Formats and related files
MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Revenue (M57)
ADMINISTERING DEPARTMENT: Inland Revenue Department
MINISTER RESPONSIBLE FOR INLAND REVENUE DEPARTMENT: Minister of Revenue
Details of Appropriations#
Details of Annual and Permanent Appropriations#
| 2012/13 | |||
|---|---|---|---|
| Titles and Scopes of Appropriations by Appropriation Type | Estimates Budget $000 |
Supplementary Estimates Budget $000 |
Total Budget $000 |
Departmental Output Expenses |
|||
Management of Debt and Outstanding Returns (M57)Taking action where returns are outstanding and where payments are overdue, including providing people with assistance on the actions they need to take to meet their obligations. This includes collection on behalf of other agencies and external parties. |
130,872 | (12,124) | 118,748 |
Policy Advice (M57)This appropriation is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on government policy matters. |
7,808 | 459 | 8,267 |
Services to Inform the Public About Entitlements and Meeting Obligations (M57)Providing information and assistance to customers on the application of the law. Responding to customer enquiries about tax and social support programmes. Adjudication on behalf of the Commissioner on proposed taxpayer assessments. Providing binding rulings and other statements on the interpretation and application of the law administered by Inland Revenue. Provision of services to Ministers to enable them to discharge their portfolio (other than policy decision-making responsibilities). |
256,103 | 339 | 256,442 |
Services to Process Obligations and Entitlements (M57)Registering tax payers, making tax assessments, assessing child support liabilities including providing a readily accessible inexpensive process for reviewing assessments, receiving and making payments to customers, processing applications and payments for social support programmes, collection of ACC Earners' levies, supplying information to other government agencies and accounting and reporting the collection of Crown revenue. |
124,789 | (1,233) | 123,556 |
Taxpayer Audit (M57)Identifying risks to revenue and designing and undertaking audit activities accordingly. Managing litigation of disputed tax cases. |
172,341 | 5,533 | 177,874 |
Total Departmental Output Expenses |
691,913 | (7,026) | 684,887 |
Benefits and Other Unrequited Expenses |
|||
Child Support Payments PLA (M57)Child support payments to custodial persons who are not dependent on the state for financial support (expenses incurred pursuant to section 141 of the Child Support Act 1991). |
227,000 | - | 227,000 |
Child Tax Credit PLA (M57)Extra assistance for low to middle income families who are not dependent on the state for financial support (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
1,600 | 100 | 1,700 |
Family Tax Credit PLA (M57)Family Support payments made to beneficiaries and non-beneficiaries during the year (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
2,113,000 | (66,000) | 2,047,000 |
In-Work Tax Credit PLA (M57)Extra assistance for low to middle income families where the person works a minimum of 20 hours per week and does not have a partner, or a person and their partner work a minimum of 30 hours per week (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
565,000 | (24,000) | 541,000 |
KiwiSaver: Interest (M57)To enable the payment of interest on KiwiSaver contributions as set out in the KiwiSaver Act 2006. |
7,000 | - | 7,000 |
KiwiSaver: Kickstart Payment (M57)To enable the one-off payment made on opening a KiwiSaver account for members who meet the required eligibility criteria as set in the KiwiSaver Act 2006. |
177,000 | 43,000 | 220,000 |
KiwiSaver: Tax Credit (M57)To enable the payment of a tax credit to KiwiSaver members and the payment of residual tax credits to employers as set out in the Income Tax Act 2007. |
504,000 | 7,000 | 511,000 |
Minimum Family Tax Credit PLA (M57)Extra payment made to families where at least one parent is working for salary or wages (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
