,000) | (26,000) | (25,000) |
Previous Government | ||||||
Package for children living in material hardship | 2015/16 | (480) | (450) | (450) | (450) | (450) |
Parental tax credit | 2014/15 | 13,000 | 13,000 | 13,000 | 13,000 | 13,000 |
Reasons for Change in Appropriation#
The decrease in 2018/19 is due to the replacement of the parental tax credit. From 1 July 2018, the parental tax credit, is replaced by Best Start payments and will only apply to children born before 1 July 2018. The residual appropriation in 2018/19 is intended to cover these claims to the extent that their entitlement period crosses into the 2018/19 fiscal year, and/or the claims are made at year end on 2018/19 tax returns.
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Sections MD 11-12 of the Income Tax Act 2007 | Sets out the entitlement for (MD 11) and calculation of (MD 12) the parental tax credit. |
Payroll Subsidy PLA (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 7,600 | 7,600 | 6,500 |
What is Intended to be Achieved with this Appropriation#
This permanent appropriation provides for payments to payroll agents who undertake payroll services on behalf of small businesses so they can focus their efforts on growing their businesses.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for the payment of a payroll subsidy under the Income Tax Act 2007. Performance information relating to the administration of the payment is provided under the Services for Customers Multi-Category Appropriation under the Services to Process Obligations and Entitlements category.
Current and Past Policy Initiatives#
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Current Government | ||||||
Changes made during passage of the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill | 2017/18 | 1,700 | 6,500 | 3,900 | - | - |
Previous Government | ||||||
Making Tax Simpler: Better Administration of PAYE and GST | 2017/18 | (1,700) | (7,300) | (8,100) | (8,900) | (8,900) |
Reasons for Change in Appropriation#
The decrease in 2018/19 is due to the payroll subsidy being phased out. From 1 April 2019, the eligibility threshold will be lowered to include only employers whose payrolls are below $50,000 of PAYE and employer superannuation contribution tax (ESCT) per annum (currently $500,000). The subsidy will cease altogether from 1 April 2020.
Conditions on Use of Appropriation#
Reference | Conditions |
---|---|
Section RP 4 of the Income Tax Act 2007 | Establishes the payment of a subsidy by the Commissioner to a listed PAYE intermediary for a payroll service that they provide to an employer (RP 4(1)). The calculation of the subsidy is specified in the Income Tax Act (Payroll Subsidy) regulations. |
3.3 - Non-Departmental Borrowing Expenses#
Adverse Event Interest PLA (M57)#
Scope of Appropriation
Expenses
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 10 | 10 | 10 |
What is Intended to be Achieved with this Appropriation
This appropriation provides for interest payments on deposits held in an adverse event income equalisation scheme. This scheme allows farmers who experience adverse events to carry income from forced livestock sales over to the next income year.
Environmental Restoration Account Interest PLA (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 2,000 | 2,000 | 2,000 |
What is Intended to be Achieved with this Appropriation#
This appropriation provides interest payments on deposits held in an environmental restoration account. The environmental restoration account allows businesses to set aside money to cover restoration costs for monitoring, avoiding, remedying or mitigating the detrimental environmental effects which may occur in later years.
Income Equalisation Interest PLA (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 7,000 | 7,000 | 10,000 |
What is Intended to be Achieved with this Appropriation#
This appropriation provides interest payments on deposits held in the income equalisation scheme. This scheme allows taxpayers in the farming, fishing, and forestry industries to make payments during the year to equalise income between different income years.
Reasons for Change in Appropriation#
The increase in 2018/19 allows for potential volatility in the use of the income equalisation scheme.
3.4 - Non-Departmental Other Expenses#
Impairment of Debt and Debt Write-Offs (M57)#
Scope of Appropriation
Expenses
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 800,000 | 640,000 | 680,000 |
What is Intended to be Achieved with this Appropriation
This appropriation provides for the write-off of the Crown debt and for recognising an impairment to reflect the recoverable value of the Crown debt as at the end of a financial year, relating to general tax, KiwiSaver and Working for Families Tax Credits.
How Performance will be Assessed and End of Year Reporting Requirements
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for the impairment of debt and debt write-offs. Performance information relating to this expenditure is provided under the Services for Customers Multi-Category Appropriation under the Management of Debt and Outstanding Returns category.
