Formats and related files
APPROPRIATION MINISTER(S): Minister of Revenue (M57)
APPROPRIATION ADMINISTRATOR: Inland Revenue Department
RESPONSIBLE MINISTER FOR INLAND REVENUE DEPARTMENT: Minister of Revenue
Details of Appropriations and Capital Injections#
Annual and Permanent Appropriations#
| 2016/17 | |||
|---|---|---|---|
| Titles and Scopes of Appropriations by Appropriation Type | Estimates Budget $000 |
Supplementary Estimates Budget $000 |
Total Budget $000 |
Departmental Output Expenses |
|||
Investigations (M57)This appropriation is limited to undertaking investigation, audit and litigation activities administered by Inland Revenue. |
175,745 | (2,685) | 173,060 |
Management of Debt and Outstanding Returns (M57)This appropriation is limited to activities to prevent returns becoming outstanding and debt becoming overdue, and to collect outstanding returns and overdue payments, whether for the Crown, other agencies or external parties. |
153,277 | (4,991) | 148,286 |
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. |
9,252 | 252 | 9,504 |
Services to Inform the Public About Entitlements and Meeting Obligations (M57)This appropriation is limited to providing information and assistance to the public to make them aware of their obligations and entitlements. This also includes the provision of services to help Ministers fulfil their responsibilities to Parliament and the New Zealand public, other than policy decision-making responsibilities. |
227,232 | (15,087) | 212,145 |
Services to Other Agencies RDA (M57)This appropriation is limited to the provision of services by Inland Revenue to other agencies, where those services are not within the scope of another departmental output expense appropriation in Vote Revenue. |
3,060 | - | 3,060 |
Services to Process Obligations and Entitlements (M57)This appropriation is limited to both the registration, assessment and processing of tax obligations and other entitlements, including associated review and Crown accounting activities, and the collection and sharing of related information with other agencies. |
109,968 | (1,109) | 108,859 |
Total Departmental Output Expenses |
678,534 | (23,620) | 654,914 |
Departmental Other Expenses |
|||
Transformation (M57)This appropriation is limited to the design and implementation of a modern system for tax revenue and social policy administered by Inland Revenue. |
237,000 | (77,270) | 159,730 |
Total Departmental Other Expenses |
237,000 | (77,270) | 159,730 |
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. |
174,000 | (44,737) | 129,263 |
Total Departmental Capital Expenditure |
174,000 | (44,737) | 129,263 |
Benefits or Related 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). |
300,000 | (21,000) | 279,000 |
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). |
900 | - | 900 |
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). |
1,797,000 | (34,000) | 1,763,000 |
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). |
600,000 | (34,000) | 566,000 |
KiwiSaver: Interest (M57)To enable the payment of interest on KiwiSaver contributions as set out in the KiwiSaver Act 2006. |
10,000 | 5,000 | 15,000 |
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. |
728,000 | 65,000 | 793,000 |
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). |
15,000 | (2,000) | 13,000 |
Paid Parental Leave Payments (M57)This appropriation is limited to Paid Parental Leave Payments made to parents in accordance with the Parental Leave and Employment Protection Act 1987. |
277,000 | 10,000 | 287,000 |
Parental Tax Credit PLA (M57)This appropriation is limited to expenses incurred on parental tax credit as provided for in subpart MD of the Income Tax Act 2007 and as authorised by section 185 of the Tax Administration Act 1994. |
29,000 | 1,000 | 30,000 |
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. |
5,900 | - | 5,900 |
Total Benefits or Related Expenses |
3,762,800 | (10,000) | 3,752,800 |
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, authorised by section 65ZH(1) of the Public Finance Act 1989. |
10 | 30 | 40 |
Environmental Restoration Account Interest PLA (M57)This appropriation is limited to interest on Environmental Restoration accounts, authorised by section 65ZH(1) of the Public Finance Act 1989. |