11,000 | 1,000 | 12,000 |
Paid Parental Leave Payments PLA (M57)Paid Parental Leave Payments made to parents eligible under the Parental Leave and Employment Protection Act 1987. |
163,000 | 4,000 | 167,000 |
Parental Tax Credit PLA (M57)To enable payment of additional financial support to be made to working families for the eight week period following the birth of a child (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
17,000 | - | 17,000 |
Payroll Subsidy (M57)To enable the payment of a subsidy to a payroll agent undertaking employers' payroll-related tax compliance activities on their behalf. |
3,000 | (3,000) | - |
Payroll Subsidy PLA (M57)This appropriation is limited to the payment of a subsidy to a payroll agent undertaking employers' payroll-related tax compliance activities on their behalf, section 185 of the Tax Administration Act 1994. |
- | 2,600 | 2,600 |
Total Benefits and Other Unrequited Expenses |
3,788,600 | (35,300) | 3,753,300 |
Non-Departmental Borrowing Expenses |
|||
Adverse Event Interest PLA (M57)This appropriation is limited to interest on Adverse Event Income Equalisation Reserve accounts held by taxpayers in the farming and agriculture business (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
10 | - | 10 |
Environmental Restoration Account Interest PLA (M57)This appropriation is limited to interest on Environmental Restoration accounts (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
2,000 | - | 2,000 |
Income Equalisation Interest PLA (M57)This appropriation is limited to interest on Income Equalisation Reserve Scheme accounts held by taxpayers in the farming, fishing or forestry industries (expenses incurred pursuant to section 185 of the Tax Administration Act 1994). |
7,000 | - | 7,000 |
Total Non-Departmental Borrowing Expenses |
9,010 | - | 9,010 |
Non-Departmental Other Expenses |
|||
Bad Debt Write-Offs (M57)This appropriation is limited to bad debt write-offs for Crown debt administered by Inland Revenue. |
894,000 | 81,000 | 975,000 |
Impairment of Debt (M57)This appropriation is limited to amounts relating to impairment arising from objective evidence of one or more loss events that occurred after the initial recognition of the debt, and the loss event (or events) has had a reliably measurable impact on the estimated future cash flows of the Crown debt book. |
246,522 | 22,478 | 269,000 |
Impairment of Debt Relating to Child Support (M57)This appropriation is limited to amounts relating to impairment arising from objective evidence of one or more loss events that occurred after the initial recognition of the debt, and the loss event (or events) has had a reliably measurable impact on the estimated future cash flows of the collective book of child support debt. |
422,000 | (94,000) | 328,000 |
Impairment of Debt Relating to Student Loans (M57)This appropriation is limited to amounts relating to impairment arising from objective evidence of one or more loss events that occurred after the initial recognition of the loan, and the loss event (or events) has had a reliably measurable impact on the estimated future cash flows of the collective book of student loan debt. |
110,000 | 206,000 | 316,000 |
Initial Fair Value Write-Down - Student Loans (M57)This appropriation is limited to the initial fair value write-down of student loans. |
651,242 | (113,242) | 538,000 |
Total Non-Departmental Other Expenses |
2,323,764 | 102,236 | 2,426,000 |
Departmental Capital Expenditure |
|||
Inland Revenue Department - Capital Expenditure PLA (M57)This appropriation is limited to the purchase or development of assets by and for the use of the Inland Revenue Department, as authorised by section 24(1) of the Public Finance Act 1989. |
104,000 | (33,000) | 71,000 |
Total Departmental Capital Expenditure |
104,000 | (33,000) | 71,000 |
Total Annual and Permanent Appropriations |
6,917,287 | 26,910 | 6,944,197 |
Details of Projected Movements in Departmental
Net Assets#
Inland Revenue Department