Current and Past Policy Initiatives
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Current Government | ||||||
Tax compliance activity - additional revenue | 2018/19 | 10,700 | 15,000 | 15,000 | 15,000 | |
Previous Government | ||||||
Revenue investment continuation | 2017/18 | (6,525) | (6,525) | (6,525) | - | - |
Small business tax package | 2016/17 | (27,000) | (53,000) | (78,000) | (100,280) | (119,590) |
Revenue investment | 2015/16 | 11,601 | 11,601 | 11,601 | - | - |
Unfiled returns | 2014/15 | 19,698 | 15,758 | - | - | - |
Reasons for Change in Appropriation
The decrease in 2018/19 reflects forecast changes in the level of overdue debt, impairment and write-offs. Currently forecasts show a small increase in the overall level of debt in 2017/18 and for debt to remain at a similar level through 2018/19.
Initial Fair Value Write-Down Relating to Student Loans (M57)#
Scope of Appropriation#
Expenses#
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation | 638,000 | 615,000 | 610,000 |
What is Intended to be Achieved with this Appropriation#
This appropriation provides for incurring the expense relating to reductions in the nominal value of new student loan lending to reflect the present value of that lending.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative because this appropriation is solely for the initial fair value write-down of student loans. Performance information relating to this expenditure is available to the House of Representatives in the Student Loan Scheme Annual Report 2018.
Current and Past Policy Initiatives#
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Current Government | ||||||
First year fees-free in 2018 | 2017/18 | (52,627) | (70,465) | (71,951) | (68,526) | (72,383) |
Increase student allowance and living costs loans by $50 | 2017/18 | 24,813 | 56,005 | 59,106 | 61,271 | 63,302 |
Tertiary Education Annual Maximum Fee Movement | 2017/18 | - | 1,272 | 2,107 | 2,270 | 2,329 |
Previous Government | ||||||
Annual maximum fee movement for 2017 and 2018 | 2016/17 | 2,971 | 3,262 | 3,380 | 3,380 | 3,380 |
Response to the Syrian refugee crisis: implementation | 2016/17 | 49 | 25 | 12 | - | - |
Delivering support to graduate-entry students affected by the 7 EFTS limit to complete long undergraduate programmes | 2015/16 | 797 | 969 | 627 | - | - |
Investing to increase the number of engineering graduates | 2015/16 | 108 | 477 | 371 | 990 | 1,224 |
Maintain the student allowance parental income threshold | 2015/16 | 1,623 | 2,520 | 2,520 | 2,520 | 2,520 |
Set the annual maximum fee movement to 3% for 2016 | 2015/16 | (5,173) | (5,363) | (5,363) | (5,363) | (5,363) |
Supporting better pubic services and business growth within Vote Tertiary Education | 2015/16 | 1,965 | 2,013 | 2,013 | 2,013 | 2,013 |
Additional medical places | 2014/15 | 1,242 | 1,552 | 1,644 | 1,644 | 1,644 |
Suspending the student loan repayment threshold until 1 April 2017 | 2014/15 | (11,260) | (11,260) | (11,260) | (11,260) | (11,260) |
Reasons for Change in Appropriation#
The decrease in 2018/19 is mainly due to macroeconomic changes impacting on the initial fair value ratio used to calculate the write-down.
Part 4 - Details of Multi-Category Expenses and Capital Expenditure#
Multi-Category Expenses and Capital Expenditure#
Services for Customers (M57)
Overarching Purpose Statement
Scope of Appropriation
Departmental Output Expenses
InvestigationsThis category is limited to undertaking investigation, audit and litigation activities administered by Inland Revenue.
Management of Debt and Outstanding Returns
This category is limited to activities to prevent returns becoming outstanding and debt becoming overdue, and to collect outstanding returns and overdue payments, whether for the Crown, other agencies or external parties.
Services to Inform the Public About Entitlements and Meeting Obligations
This category is limited to providing information and assistance to the public to make them aware of their obligations and entitlements. This also includes the provision of services to help Ministers fulfil their responsibilities to Parliament and the New Zealand public, other than policy decision-making responsibilities.
