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Note 14: Receivables

Note 14: Receivables
Forecast
30 June 2012 		Actual
Budget 11
$m 		Budget 12
$m 		30 June
2012
$m 		30 June
2011
$m

By type

 
6,788 7,196 Tax receivables 7,257 7,104
3,947 3,255 Levies, fines and penalty receivables 3,267 3,440
490 481 Social benefit receivables 502 480
11,225 10,932 Sovereign receivables 11,026 11,024
320 723 Recoveries from Deposit Guarantee Scheme receiverships 270 739
5,164 8,911 Trade and other receivables 9,660 9,927
16,709 20,566 Total receivables 20,956 21,690

By maturity

 
13,504 14,600 Expected to be realised within one year 15,173 14,916
3,205 5,966 Expected to be outstanding for more than one year 5,783 6,774
16,709 20,566 Total receivables 20,956 21,690

By source

 
8,785 10,014 Core Crown 10,974 11,376
7,254 8,568 Crown entities 10,011 8,999
2,358 3,447 State-owned enterprises 2,154 3,576
(1,688) (1,463) Inter-segment eliminations (2,183) (2,261)
16,709 20,566 Total receivables 20,956 21,690

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.

All sovereign receivables are denominated in New Zealand dollars.

Note 14: Receivables (continued)
Actual
30 June
2012
$m 		30 June
2011
$m

Tax Receivables

 
Gross tax receivable 11,666 11,248
Impairment of tax receivables (4,409) (4,144)
Total tax receivables 7,257 7,104

Gross Tax Receivable

 
Current 6,262 6,138
Past due 5,404 5,110
Total gross tax receivable 11,666 11,248
% past due 46% 45%

Impairment of Tax Receivables

 
Opening balance 4,144 3,920
Impairment losses recognised during the year 1,114 1,009
Amounts written off as uncollectible (849) (785)
Closing balance 4,409 4,144

The Inland Revenue Department (IRD) administers the majority of the tax receivable portfolio. The recoverable amount of the portfolio 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 market rate. If the recoverable amount of the portfolio is less than the carrying amount, the carrying amount is reduced to the recoverable amount. Alternatively, if the recoverable amount is more, the carrying amount is increased.

Note 14: Receivables (continued)
Actual
30 June
2012
$m 		30 June
2011
$m
The estimated recoverable amount of this portfolio and key assumptions underpinning the valuation are:  
Recoverable amount of tax receivables (current) 6,242 6,102
Recoverable amount of tax receivables (past due) 1,015 1,002
Discount rate 5.60% 6.10%
Impact on recoverable amount of a 2% increase in discount rate (18) (16)
Impact on recoverable amount of a 2% decrease in discount rate 20 17

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 (eg, 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.

Note 14: Receivables (continued)
Actual
30 June
2012
$m 		30 June
2011
$m

Ageing of Tax Receivables Past Due (Gross)

 
Less than six months 884 982
Between six months and one year 453 467
Between one year and two years 899 1,014
Greater than two years 3,168 2,647
Tax receivables past due 5,404 5,110

The carrying amount of tax receivables provides a reasonable approximation of their fair value.

Note 14: Receivables (continued)
Actual
30 June
2012
$m 		30 June
2011
$m

Levies, Fines and Penalty Receivables

 
Gross ACC levy receivables 3,072 3,251
Gross other levies, fines and penalty receivables 2,286 2,205
Total gross levies, fines and penalty receivables 5,358 5,456
Impairment of ACC levy receivables (122) (79)
Impairment of other levies, fines and penalty receivables (1,969) (1,937)
Total impairment of receivables (2,091) (2,016)
Total levies, fines and penalty receivables 3,267 3,440

Impairment of ACC Levy Receivables

 
Opening balance 79 80
Impairment losses recognised during the year 14 11
Amounts written off as uncollectible -  (12)
Impairment losses reversed 29 - 
Closing balance 122 79
Collective impairment allowance 122 79
Individual impairment allowance    -     - 
Impairment of ACC Levy Receivables 122 79

Impairment of other Levies, Fines and Penalty Receivables

 
Opening balance 1,937 1,729
Impairment losses recognised during the year 145 370
Amounts written off as uncollectible -  - 
Impairment losses reversed (113) (162)
Closing balance 1,969 1,937
Collective impairment allowance 1,969 1,937
Individual impairment allowance    -     - 
Impairment of other Levies, Fines and Penalty Receivables 1,969 1,937

Ageing of Levies, Fines and Penalty Receivables Past Due But Not Impaired

 
Less than six months -  - 
Between six months and one year -  - 
Greater than one year -  - 
Total levies, fines and penalty receivables past due but not impaired    -     - 

The ACC levy receivables are short term, so their carrying amount provides a reasonable approximation of their fair value. Of the other levies, fines and penalties receivables, the majority is in the debtor portfolio administered by the Ministry of Justice (ie, court fines, associated court fees and enforcement fees) with a carrying value of $213 million (2011: $226 million). Their carrying amount provides a reasonable approximation of their fair value. The recoverable amount of these Justice receivables is calculated using discounted cash flows (net of estimated service costs).

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