| Details of Net Asset Schedule | 2012/13 Main Estimates Projections $000 |
2012/13 Supplementary Estimates Projections $000 |
Explanation of Projected Movements in 2012/13 |
|---|---|---|---|
| Opening Balance | 266,606 | 259,951 | Supplementary Estimates opening balance reflects the audited results as at 30 June 2012. |
| Capital Injections | 6,476 | 11,041 | Capital injections of $2.574 million for the long-term accommodation solution in Wellington, $265,000 for the Budget 2010 tax package, and $8.202 million for the child support scheme reform initiative. |
| Capital Withdrawals | - | (646) | Capital withdrawal of $646,000 for the Budget 2010 tax package initiative. |
| Surplus to be Retained (Deficit Incurred) | - | - | |
| Other Movements | - | - | |
Closing Balance |
273,082 | 270,346 |
Information Supporting the Supplementary Estimates Vote Revenue#
MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Revenue (M57)
ADMINISTERING DEPARTMENT: Inland Revenue Department
MINISTER RESPONSIBLE FOR INLAND REVENUE DEPARTMENT: Minister of Revenue
Part 1 - Summary of the Vote#
Part 1.3 - Trends in the Vote
Summary of Financial Activity
| 2012/13 | |||||
|---|---|---|---|---|---|
| Supplementary Estimates | |||||
| Estimates $000 |
Departmental Transactions $000 |
Non-Departmental Transactions $000 |
Total Transactions $000 |
Total $000 |
|
Appropriations |
|||||
| Output Expenses | 691,913 | (7,026) | - | (7,026) | 684,887 |
| Benefits and Other Unrequited Expenses | 3,788,600 | N/A | (35,300) | (35,300) | 3,753,300 |
| Borrowing Expenses | 9,010 | - | - | - | 9,010 |
| Other Expenses | 2,323,764 | - | 102,236 | 102,236 | 2,426,000 |
| Capital Expenditure | 104,000 | (33,000) | - | (33,000) | 71,000 |
| Intelligence and Security Department Expenses and Capital Expenditure | - | - | N/A | - | - |
Total Appropriations |
6,917,287 | (40,026) | 66,936 | 26,910 | 6,944,197 |
Crown Revenue and Capital Receipts |
|||||
| Tax Revenue | 51,848,000 | N/A | 1,465,000 | 1,465,000 | 53,313,000 |
| Non-Tax Revenue | 1,488,300 | N/A | (32,900) | (32,900) | 1,455,400 |
| Capital Receipts | 951,000 | N/A | 271,000 | 271,000 | 1,222,000 |
Total Crown Revenue and Capital Receipts |
54,287,300 | N/A | 1,703,100 | 1,703,100 | 55,990,400 |
Part 2 - Details and Expected Performance for Output Expenses#
Part 2.1 - Departmental Output Expenses
Management of Debt and Outstanding Returns (M57)
Scope of Appropriation
Expenses and Revenue
| 2012/13 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 130,872 | (12,124) | 118,748 |
| Revenue from Crown | 127,385 | (11,554) | 115,831 |
| Revenue from Other | 3,487 | (570) | 2,917 |
Reasons for Change in Appropriation
The decrease in appropriation of ($12.124 million) relates to:
- a transfer of $756,000 from 2011/12 to 2012/13 for the transformation programme
- a return of savings to the Crown of ($2.520 million) related to funding for child support reciprocal cases in Australia
- a transfer of ($2 million) from 2012/13 to 2013/14 relating to the Budget 2012 revenue investment initiative
- a transfer of ($500,000) from 2012/13 to 2013/14 relating to Budget 2010 audit and compliance activity
- a transfer of ($290,000) from 2012/13 to 2013/14 for the student loans redesign programme
- a fiscally neutral return of funding of ($570,000) related to sub-leasing recoveries from other government agencies, and
- a fiscally neutral adjustment of ($7 million) between departmental output expenses.
None of the above appropriation changes affect the output performance standards.
Policy Advice (M57)
Scope of Appropriation
Expenses and Revenue
| 2012/13 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 7,808 | 459 | 8,267 |
| Revenue from Crown | 7,806 | 459 | 8,265 |
| Revenue from Other | 2 | - | 2 |
Reasons for Change in Appropriation
The increase in appropriation of $459,000 relates to:
- a fiscally neutral transfer of $9,000 from Vote Foreign Affairs and Trade, and
- a fiscally neutral adjustment of $450,000 between departmental output expenses.
None of the above appropriation changes affect the output performance standards.
