Potential Policy Decisions Affecting Revenue
ACC - Levies (Changed, Unquantified)
Levy rates for the Work, Earners' and Motor Vehicle accounts are set by Cabinet following a public consultation process. Claims experience, ACC performance and economic assumptions (particularly discount rates) can impact insurance expenditure, both in the current year and the estimated future liability. If any of these factors differ from what is forecast the revenue collected may be more or less than required to cover the costs of claims, resulting in unplanned savings or costs to the Crown.
Revenue - Income-Sharing Tax Credits (Unchanged, Quantified)
The Government has introduced legislation to establish an income-sharing tax credit. If passed as introduced, the legislation will allow couples with children under the age of 18 to pool their earnings for income tax purposes if they meet certain criteria. If implemented, the changes will reduce tax revenues by $500 million per annum once the scheme is fully operational. The Finance and Expenditure Committee has reported the Bill back recommending that the significant fiscal cost of the package be addressed before the Bill proceeds further.
Revenue - Salary Trade-Offs (Unchanged, Unquantified)
The Government is reviewing the tax treatment of employee benefits traded off for salary, including the treatment of car parks. Any changes are expected to result in an increase in tax revenues.
Services funded by Third Party Revenue (Changed, Unquantified)
A wide range of government services are funded through third party fees and charges. Demand for these services can vary which has a direct effect on revenue received. There is a risk the Government may need to provide additional funding if revenue collected is lower than the total cost of providing the service. There is also a risk that changes will be required to the way government services are delivered, which could result in costs to the Crown.
