Revenue
Ensure sufficient revenue to meet the operating balance objective (Fiscal Strategy)
|
Year ended 30 June $ million |
Actual 2005 |
Actual 2006 |
Actual 2007 |
Actual 2008 |
Actual 2009 |
Actual 2010 |
Forecast Original Budget |
Forecast Estimated Actuals |
|---|---|---|---|---|---|---|---|---|
| Core Crown tax revenue | 47,468 | 50,973 | 53,477 | 56,747 | 54,681 | 50,744 | 51,580 | 50,652 |
| Core Crown other revenue | 3,577 | 4,762 | 4,734 | 5,072 | 4,801 | 5,472 | 5,191 | 5,754 |
| Core Crown revenue | 51,045 | 55,735 | 58,211 | 61,819 | 59,482 | 56,216 | 56,771 | 56,406 |
| Crown entities, SOEs and eliminations | 14,322 | 15,690 | 16,378 | 19,660 | 20,024 | 18,509 | 21,163 | 19,274 |
| Total Crown revenue | 65,367 | 71,425 | 74,589 | 81,479 | 79,506 | 74,725 | 77,934 | 75,680 |
| % of GDP | ||||||||
| Core Crown tax revenue | 30.8% | 31.5% | 31.2% | 31.1% | 29.6% | 26.8% | 29.5% | 26.7% |
| Core Crown other revenue | 2.3% | 2.9% | 2.8% | 2.8% | 2.6% | 2.9% | 3.0% | 3.0% |
| Core Crown revenue | 33.1% | 34.5% | 33.9% | 33.9% | 32.2% | 29.7% | 32.4% | 29.8% |
| Crown entities, SOEs and eliminations | 9.3% | 9.7% | 9.5% | 10.8% | 10.9% | 9.8% | 12.1% | 10.2% |
| Total Crown revenue | 42.4% | 44.2% | 43.5% | 44.7% | 43.1% | 39.5% | 44.5% | 39.9% |
Total revenue has declined over the year, falling by $4.8 billion to $74.7 billion. A reduction in core Crown tax revenue is the main reason for the decrease (figure 6).
- Figure 6 - Core Crown tax revenue
- Source: The Treasury
Core Crown Tax Revenue
Although core Crown tax revenue was close to forecast at $50.7 billion, it has decreased by $3.9 billion (7.2%) on the previous year and $6.0 billion since 2008. Figure 7 summarises the movements from last year. Specifically:
- Declining profits (both corporate and individual) and declining interest rates (reducing the withholding tax revenue) continued into the 2010 financial year reflecting the lagged effect of the recession.
- While October 2008 and April 2009 personal income tax cuts occurred in the previous financial year, 2010 was the first full year at the lower tax rates.
- Tax revenue in 2009 included $1.4 billion in relation to structured finance transactions which was “one-off” type revenue.
- Despite rising unemployment, growth in aggregate salaries and wages added to source deduction tax income, while growth in domestic consumption was reflected in an increase in GST revenue.
- Figure 7 - Movement in core Crown tax revenue ($ billion)
- Source: The Treasury
Compared to forecast, core Crown tax revenue was $92 million (0.2%) more than expected. Included in this result were the following significant items (figure 8):
- Both corporate tax and GST revenue were higher than expected (by $225 million and $210 million respectively) as both business profits and domestic consumption began to show signs of recovery.
- In contrast, individuals tax revenue (including source deductions) and other tax revenue were lower than forecast (by $230 million and $113 million respectively) reflecting weaker than expected final 2009 income tax assessments and wage growth, and lower than expected customs and excise duties.
- Figure 8 - Core Crown tax revenue against forecast
- Source: The Treasury
Other Revenue
Other revenue includes other sovereign revenue (eg, ACC levies), sales of goods and services (eg, postal services), interest income and dividend income.
Other revenue has reduced by $0.9 billion over the year to $24.0 billion (figure 9). This reduction in revenue is largely associated with the SOE sector. However, reductions in SOE revenue were largely offset by reductions in SOE operating expenses.
- Figure 9 - Other revenue
- Source: The Treasury