Services to Inform the Public About Entitlements and Meeting Obligations (M57)
Scope of Appropriation
Expenses and Revenue
| 2012/13 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 256,103 | 339 | 256,442 |
| Revenue from Crown | 252,742 | 1,859 | 254,601 |
| Revenue from Other | 3,361 | (1,520) | 1,841 |
Reasons for Change in Appropriation
The increase in appropriation of $339,000 relates to:
- a transfer of $1.681 million from 2011/12 to 2012/13 for the transformation programme
- a transfer of $608,000 from 2011/12 to 2012/13 for the enterprise desktop project
- a transfer of $297,000 from 2011/12 to 2012/13 and a transfer of ($649,000) from 2012/13 to 2013/14 for the student loans redesign programme
- a fiscally neutral transfer from Vote Finance of $380,000 for the 'Better Services for Less' cross-agency initiative
- a return of funding of ($410,000) relating to the simplifying filing requirements for individuals initiative
- additional funding of $3.556 million relating to the child support scheme reform initiative
- a transfer of ($2.444 million) from 2012/13 to 2013/14 for the child support scheme reform initiative
- a transfer of ($140,000) from 2012/13 to 2013/14 for the KiwiSaver evaluation project
- a transfer of ($618,000) from 2012/13 to 2013/14 for the eServices programme
- a transfer of ($142,000) from 2012/13 to 2013/14 for making KiwiSaver more cost effective
- a fiscally neutral return of funding of ($1.520 million) related to sub-leasing recoveries from other government agencies, and
- a fiscally neutral adjustment of ($260,000) between departmental output expenses.
None of the above appropriation changes affect the output performance standards.
Services to Process Obligations and Entitlements (M57)
Scope of Appropriation
Expenses and Revenue
| 2012/13 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 124,789 | (1,233) | 123,556 |
| Revenue from Crown | 103,092 | (473) | 102,619 |
| Revenue from Other | 21,697 | (760) | 20,937 |
Reasons for Change in Appropriation
The decrease in appropriation of ($1.233 million) relates to:
- a transfer of $517,000 from 2011/12 to 2012/13 for the transformation programme
- a transfer of $1.418 million from 2011/12 to 2012/13 for the enterprise desktop project
- a transfer of $1.190 million from 2011/12 to 2012/13 and a transfer of ($198,000) from 2012/13 to 2013/14 for the student loans redesign programme
- the return of funding of ($3.397 million) relating to the simplifying filing requirements for individuals initiative
- additional funding of $8.299 million relating to the child support scheme reform initiative
- a transfer of ($5.701 million) from 2012/13 to 2013/14 for the child support scheme reform initiative
- a transfer of ($1.443 million) from 2012/13 to 2013/14 for the eServices programme
- a transfer of ($568,000) from 2012/13 to 2013/14 for making KiwiSaver more cost effective
- a fiscally neutral return of funding of ($760,000) related to sub-leasing recoveries from other government agencies, and
- a fiscally neutral adjustment of ($590,000) between departmental output expenses.
None of the above appropriation changes affect the output performance standards.
Taxpayer Audit (M57)
Scope of Appropriation
Expenses and Revenue
| 2012/13 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 172,341 | 5,533 | 177,874 |
| Revenue from Crown | 171,201 | 6,483 | 177,684 |
| Revenue from Other | 1,140 | (950) | 190 |
Reasons for Change in Appropriation
The increase in appropriation of $5.533 million relates to:
- a transfer of $1.046 million from 2011/12 to 2012/13 for the transformation programme
- a transfer of ($1.150 million) from 2012/13 to 2013/14 relating to the Budget 2012 revenue investment initiative
- a transfer of ($450,000) from 2012/13 to 2013/14 relating to Budget 2010 audit and compliance activity
- a transfer of ($363,000) from 2012/13 to 2013/14 for the student loans redesign programme
- a fiscally neutral return of funding of ($950,000) related to sub-leasing recoveries from other government agencies, and
- a fiscally neutral adjustment of $7.400 million between department output expenses.
None of the above appropriation changes affect the output performance standards.
Part 3 - Details for Benefits and Other Unrequited Expenses#
Part 3.2 - Non-Departmental Benefits and Other Unrequited Expenses
Child Tax Credit PLA (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will increase by $100,000 from $1.6 million to $1.7 million for 2012/13. The child tax credit has not been available to new recipients since April 2006. Existing recipients may continue to receive the credit until they change to the in-work tax credit or otherwise lose eligibility. The appropriation is declining slightly slower than forecasted in the Estimates (Budget 2012).
Family Tax Credit PLA (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will decrease by $66 million from $2,113 million to $2,047 million for 2012/13. The decrease reflects lower entitlements than forecast in the Estimates (Budget 2012). Entitlements decline over time through abatement as income grows.
