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Revenue

Table 3 - Breakdown of revenue
Year ended 30 June Forecast
30 June 2017
$ million Actual
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Budget
2016
Budget
2017
Core Crown tax revenue 58,651 61,563 66,636 70,445 75,644 71,971 74,598
Core Crown other revenue 5,154 5,530 5,577 5,676 6,138 6,573 6,173
Core Crown revenue 63,805 67,093 72,213 76,121 81,782 78,544 80,771
Crown entities, SOEs and eliminations 22,506 22,106 22,299 22,038 22,445 22,411 22,125
Total Crown revenue 86,311 89,199 94,512 98,159 104,227 100,955 102,896
% of GDP              
Core Crown tax revenue 26.8% 26.1% 27.4% 27.8% 28.2% 27.8% 27.7%
Core Crown other revenue 2.4% 2.3% 2.3% 2.2% 2.3% 2.5% 2.3%
Core Crown revenue 29.2% 28.4% 29.7% 30.1% 30.5% 30.3% 30.0%
Crown entities, SOEs and eliminations 10.3% 9.4% 9.2% 8.7% 8.4% 8.6% 8.2%
Total Crown revenue 39.5% 37.8% 38.9% 38.8% 38.9% 38.9% 38.3%

Total Crown revenue was $104.2 billion, an increase of $6.1 billion from last year mostly due to increased core Crown tax revenue.

Core Crown Tax Revenue

Core Crown tax revenue was $75.6 billion, up $5.2 billion (7.4%) from the year before, with most of that coming from growth in nominal GDP and its components (eg, employees' compensation and domestic consumption).

Figure 7 - Core Crown tax revenue
Figure 7 - Core Crown tax revenue.
Source: The Treasury

Most major tax types increased over the year, with three tax types making up most of the increase (table 4):

Table 4 - Increase in core Crown tax revenue in nominal terms
Year ended 30 June ($ billion)  
2016 core Crown tax revenue 70.4
Source deductions 1.6
Corporate tax 1.4
GST 1.3
Other movements 0.9
2016 core Crown tax revenue 75.6

Source:  The Treasury

Source deductions increased by $1.6 billion (6.0%). This growth is mainly a result of growth in the number of people in employment (up 3.1%), with a lesser contribution from increases to salaries and wage rates (up 1.6%).

Corporate tax revenue increased by $1.4 billion (12.3%), mainly due to profit growth amongst companies both large and small, and across most sectors of the economy (including a substantial contribution from the finance and insurance sectors). This growth was supported by $0.2 billion (74%) growth in Portfolio Investment Entities (PIE) tax.

Goods and Services Tax (GST) was $1.3 billion (7.1%) higher than last year, with most of the growth coming via domestic consumption reflecting more people in employment, and those in employment, earning more. There was a notable contribution from residential investment activity, such as building new houses and adding to and renovating existing houses.

Table 5 - Increase in core Crown tax revenue as a percentage of GDP
Year ended 30 June (% of GDP)  
2016 core Crown tax revenue 27.8
Composition of GDP (0.1)
Timing 0.1
Interest rates (0.1)
PIE tax 0.1
Other corporate profits 0.2
Other 0.2
2017 core Crown tax revenue 28.2

Source:  The Treasury

Total nominal GDP grew by 5.9% in the year to June 2017 while growth in core Crown tax revenue was 7.4%. Therefore as a share of the economy, core Crown tax revenue increased to 28.2% of GDP, compared to 27.8% last year (table 5).

The majority of the increase came from tax on corporate profits that are not captured in the nominal GDP measure, such as the profits of the finance and insurance sectors, and PIE tax mentioned above.

Offsetting some of this growth, some of the major components of nominal GDP that are principal drivers of tax revenue (total employees' compensation and domestic consumption) are estimated to have grown at a slower rate than total GDP, thereby lowering the tax-to-GDP ratio. As a result, the composition of nominal GDP growth was slightly negative for tax revenue.

Figure 8 - Other revenue
Figure 8 - Other revenue.
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 $6.1 billion increased by $0.5 billion since last year. This increase was mostly attributable to revenue from the New Zealand Emissions Trading Scheme (NZ ETS) (the NZ ETS is explained further on page 14).

The SOE and CE sectors (including inter-segment eliminations) recorded revenue of $22.4 billion, similar to the prior year (table 3).

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