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, authorised by section 65ZH(1) of the Public Finance Act 1989. |
10,000 | (2,000) | 8,000 |
Total Non-Departmental Borrowing Expenses |
12,010 | (1,970) | 10,040 |
Non-Departmental Other Expenses |
|||
Impairment of Debt and Debt Write-Offs (M57)This appropriation is limited to bad debt write-offs for Crown debt administered by Inland Revenue, excluding child support and student loans and to amounts relating to the impairment of this debt. |
1,093,307 | (143,307) | 950,000 |
Impairment of Debt Relating to Child Support (M57)This appropriation is limited to the impairment of child support debt. |
5,000 | - | 5,000 |
Impairment of Debt Relating to Student Loans (M57)This appropriation is limited to the impairment of student loan debt. |
100,000 | 43,000 | 143,000 |
Initial Fair Value Write-Down Relating to Student Loans (M57)This appropriation is limited to the initial fair value write-down of student loans. |
689,000 | - | 689,000 |
Total Non-Departmental Other Expenses |
1,887,307 | (100,307) | 1,787,000 |
Total Annual and Permanent Appropriations |
6,751,651 | (257,904) | 6,493,747 |
Capital Injection Authorisations#
| 2016/17 | |||
|---|---|---|---|
| Estimates Budget $000 |
Supplementary Estimates Budget $000 |
Total Budget $000 |
|
| Inland Revenue Department - Capital Injection (M57) | 54,000 | 4,110 | 58,110 |
Supporting Information#
Part 1 - Vote as a Whole#
1.2 - Trends in the Vote
Summary of Financial Activity
| 2016/17 | |||||
|---|---|---|---|---|---|
| Supplementary Estimates | |||||
| Estimates $000 |
Departmental Transactions $000 |
Non-Departmental Transactions $000 |
Total Transactions $000 |
Total $000 |
|
Appropriations |
|||||
| Output Expenses | 678,534 | (23,620) | - | (23,620) | 654,914 |
| Benefits or Related Expenses | 3,762,800 | N/A | (10,000) | (10,000) | 3,752,800 |
| Borrowing Expenses | 12,010 | - | (1,970) | (1,970) | 10,040 |
| Other Expenses | 2,124,307 | (77,270) | (100,307) | (177,577) | 1,946,730 |
| Capital Expenditure | 174,000 | (44,737) | - | (44,737) | 129,263 |
| Intelligence and Security Department Expenses and Capital Expenditure | - | - | N/A | - | - |
| Multi-Category Expenses and Capital Expenditure (MCA) | |||||
| Output Expenses | - | - | - | - | - |
| Other Expenses | - | - | - | - | - |
| Capital Expenditure | - | N/A | - | - | - |
Total Appropriations |
6,751,651 | (145,627) | (112,277) | (257,904) | 6,493,747 |
Crown Revenue and Capital Receipts |
|||||
| Tax Revenue | 64,986,000 | N/A | 3,429,000 | 3,429,000 | 68,415,000 |
| Non-Tax Revenue | 1,182,000 | N/A | (53,500) | (53,500) | 1,128,500 |
| Capital Receipts | 1,348,000 | N/A | 10,500 | 10,500 | 1,358,500 |
Total Crown Revenue and Capital Receipts |
67,516,000 | N/A | 3,386,000 | 3,386,000 | 70,902,000 |
Part 2 - Details of Departmental Appropriations#
2.1 - Departmental Output Expenses#
Investigations (M57)
Scope of Appropriation
This appropriation is limited to undertaking investigation, audit and litigation activities administered by Inland Revenue.
Expenses and Revenue
| 2016/17 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 175,745 | (2,685) | 173,060 |
| Revenue from the Crown | 175,480 | (2,963) | 172,517 |
| Revenue from Others | 265 | 278 | 543 |
Reasons for Change in Appropriation
This appropriation decreased by $2.685 million to $173.060 million for 2016/17 due to:
- a transfer of $2.109 million from 2016/17 to 2017/18 generated by savings and efficiencies from 2016/17
- a transfer of $1.335 million from 2016/17 to 2017/18, 2018/19, and 2019/20 to align the timing of depreciation and operating costs associated with investment in shorter term solutions to support the organisation until Business Transformation is fully implemented
- the return of $737,000 relating to the reduction in the capital charge rate, and
- the return of $37,000 to the Crown relating to the completion of the implementation of the cashing out research and development tax losses initiative.
This is partially offset by:
- a fiscally neutral adjustment of $985,000 to reflect changes in expenditure assumptions between departmental output expenses
- a fiscally neutral adjustment of $278,000 to reflect a forecasting change from a review of rental recoveries, and
- additional funding of $270,000 for the business tax package initiative.