Services to Process Obligations and Entitlements
This category is limited to both the registration, assessment and processing of tax obligations and other entitlements, including associated review and Crown accounting activities, and the collection and sharing of related information with other agencies.
Expenses, Revenue and Capital Expenditure
2017/18 | 2018/19 | ||
---|---|---|---|
Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
|
Total Appropriation |
- | - | 647,659 |
Departmental Output Expenses |
|||
Investigations | - | - | 171,983 |
Management of Debt and Outstanding Returns | - | - | 152,255 |
Services to Inform the Public About Entitlements and Meeting Obligations | - | - | 207,949 |
Services to Process Obligations and Entitlements | - | - | 115,472 |
Funding for Departmental Output Expenses |
|||
Revenue from the Crown |
- | - | 623,240 |
Investigations | - | - | 171,679 |
Management of Debt and Outstanding Returns | - | - | 150,233 |
Services to Inform the Public About Entitlements and Meeting Obligations | - | - | 206,671 |
Services to Process Obligations and Entitlements | - | - | 94,657 |
Revenue from Others |
- | - | 24,419 |
Investigations | - | - | 304 |
Management of Debt and Outstanding Returns | - | - | 2,022 |
Services to Inform the Public About Entitlements and Meeting Obligations | - | - | 1,278 |
Services to Process Obligations and Entitlements | - | - | 20,815 |
Comparators for Restructured Appropriation
2017/18 | 2018/19 | ||
---|---|---|---|
Vote, Type and Title of Appropriation | Final Budgeted $000 |
Estimated Actual $000 |
Budget $000 |
Vote Revenue: Departmental Output Expense: Services for Customers |
|||
Investigations | 152,717 | 148,613 | - |
Management of Debt and Outstanding Returns | 139,944 | 135,679 | - |
Services to Inform the Public About Entitlements and Meeting Obligations | 232,249 | 225,419 | - |
Services to Process Obligations and Entitlements | 105,056 | 102,755 | - |
Total |
629,966 |
612,466 |
- |
What is Intended to be Achieved with this Appropriation
This appropriation is intended to ensure customers find it easy to meet their tax and social policy obligations and receive the payments they are entitled to.
How Performance will be Assessed for this Appropriation
2017/18 | 2018/19 | ||
---|---|---|---|
Assessment of Performance | Final Budgeted Standard |
Estimated Actual |
Budget Standard |
Percentage of customers satisfied with the overall quality of service delivery from Inland Revenue (see Note 1). |
90% | 87.2% | 90% |
Percentage of customers who feel Inland Revenue makes it easy for people to get it right (see Note 1). |
75% | 78.5% | 80% |
What is Intended to be Achieved with each Category and How Performance will be Assessed
2017/18 | 2018/19 | ||
---|---|---|---|
Assessment of Performance | Final Budgeted Standard |
Estimated Actual |
Budget Standard |
Departmental Output Expenses |
|||
Investigations |
|||
Primary measures |
|||
Percentage of customers whose compliance behaviour improves after receiving an audit intervention (see Note 2). |
80% | 85% - 88% | 85% |
Discrepancy identified for every output dollar spent. |
$7.00 | $6.50 - $7.00 | $7.00 |
Percentage of litigation judgments found in favour of the Commissioner. |
66% | 90% | 75% |
Supporting measures |
|||
Percentage of audited customers who are satisfied with their experience (see Note 2). |
70% | 77% | 75% |
Management of Debt and Outstanding Returns |
|||
Primary measures |
|||
Percentage of returns filed by customers on time. |
80% | 84.9% | 85% |
Value of assessed revenue for every outstanding return dollar spent. |
$45.00 | $68.00 | $45.00 |
Percentage of tax payments made by customers on time. |
85% | 87.9% | 85% |
Cash collected for every debt dollar spent. |
$40.00 | $60.00 | $30.00 |
Percentage of child support assessments paid on time. |
65% | 69% | 70% |
Supporting measures |
|||
Average cost of finalising an outstanding return. |
$16.00-$18.00 | $16.00-$18.00 | $18.00-$20.00 |