In-Work Tax Credit PLA (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will decrease by $24 million from $565 million to $541 million for 2012/13. The decrease reflects lower entitlements than forecast in the Estimates (Budget 2012). Entitlements decline over time through abatement as income grows.
KiwiSaver: Kickstart Payment (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will increase by $43 million from $177 million to $220 million for 2012/13. The kickstart is a one-off payment to new members on first joining the KiwiSaver scheme. The payment is sensitive to growth in the labour market, promotional efforts from scheme providers, and the proportion of the labour force that has already joined the scheme. Growth in new membership is beginning to ease but has nonetheless been higher than forecast in the Estimates (Budget 2012).
KiwiSaver: Tax Credit (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will increase by $7 million from $504 million to $511 million for 2012/13. This appropriation is primarily for member tax credit claims but also includes residual activity for employer tax credits which ceased in 2009. The member tax credit is linked to the level of member contributions made to the scheme and is paid annually. The increase in appropriation reflects increased entitlements from a slightly larger membership base, and stronger income growth.
Minimum Family Tax Credit PLA (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will increase by $1 million from $11 million to $12 million for 2012/13. This is driven by an increase in the volume of claims for the minimum family tax credit.
Paid Parental Leave Payments PLA (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will increase by $4 million from $163 million to $167 million for 2012/13. Paid parental leave entitlements reflect both the wages and employment tenure of the parents of newborns. The increase in the Supplementary Estimates reflects an increase in the volume of claims since October 2012. Wage growth (and hence entitlement) has also been higher than predicted in the Estimates (Budget 2012).
Payroll Subsidy PLA (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will decrease by $400,000 from $3 million to $2.6 million for 2012/13. This is due to lower growth than predicted in the Estimates (Budget 2012).
Part 5 - Details and Expected Results for Other Expenses#
Part 5.2 - Non-Departmental Other Expenses
Bad Debt Write-Offs (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will increase by $81 million from $894 million to $975 million for 2012/13. The increase reflects a $50 million allowance for volatility in the debt growth assumptions and an expected increase in write-offs.
Impairment of Debt (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will increase by $22.478 million from $246.522 million to $269 million for 2012/13. Impairment is linked to the forecast for overdue debt balanced against business initiatives to limit debt growth. The increase in appropriation reflects a $50 million allowance for volatility in the debt growth assumptions, offset by a reduction due to reduced growth in the forecast overdue debt balance.
Impairment of Debt Relating to Child Support (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will decrease by $94 million from $422 million to $328 million for 2012/13. Reductions to forecast child support revenue have seen a corresponding reduction in impairment as this appropriation is linked to changes in child support debt.
Impairment of Debt Relating to Student Loans (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will increase by $206 million from $110 million to $316 million for 2012/13 as a result of an interim valuation of the scheme and an allowance for volatility in data and modelling assumptions. The interim valuation of the scheme was completed in March 2013. The final valuation as at 30 June 2013 will be based on an updated model, additional rolled-forward scheme data, and June macroeconomic assumptions.
Initial Fair Value Write-Down - Student Loans (M57)
Scope of Appropriation
Reasons for Change in Appropriation
This appropriation will decrease by $113.242 million from $651.242 million to $538 million for 2012/13 as a result of a reduction in the forecasts of new lending to students which in turn reduces the initial fair write-down and a technical change in the cost of lending calculation.
Part 6 - Details and Expected Results for Capital Expenditure#
Part 6.1 - Departmental Capital Expenditure
Inland Revenue Department - Capital Expenditure PLA (M57)
Scope of Appropriation
Capital Expenditure
| 2012/13 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Forests/Agricultural | - | - | - |
| Land | - | - | - |
| Property, Plant and Equipment | 38,000 | (12,167) | 25,833 |
| Intangibles | 66,000 | (20,833) | 45,167 |
| Other | - | - | - |
Total Appropriation |
104,000 | (33,000) | 71,000 |
Reasons for Change in Appropriation
The reduction in the 2012/13 departmental capital expenditure budget is mainly due to the mainframe replacement project and child support scheme reform project, with work originally planned for 2012/13 now to be completed in the 2013/14 financial year.