Management of Debt and Outstanding Returns (M57)#
Scope of Appropriation#
This appropriation is limited to activities to prevent returns becoming outstanding and debt becoming overdue, and to collect outstanding returns and overdue payments, whether for the Crown, other agencies or external parties.
Expenses and Revenue#
| 2016/17 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 153,277 | (4,991) | 148,286 |
| Revenue from the Crown | 150,315 | (4,626) | 145,689 |
| Revenue from Others | 2,962 | (365) | 2,597 |
Reasons for Change in Appropriation#
This appropriation decreased by $4.991 million to $148.286 million for 2016/17 due to:
- a transfer of $2.159 million from 2016/17 to 2017/18 generated by savings and efficiencies from 2016/17
- a fiscally neutral adjustment of $1.800 million to reflect changes in expenditure assumptions between departmental output expenses
- a transfer of $1.295 million from 2016/17 to 2017/18, 2018/19, and 2019/20 to align the timing of depreciation and operating costs associated with investment in shorter term solutions to support the organisation until Business Transformation is fully implemented
- the return of $730,000 relating to the reduction in the capital charge rate
- a fiscally neutral adjustment of $365,000 to reflect a forecasting change from a review of rental and court cost recoveries, and
- the return of $262,000 to the Crown relating to the completion of the implementation of the child support reform programme.
This is partially offset by additional funding of $1.620 million for the business tax package initiative.
Policy Advice (M57)#
Scope of Appropriation#
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.
Expenses and Revenue#
| 2016/17 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 9,252 | 252 | 9,504 |
| Revenue from the Crown | 9,250 | 233 | 9,483 |
| Revenue from Others | 2 | 19 | 21 |
Reasons for Change in Appropriation#
This appropriation increased by $252,000 to $9.504 million for 2016/17 due to:
- a fiscally neutral adjustment of $260,000 to reflect changes in expenditure assumptions between departmental output expenses, and
- a fiscally neutral adjustment of $19,000 to reflect a forecasting change from a review of rental recoveries.
This is partially offset by a transfer of $27,000 from 2016/17 to 2017/18 generated by savings and efficiencies from 2016/17.
Services to Inform the Public About Entitlements and Meeting Obligations (M57)#
Scope of Appropriation#
This appropriation is limited to providing information and assistance to the public to make them aware of their obligations and entitlements. This also includes the provision of services to help Ministers fulfil their responsibilities to Parliament and the New Zealand public, other than policy decision-making responsibilities.
Expenses and Revenue#
| 2016/17 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 227,232 | (15,087) | 212,145 |
| Revenue from the Crown | 225,771 | (15,474) | 210,297 |
| Revenue from Others | 1,461 | 387 | 1,848 |
Reasons for Change in Appropriation#
This appropriation decreased by $15.087 million to $212.145 million for 2016/17 due to:
- a transfer of $6.344 million from 2016/17 to 2017/18, 2018/19, and 2019/20 to align the timing of depreciation and operating costs associated with investment in shorter term solutions to support the organisation until Business Transformation is fully implemented
- a fiscally neutral adjustment of $3.445 million to reflect changes in expenditure assumptions between departmental output expenses
- a transfer of $3.196 million from 2016/17 to 2017/18 generated by savings and efficiencies from 2016/17
- the return of $1.946 million to the Crown relating to the completion of the implementation of the child support reform programme
- the return of $1.062 million relating to the reduction in the capital charge rate
- the return of $148,000 to the Crown relating to the completion of the implementation of the cashing out research and development tax losses initiative, and
- the return of $103,000 to the Crown relating to the completion of the implementation of the paid parental leave payments and parental tax credits initiative.
This is partially offset by:
- additional funding of $770,000 for the business tax package initiative, and
- a fiscally neutral adjustment of $387,000 to reflect a forecasting change from a review of rental recoveries.
Services to Process Obligations and Entitlements (M57)#
Scope of Appropriation#
This appropriation is limited to both the registration, assessment and processing of tax obligations and other entitlements, including associated review and Crown accounting activities, and the collection and sharing of related information with other agencies.