Percentage growth in outstanding returns. |
0% or less | 5.8% | 0% or less |
Percentage of collectable debt value over two years old. |
60% or less | 50% | 55% or less |
Percentage of new customer debt resolved within six months. |
80% | 80% | 80% |
Percentage of New Zealand liable parent child support debt cases resolved within 12 months. |
75% | 76.5% | 75% |
Services to Inform the Public About Entitlements and Meeting Obligations |
|||
Primary measures |
|||
Percentage of customers who perceive that Inland Revenue does enough to inform them of their rights and obligations (see Note 1). |
80% | 82.2% | 85% |
Percentage of customers who perceive that resolving issues with Inland Revenue requires low effort (see Note 1). |
80% | 75.8% | 80% |
Supporting measures |
|||
Average cost of a customer-initiated contact. |
$35.00 or less | $40.00 | $35.00 or less |
Percentage of telephone calls answered within two minutes. |
75% | 65% | 75% |
Percentage of all rulings reports, adjudication reports and public items that meet the applicable purpose, logic, alternatives, consultation, and practicality standards. |
100% | 100% | 100% |
Number of published or finalised public items that give the Commissioner's interpretation of the law. |
25 | 25 | 25 |
Percentage of public items (including relevant public consultation), completed within 18 months of allocation. |
85% | 82.4% | 85% |
Percentage of adjudication cases completed within three months of receipt. |
90% | 88.9% | 90% |
Percentage of taxpayer ruling applications that have a draft ruling completed within three months of receipt. |
90% | 88.9% | 90% |
Percentage of non-qualifying ruling applications that have a draft ruling completed within six months of receipt. |
90% | 88.9% | 90% |
Percentage of submissions by the applicant on any draft ruling responded to within one month of receipt. |
90% | 88.9% | 90% |
Services to Process Obligations and Entitlements |
|||
Primary measures |
|||
Percentage of social policy and tax registrations processed within five working days. |
85% | 91.3% | 85% |
Percentage of income tax disbursements issued within six weeks. |
85% | 90.3% | 85% |
Percentage of GST disbursements issued within four weeks (see Note 3). |
95% | 95.3% | 95% |
Supporting measures |
|||
Percentage of income tax returns finalised within four weeks. |
90% | 92.1% | 90% |
Percentage of GST returns finalised within three weeks. |
95% | 97.8% | 95% |
Percentage of employer monthly schedule employee deductions finalised within four weeks. |
95% | 99.8% | 95% |
Average cost of processing income tax returns, GST returns and employer monthly schedules. |
$4.00 or less | $2.50 | $4.00 or less |
Percentage of notices and statements produced without error. |
98.5% | 99.8% | 99.8% |
Percentage of tax credit claim payments made within three weeks. |
90% | 91.3% | 90% |
Percentage of Working for Families Tax Credit (WfFTC) payments made on the first regular payment date following an application. |
95% | 99.1% | 95% |
Percentage of paid parental leave payments issued to customers on the first pay day following the agreed date of entitlement. |
97% | 97% | 97% |
Percentage of child support administrative review decisions issued within seven weeks. |
85% | 89.7% | 90% |
Percentage of child support assessments issued within two weeks. |
80% | 81.4% | 80% |
Note 1 - Actual performance measured using a sample of the customer population.
Note 2 - Actual performance measured using a sample of audit cases.
Note 3 - Section 46 of the Goods and Services Tax Act 1985 stipulates refunds are to be issued within 15 working days unless selected for a screening or investigation. The four week's measure includes additional time for screening or investigation.
All performance measures cover the breadth of Inland Revenue's business (tax, social policy and KiwiSaver).
End of Year Performance Reporting
Performance information for this appropriation will be reported by Inland Revenue in the department's Annual Report 2019.
