New Zealand objectives
The primary motivation for providing TE data would be to provide information on the full cost of New Zealand public sector expenditure as a supplement to our current financial reporting.[11]This motivation can be broken down into three sub-parts:
1) Fiscal strategy: transparency and accountability
The TE statement will improve the transparency and accountability around fiscal strategy by providing more complete information about the full scope of government expenditures.
2) To estimate or list the stock of tax expenditures
New Zealand publishes the estimated cost of new tax expenditures when they are introduced, but does not provide public information on the current stock of tax expenditures.[12]
3) To make direct and indirect expenditures comparable
TE reporting will allow comparison between TEs and equivalent direct spending programmes.
Structural tax questions, while relevant, are not the primary motivation for TE reporting in New Zealand.
Notes
- [11]No decision has been made as to how TEs would sit relative to the Budget documents. TEs could be released as supplementary information either in formal documentation or as a separate release covering the same period.
- [12]The 2004 amendment of the Public Finance Act 1989 added a requirement to report significant tax policy changes (Sections 26O & 26R). This reports the estimated cost in the year of introduction. There is no requirement to report the accumulated stock of tax expenditures beyond the year of introduction.