Expenses and Revenue#
| 2016/17 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 109,968 | (1,109) | 108,859 |
| Revenue from the Crown | 88,971 | (1,235) | 87,736 |
| Revenue from Others | 20,997 | 126 | 21,123 |
Reasons for Change in Appropriation#
This appropriation decreased by $1.109 million to $108.859 million for 2016/17 due to:
- a transfer of $3.701 million from 2016/17 to 2017/18, 2018/19, and 2019/20 to align the timing of depreciation and operating costs associated with investment in shorter term solutions to support the organisation until Business Transformation is fully implemented
- a transfer of $1.807 million from 2016/17 to 2017/18 generated by savings and efficiencies from 2016/17
- the return of $410,000 to the Crown relating to the completion of the implementation of the child support reform programme
- the return of $410,000 to the Crown relating to the completion of the implementation of the paid parental leave payments and parental tax credits initiative
- the return of $402,000 relating to the reduction in the capital charge rate, and
- the return of $185,000 to the Crown relating to the completion of the implementation of the cashing out research and development tax losses initiative.
This is partially offset by:
- a fiscally neutral adjustment of $4 million to reflect changes in expenditure assumptions between departmental output expenses
- additional funding of $1.680 million for the Automatic Exchange of Information initiative, and
- a fiscally neutral adjustment of $126,000 to reflect a forecasting change from a review of rental recoveries.
2.2 - Departmental Other Expenses#
Transformation (M57)#
Scope of Appropriation
This appropriation is limited to the design and implementation of a modern system for tax revenue and social policy administered by Inland Revenue.
Expenses
| 2016/17 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Total Appropriation | 237,000 | (77,270) | 159,730 |
Reasons for Change in Appropriation
This appropriation decreased by $77.270 million to $159.730 million for 2016/17 due to:
- a fiscally neutral transfer of $89.624 million from 2016/17 to 2017/18 to align approved funding with the updated plan for the implementation of Business Transformation, and
- a return of $1.146 million relating to the reduction in the capital charge rate.
This is partially offset by a fiscally neutral transfer of $13.500 million from 2015/16 to 2016/17 to complete Stage 1 of Business Transformation.
2.3 - Departmental Capital Expenditure and Capital Injections#
Inland Revenue Department - Capital Expenditure PLA (M57)#
Scope of Appropriation
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.
Capital Expenditure
| 2016/17 | |||
|---|---|---|---|
| Estimates $000 |
Supplementary Estimates $000 |
Total $000 |
|
| Forests/Agricultural | - | - | - |
| Land | - | - | - |
| Property, Plant and Equipment | 22,000 | (9,000) | 13,000 |
| Intangibles | 152,000 | (35,737) | 116,263 |
| Other | - | - | - |
Total Appropriation |
174,000 | (44,737) | 129,263 |
Reasons for Change in Appropriation
This appropriation decreased by $44.737 million to $129.263 million for 2016/17 due to:
- the reduction of the Business Transformation budget by $53.861 million to $91.139 million for 2016/17.
This is partially offset by:
- a forecasting update of $5.014 million relating to the maintain and improve business infrastructure projects and leasehold improvement projects
- additional funding of $3 million relating to the Automatic Exchange of Information (AEOI) initiative, and
- additional funding of $1.110 million relating to the business tax package initiative.
Capital Injections and Movements in Departmental Net Assets
Inland Revenue Department
| Details of Net Asset Schedule | 2016/17 Main Estimates Projections $000 |
2016/17 Supplementary Estimates Projections $000 |
Explanation of Projected Movements in 2016/17 |
|---|---|---|---|
| Opening Balance | 279,539 | 273,134 | |
| Capital Injections | 54,000 | 58,110 | Capital injections of $54 million for Business Transformation which was approved by Cabinet in November 2015, $3 million for the Automatic Exchange of Information (AEOI) initiative, and $1.110 million for the business tax package initiative. |
| Capital Withdrawals | - | (75,783) | Capital transfer of $73.800 million from 2016/17 to 2017/18 to better align the funding with the implementation of Business Transformation, and a capital withdrawal of $1.983 million for the cashing out research and development tax losses initiative. |
| Surplus to be Retained (Deficit Incurred) | - | - | |
| Other Movements | - | - | |
Closing Balance |
333,539 | 255,461 |
Part 3 - Details of Non-Departmental Appropriations#
3.2 - Non-Departmental Benefits or Related Expenses#
Child Support Payments PLA (M57)
Scope of Appropriation
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).
