Revenue
|
Year ended 30 June |
Actual 2004 |
Actual 2005 |
Actual 2006 |
Actual 2007 |
Actual 2008 |
Forecast Original Budget |
Forecast Est Actuals |
Actual 2009 |
|---|---|---|---|---|---|---|---|---|
$ million |
||||||||
| Core Crown tax revenue | 43,358 | 47,468 | 50,973 | 53,477 | 56,747 | 56,523 | 54,053 | 54,681 |
| Core Crown other revenue | 2,861 | 3,577 | 4,762 | 4,734 | 5,072 | 5,368 | 4,821 | 4,801 |
| Core Crown revenue | 46,219 | 51,045 | 55,735 | 58,211 | 61,819 | 61,891 | 58,874 | 59,482 |
| Crown entities, SOE and eliminations | 13,051 | 14,322 | 15,690 | 16,378 | 19,660 | 18,228 | 20,085 | 20,446 |
| Total Crown revenue | 59,271 | 65,367 | 71,425 | 74,589 | 81,479 | 80,119 | 78,959 | 79,928 |
% of GDP |
||||||||
| Core Crown tax revenue | 30.3% | 31.2% | 32.1% | 31.6% | 31.7% | 30.5% | 30.3% | 30.3% |
| Core Crown other revenue | 2.0% | 2.4% | 3.0% | 2.8% | 2.8% | 2.9% | 2.7% | 2.7% |
| Core Crown revenue | 32.3% | 33.6% | 35.1% | 34.4% | 34.5% | 33.4% | 33.0% | 33.0% |
| Crown entities, SOE and eliminations | 9.1% | 9.4% | 9.9% | 9.7% | 11.0% | 9.8% | 11.3% | 11.3% |
| Total Crown revenue | 41.4% | 43.0% | 45.0% | 44.1% | 45.5% | 43.2% | 44.2% | 44.4% |
Core Crown tax revenue has declined over the year, falling by $2.1 billion to $54.7 billion. The 2009 revenue includes $1.4 billion in relation to certain structured finance transactions (refer below). Excluding these transactions the decline in underlying tax revenue was $3.5 billion.
- Figure 2 - Core Crown tax revenue
- Source: The Treasury
Underlying Tax Revenue
The reduction in tax revenue compared to 2008 was mostly due to:
- personal and corporate tax cuts, along with measures to help small and medium-sized enterprises, have reduced tax revenue by approximately $3 billion
- declining profits (both corporate and individual) as a result of the worsening economic climate, and
- declining interest rates (reducing the withholding tax revenue).
- Figure 3 - 2009 core Crown tax revenue by type
- Source: The Treasury
These declines were partially offset by the impact of wage growth on source deduction taxes such as PAYE.
Compared to the 2009 Budget this outcome was $0.6 billion lower than forecast with personal taxes (PAYE, other persons tax and interest withholding tax) coming in lower than expected.
Revenue from Structured Finance Transactions
The Crown is currently in dispute with a number of financial institutions regarding the tax treatment of certain structured finance transactions.
In July this year the High Court found in favour of the Commissioner of Inland Revenue in a case against the Bank of New Zealand. This decision was reviewed and the judgement measured against the other outstanding transactions. As a result all structured finance assessments have been recognised as revenue in the 2009 financial year (a total of $1.4 billion). However, as legal proceedings are ongoing, a contingent liability has also been disclosed for this amount.
In addition, a contingent asset of $1.2 billion has been disclosed in relation to these transactions. This contingent asset relates to use of money interest due on all structured finance transactions recognised in the current year. The interest has been calculated based on the maximum amount of tax that the taxpayers are due to pay to the Inland Revenue at 30 June 2009. However some of these taxpayers may have unallocated funds in tax pooling facilities which they could transfer to an earlier effective date. As this is at the taxpayers' discretion, the exact amount of use of money interest is not quantifiable until all cases are resolved and taxpayers have made final payments to the Inland Revenue.
Contingent liabilities and contingent assets are excluded from the statement of financial position.
The inclusion of this revenue was not forecast in the 2009 Budget.
