|Year ended 30 June
30 June 2013
|Budget 12||Budget 13|
|Core Crown tax revenue||54,681||50,744||51,557||55,081||58,651||58,251||58,286|
|Core Crown other revenue||4,801||5,472||5,993||5,484||5,498||5,940||5,523|
|Core Crown revenue||59,482||56,216||57,550||60,565||64,149||64,191||63,809|
|Crown entities, SOEs and eliminations||20,024||18,509||24,013||22,918||22,506||22,112||22,654|
|Total Crown revenue||79,506||74,725||81,563||83,483||86,655||86,303||86,463|
|% of GDP|
|Core Crown tax revenue||29.5%||26.5%||25.7%||26.4%||27.6%||26.7%||27.3%|
|Core Crown other revenue||2.6%||2.9%||3.0%||2.6%||2.6%||2.7%||2.6%|
|Core Crown revenue||32.1%||29.3%||28.7%||29.1%||30.2%||29.5%||29.8%|
|Crown entities, SOEs and eliminations||10.8%||9.7%||12.0%||11.0%||10.6%||10.1%||10.6%|
|Total Crown revenue||42.9%||39.0%||40.7%||40.1%||40.7%||39.6%||40.4%|
Total Crown revenue was $86.6 billion, an increase of $3.2 billion from a year earlier. While tax revenue was $3.6 billion higher than in 2012 this was partially offset by a fall in the earthquake related revenue of Crown entities.
Core Crown Tax Revenue
In nominal terms, core Crown tax revenue increased $3.6 billion to reach its highest nominal level ever. As a share of the economy, tax revenue increased to 27.6% of GDP, but remains below the levels seen before the global financial crisis (Figure 6).
- Figure 6 - Core Crown tax revenue
- Source: The Treasury
All major tax types contributed to the increase in tax over the year, as detailed in Table 4, with four tax types making up most of the increase:
- Source deductions: $1.1 billion higher than last year owing to a stronger labour market. More people were employed (0.7% higher than 2012), and wages were higher (2.1% above the same time a year earlier), which directly resulted in increased tax from source deductions. Also, as taxpayers' earnings increase, their average tax rate increases owing to the progressive nature of the personal income tax scale (often referred to as fiscal drag). In addition, the tax exemptions related to KiwiSaver contributions were removed during the year, increasing the tax take.
- Other individuals: $1.1 billion (or 36.8%) higher than a year earlier, largely owing to growth in taxable income over the past year and boosted by the base broadening measures from Budget 2010 (eg, removing the depreciation exemption on buildings). While the tax policy changes took effect in the 2011/12 tax year, for many taxpayers the financial impact first occurred within the current financial year. In addition, strength in equity markets is likely to have led to higher income from investments.
- GST: $0.6 billion stronger as both private consumption and residential investment increased (up 2.8% and 23% respectively).
- Corporate tax: $0.5 billion higher than the year before, mainly owing to growth in current-year taxable profits of firms and an increase in investment returns.
- Compared to forecast in Budget 2013, core Crown tax revenue was $0.4 billion (0.6%) above, with the largest differences being in corporate tax and GST.
- Corporate tax was $0.5 billion above Budget 2013 forecast mainly owing to higher-than-expected current-year taxable profits, mostly concentrated within a few sectors of the economy.
- GST was $0.2 billion lower than forecast mainly because both private consumption and residential investment were slightly weaker than forecast.
|2012 core Crown tax revenue||55.1|
|2013 core Crown tax revenue||58.7|
- Figure 7 - Core Crown tax revenue against Budget 2013
- Source: The Treasury
Other revenue includes other fees and levies (eg, ACC levies), revenue from operations of Crown entities (CEs) and State-owned enterprises (SOEs), interest income and dividend income.
Core Crown other revenue was steady at $5.5 billion while the SOE and CE sectors recorded revenue of $22.5 billion, $0.4 billion lower than a year earlier (Figure 8).
- Figure 8 - Other revenue
- Source: The Treasury
Most of the reduction in revenue ($0.6 billion) was attributable to a fall in EQC's reinsurance revenue. The reduction was a result of a revised estimate in the outstanding receivable from reinsurers, taking into account the latest information at 30 June 2013. There were corresponding reductions in the insurance expense (detailed on the next page) that more than offset the reduction in revenue, meaning that overall the EQC operating balance was better than last year.
- This tax type includes tax paid by sole traders, partnerships and trusts