Reasons for Change in Appropriation
This appropriation decreased by $21 million to $279 million for 2016/17 due to lower than predicted receipts from non-custodial parents.
Family Tax Credit PLA (M57)#
Scope of Appropriation#
Family Support payments made to beneficiaries and non-beneficiaries during the year (expenses incurred pursuant to section 185 of the Tax Administration Act 1994).
Reasons for Change in Appropriation#
This appropriation decreased by $34 million to $1,763 million for 2016/17 due to stronger than expected family income growth which reduced entitlement.
In-Work Tax Credit PLA (M57)#
Scope of Appropriation#
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).
Reasons for Change in Appropriation#
This appropriation decreased by $34 million to $566 million for 2016/17 due to stronger than expected family income growth which reduced entitlement.
KiwiSaver: Interest (M57)#
Scope of Appropriation#
To enable the payment of interest on KiwiSaver contributions as set out in the KiwiSaver Act 2006.
Reasons for Change in Appropriation#
This appropriation increased by $5 million to $15 million for 2016/17 due to higher than expected activity in the KiwiSaver scheme.
KiwiSaver: Tax Credit (M57)#
Scope of Appropriation#
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.
Reasons for Change in Appropriation#
This appropriation increased by $65 million to $793 million for 2016/17 due to contributing membership uptake being stronger than expected.
Minimum Family Tax Credit PLA (M57)#
Scope of Appropriation#
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).
Reasons for Change in Appropriation#
This appropriation decreased by $2 million to $13 million for 2016/17 due to lower than expected uptake during the year.
Paid Parental Leave Payments (M57)#
Scope of Appropriation#
This appropriation is limited to Paid Parental Leave Payments made to parents in accordance with the Parental Leave and Employment Protection Act 1987.
Reasons for Change in Appropriation#
This appropriation increased by $10 million to $287 million for 2016/17 due to stronger than expected labour market outturns boosting eligibility for the payments.
Parental Tax Credit PLA (M57)#
Scope of Appropriation#
This appropriation is limited to expenses incurred on parental tax credit as provided for in subpart MD of the Income Tax Act 2007 and as authorised by section 185 of the Tax Administration Act 1994.
Reasons for Change in Appropriation#
This appropriation increased $1 million to $30 million for 2016/17 due to higher than expected year-to-date demand.
3.3 - Non-Departmental Borrowing Expenses#
Adverse Event Interest PLA (M57)#
Scope of Appropriation
This appropriation is limited to interest on Adverse Event Income Equalisation Reserve accounts held by taxpayers in the farming and agriculture business, authorised by section 65ZH(1) of the Public Finance Act 1989.
Reasons for Change in Appropriation
This appropriation increased by $30,000 to $40,000 for 2016/17 due to an increase in the use of the scheme resulting from an increase in the number of adverse events.
Income Equalisation Interest PLA (M57)#
Scope of Appropriation#
This appropriation is limited to interest on Income Equalisation Reserve Scheme accounts held by taxpayers in the farming, fishing or forestry industries, authorised by section 65ZH(1) of the Public Finance Act 1989.
Reasons for Change in Appropriation#
This appropriation decreased by $2 million to $8 million for 2016/17 due to lower than forecast use of the scheme.
3.4 - Non-Departmental Other Expenses#
Impairment of Debt and Debt Write-Offs (M57)#
Scope of Appropriation
This appropriation is limited to bad debt write-offs for Crown debt administered by Inland Revenue, excluding child support and student loans and to amounts relating to the impairment of this debt.
Reasons for Change in Appropriation
This appropriation decreased by $143.307 million to $950 million for 2016/17 due to a decrease in the size of the overdue debt book. This is a result of increased write-offs in 2016/17 and corresponding impairment credits.
Impairment of Debt Relating to Student Loans (M57)#
Scope of Appropriation#
This appropriation is limited to the impairment of student loan debt.
Reasons for Change in Appropriation#
This appropriation increased by $43 million to $143 million for 2016/17 due to the result of an interim valuation of the scheme and a contingency for volatility in the data and modelling assumptions in the final valuation. The interim valuation was completed in April 2017.