Current and Past Policy Initiatives
Policy Initiative | Year of First Impact |
2017/18 Final Budgeted $000 |
2018/19 Budget $000 |
2019/20 Estimated $000 |
2020/21 Estimated $000 |
2021/22 Estimated $000 |
---|---|---|---|---|---|---|
Investigations |
||||||
Current Government |
||||||
Budget 2018 Research and Development Tax Credit Implementation | 2018/19 | - | 120 | 150 | 80 | 80 |
Previous Government |
||||||
Revenue investment continuation | 2017/18 | 9,584 | 9,584 | 9,584 | - | - |
Business tax package | 2016/17 | 150 | 100 | - | - | - |
Revenue investment | 2015/16 | 16,602 | 16,602 | 16,602 | - | - |
Share of costs for Budget 2015 whole-of-government initiatives | 2015/16 | (240) | (180) | (180) | (180) | (180) |
Cashing out research and development tax losses | 2014/15 | 119 | 119 | 119 | 119 | 119 |
Property compliance initiative continuation | 2014/15 | 5,000 | 5,000 | 5,000 | 5,000 | 5,000 |
Management of Debt and Outstanding Returns |
||||||
Current Government |
||||||
Budget 2018 Tax Compliance Activity - Funding to Collect Additional Revenue | 2018/19 | - | 5,850 | 5,850 | 5,900 | 5,900 |
Previous Government |
||||||
Revenue investment continuation | 2017/18 | 10,400 | 10,400 | 10,400 | - | - |
Business tax package | 2016/17 | 890 | 630 | - | - | - |
Share of costs for Budget 2015 whole-of-government initiatives | 2015/16 | (260) | (190) | (190) | (190) | (190) |
Child support compliance | 2014/15 | 6,734 | 6,757 | - | - | - |
Unfiled returns | 2014/15 | 6,675 | 6,675 | - | - | - |
Property compliance initiative continuation | 2014/15 | 1,650 | 1,650 | 1,650 | 1,650 | 1,650 |
Student loans overseas-based borrowers compliance initiative continuation | 2014/15 | 4,850 | 4,850 | 4,850 | 4,850 | 4,850 |
Services to Inform the Public About Entitlements and Meeting Obligations |
||||||
Current Government |
||||||
Budget 2018 Research and Development Tax Credit Implementation | 2018/19 | - | 480 | 600 | 320 | 320 |
Families Package Implementation | 2018/19 | - | 1,010 | 410 | 350 | 350 |
Previous Government |
||||||
Budget 2017 family incomes package implementation | 2017/18 | 800 | - | - | - | - |
Business tax package | 2016/17 | 420 | 310 | - | - | - |
Share of costs for Budget 2015 whole-of-government initiatives | 2015/16 | (400) | (300) | (300) | (300) | (300) |
Cashing out research and development tax losses | 2014/15 | 475 | 475 | 475 | 475 | 475 |
Child support compliance | 2014/15 | 2,245 | 2,253 | - | - | - |
Unfiled returns | 2014/15 | 2,861 | 2,861 | - | - | - |
Services to Process Obligations and Entitlements |
||||||
Current Government |
||||||
Budget 2018 Research and Development Tax Credit Implementation | 2018/19 | - | 600 | 750 | 400 | 400 |
Families Package Implementation | 2018/19 | - | 2,050 | 840 | 710 | 710 |
Previous Government |
||||||
Budget 2017 family incomes package implementation | 2017/18 | 1,600 | - | - | - | - |
Automatic Exchange of Information | 2016/17 | 2,620 | 3,300 | 2,700 | 2,400 | 2,400 |
Share of costs for Budget 2015 whole-of-government initiatives | 2015/16 | (127) | (103) | (103) | (103) | (103) |
Cashing out research and development tax losses | 2014/15 | 594 | 594 | 594 | 594 | 594 |
Reasons for Change in Appropriation
Inland Revenue has simplified its appropriation structure and moved to a multi-category appropriation (MCA). The previous four separate appropriations are now grouped into a single overarching appropriation to deliver a customer-centric, integrated tax and entitlement service experience for New Zealanders that is agile and intelligence-led.
The MCA for 2018/19 has increased because Inland Revenue has transferred savings made in 2017/18 into the following year. These efficiencies and other savings were generated through the application of transformation related workforce management principles, early transformation benefits associated with moving customers to online channels, and the renegotiation of vendor contracts in 2017/18. These efficiencies and other savings have been transferred to 2018/19 and out years to ensure that Inland Revenue is well placed to deliver administrative savings and meet the required level of contribution to the Transformation programme.
The increase is also due to additional funding received from the Families Package Implementation, Budget 2018 Research and Development Tax Credit Implementation, and Budget 2018 Tax Compliance Activity - Funding to Collect Additional Revenue.