The Treasury

Global Navigation

Personal tools

Notes to the Financial Statements (continued)

Note 14:  Receivables
Forecast Actual
Original
Budget
$m 		Estimated
Actuals
$m 		30 June 2008
$m 		30 June 2007
$m
By type  
7,078 6,005 Tax receivables 7,398 6,369
2,843 3,171 Levies, fines and penalty receivables 3,106 2,589
217 344 Social benefit receivables 440 394
2,409 2,806 Trade and other receivables 3,214 2,705
12,547 12,326 Total receivables 14,158 12,057
By maturity  
12,121 11,758 Expected to be realised within one year 13,564 11,431
426 568 Expected to be held for more than one year 594 626
12,547 12,326 Total receivables 14,158 12,057
By source  
8,285 7,108 Core Crown 9,031 7,590
3,507 4,260 Crown entities 4,444 3,687
1,647 1,744 State-owned Enterprises 2,247 1,729
(892) (786) Inter-segment eliminations (1,564) (949)
12,547 12,326 Total receivables 14,158 12,057

In determining the recoverability of a tax or other sovereign receivables, the Government uses information about the extent to which the tax or levy payer is contesting the assessment and experience of the outcomes of such disputes, from lateness of payment, and other information obtained from credit collection actions taken. Due to the size of the tax base, the concentration of credit risk is limited and this is not a risk that is managed.

The Government does not hold any collateral or any other credit enhancements over receivables which are past due.

Actual
30 June 2008
$m 		30 June 2007
$m
Tax Receivables  
Gross tax receivable 10,423 9,151
Impairment of tax receivables (3,025) (2,782)
Total tax receivables 7,398 6,369
Gross Tax Receivable  
Current 6,218 5,646
Past due 4,205 3,505
Total gross tax receivable 10,423 9,151
% past due 40% 38%
Impairment of tax receivables  
Balance at beginning of the year 2,782 984
Impairment losses recognised on receivables 944 2,581
Amounts written off as uncollectible (701) (783)
Balance at end of the year 3,025 2,782
Note 14:  Receivables (continued)
Actual
30 June 2008
$m 		30 June 2007
$m
Ageing of tax receivables past due  
Less than six months 1,458 960
Between six months and one year 458 365
Between one year and two years 701 755
Greater than two years 1,588 1,425
Tax receivables past due 4,205 3,505

The Inland Revenue Department (IRD) administers the majority of the tax receivable portfolio. The recoverable amount of the portfolio administered by IRD is calculated by forecasting the expected repayments based on analysis of historical debt data, deducting an estimate of service costs and then discounting at the current use of money interest (UOMI) rate. If the recoverable amount of the IRD portfolio is less than the carrying amount, the carrying amount is reduced to the recoverable amount.

Actual
30 June 2008
$m 		30 June 2007
$m
The estimated recoverable amount of this portfolio and key
assumptions underpinning the valuation are:		  
Recoverable amount of tax receivables current 6,218 5,646
Recoverable amount of tax receivables past due 1,180 723
Discount rate (UOMI) 14.24% 14.24%
Impact on recoverable amount of a 2% increase in discount rate (18) (19)
Impact on recoverable amount of a 2% decrease in discount rate 19 21

Tax receivables are classified as past due when any outstanding tax is not paid by the taxpayer's due date. Due dates will vary depending on the type of tax outstanding (e.g. GST, income tax, PAYE) and the taxpayer's balance date. Past due debt includes debt collected under instalment, debt under dispute, default assessments and debts of taxpayers who are bankrupt, in receivership or in liquidation. IRD has debt management policies and procedures to actively manage the collection of past due debt.

The fair value of tax receivables is not materially different from the carrying value.

Page top