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Revenue

Table 2 - Breakdown of revenue
Year ended 30 June Actual
2012
Actual
2013
Actual
2014
Actual
2015
Actual
2016
Forecast
30 June 2016
Budget 2015 Budget 2016
$million              
Core Crown tax revenue 55,081 58,651 61,563 66,636 70,445 68,868 69,682
Core Crown other revenue 5,347 5,154 5,530 5,577 5,676 5,843 5,647
Core Crown revenue 60,428 63,805 67,093 72,213 76,121 74,711 75,329
Crown entities, SOEs and eliminations 22,918 22,506 22,106 22,299 22,038 22,681 22,185
Total Crown revenue 83,346 86,311 89,199 94,512 98,159 97,392 97,514
% of GDP              
Core Crown tax revenue 25.6% 26.8% 26.2% 27.6% 28.0% 27.6% 27.9%
Core Crown other revenue 2.5% 2.4% 2.4% 2.3% 2.3% 2.3% 2.3%
Core Crown revenue 28.1% 29.2% 28.5% 29.9% 30.2% 29.9% 30.1%
Crown entities, SOEs and eliminations 10.6% 10.3% 9.4% 9.2% 8.8% 9.1% 8.9%
Total Crown revenue 38.7% 39.4% 38.0% 39.1% 39.0% 39.0% 39.0%

Total Crown revenue was $98.2 billion, an increase of $3.6 billion from a year earlier mostly due to higher core Crown tax revenue.

Core Crown Tax Revenue

Core Crown tax revenue was $70.4 billion, up $3.8 billion (5.7%) from the year before, mostly owing to an increase in the level of economic activity and the composition of that activity.

Total nominal GDP grew by 4.2% in the year to June 2016. However, not all components of GDP grew at the same rate. For example, total salaries and wages are estimated to have increased by 5%, owing to a mixture of employment growth and salary and wage rate growth, and the corporate tax result indicates that profit growth was also strong. On the other hand, growth in nominal domestic consumption was somewhat lower at around 3.5%.

Figure 6 - Core Crown tax revenue
Figure 6 - Core Crown tax revenue   .
Source:  The Treasury

As a result, all major tax types increased over the year, with three tax types making up most of the increase (Table 3):

  • Source deductions increased by $1.7 billion (6.8%). Total employment and salary and wages rates both grew by more than 2% on average over the year, and average hours worked also increased.
  • Goods and Services Tax (GST) increased by $1.0 billion (6.1%), largely owing to growth in domestic consumption of 3.5%, but boosted by strong growth in both residential investment (up 16%) and inbound tourist spending (up 17%).
  • Corporate tax increased by $0.9 billion (8.7%), mostly in relation to growth in taxable profits from the 2016 tax year.
Table 3 - Increase in core Crown tax revenue
Year ended 30 June ($ billion)
2015 core Crown tax revenue 66.6
Source deductions 1.7
GST 1.0
Corporate tax 0.9
Customs and excise duties 0.3
Other movements (0.1)
2016 core Crown tax revenue 70.4

Source:  The Treasury

As a share of the economy, core Crown tax revenue was 28.0% of GDP, compared to 27.6% last year (Table 4). Approximately half of the total 0.4% of GDP increase was a result of corporate tax growing at more than double the rate of growth of nominal GDP. Fiscal drag, ie, additional PAYE tax generated by the progressive personal income tax scale (higher marginal tax rates applying to higher incomes), added an estimated 0.1% of GDP to tax revenue. A 50% decline in Portfolio Investment Entity (PIE) tax slowed the tax revenue growth rate.

Table 4 - Increase in core Crown tax revenue
Year ended 30 June (% of GDP)
2015 core Crown tax revenue 27.6
Composition of GDP 0.4
Fiscal drag 0.1
PIE tax (0.1)
2016 core Crown tax revenue 28.0

Source:  The Treasury

Other Revenue

Other revenue includes other fees and levies (eg, ACC levies), revenue from operations of Crown entities (CEs) and State-owned enterprises (SOEs), interest revenue and dividend revenue.

Core Crown other revenue, at $5.7 billion increased by $0.1 billion, while the SOE and CE sectors (including eliminations) recorded revenue of $22.0 billion, $0.3 billion less than a year earlier (Table 2).

The decrease in the SOE sector was mostly attributable across multiple SOEs which recorded lower revenue which was largely offset by lower operating expenses. Within the CE sector, ACC had decreased revenue due to the reduction of ACC levies, but this was offset by increased revenue spread over the rest of the sector.

Figure 7 - Other revenue
Figure 7 - Other revenue   .
Source:  The Treasury
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