Vote Revenue - Supplementary Estimates of Appropriations 2007/08

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

Details of Annual and Permanent Appropriations - Revenue
Titles and Scopes of Appropriations by Appropriation Type	Estimates Budget $000	Supplementary Estimates Budget $000	Total Budget $000
	2007/08
Departmental Output Expenses
Management of Debt and Outstanding Returns (M57) Taking follow-up 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.	97,010	(11,913)	85,097
Policy Advice (M57) Advising on all aspects of tax policy and social policy measures that interact with the tax system. Drafting tax legislation and rewriting the Income Tax Act. Negotiating and maintaining New Zealand's network of double tax agreements with other countries. Forecasting tax revenues and providing ministerial services.	12,411	2,243	14,654
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.	215,956	29,480	245,436
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.	118,904	6,091	124,995
Taxpayer Audit (M57) Identifying risks to revenue and designing and undertaking audit activities accordingly. Managing litigation of disputed tax cases.	152,889	(2,319)	150,570
Total Departmental Output Expenses	597,170	23,582	620,752
Non-Departmental Output Expenses
Retirement Commissioner (M57) To enable the Retirement Commissioner to incorporate the enhancements to KiwiSaver into its communications on retirement income policies.	-	380	380
Total Non-Departmental Output Expenses	-	380	380
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).	186,000	4,000	190,000
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).	8,000	2,300	10,300
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). Name change as part of the Working for Families package	1,950,000	116,100	2,066,100
In-Work tax Credit PLA (M57) Extra assistance for low to middle families who are working at least 20 hours per week or 30 hours per week between both parents if they are couple. Name changed as part of the Working for families package.	560,000	(3,300)	556,700
Kiwi Saver: Kickstart payment (M57) To enable the one-off payment made on opening a KiwiSaver account for people who meet the required eligibility criteria as set in the KiwiSaver Act 2006.	276,000	387,000	663,000
KiwiSaver Employer Tax Credit (M57) To enable the payment of a tax credit to employers in respect of their contributions to KiwiSaver as set out in the Income Tax Act 2004.	62,000	39,000	101,000
KiwiSaver Member Tax Credit (M57) To enable the payment of a tax credit to KiwiSaver members as set out in the Income Tax Act 2004.	144,000	104,000	248,000
KiwiSaver: Fee Subsidy (M57) To enable the payment made to KiwiSaver accounts of the subsidy for provider fees as set out in the KiwiSaver Act 2006.	8,000	5,000	13,000
KiwiSaver: Interest (M57) To enable the payment made of interest on KiwiSaver contributions as set in the KiwiSaver Act 2006.	900	3,900	4,800
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).	14,000	800	14,800
On-payment of Employee KiwiSaver Contributions to KiwiSaver Providers (M57) To enable the on-payment of employee KiwiSaver contributions collected by Inland Revenue to KiwiSaver providers	-	139,000	139,000
On-payment of Employee KiwiSaver Contributions to KiwiSaver Providers PLA (M57) To enable the on-payment of employee KiwiSaver contributions collected by Inland Revenue to KiwiSaver providers (expenses incurred pursuant to section 73 of the KiwiSaver Act 2006).	-	435,000	435,000
Paid Parental Leave Payments PLA (M57) Paid Parental Leave Payments made to parents eligible under the Parental Leave and Employment Protection Act 1987.	126,000	10,880	136,880
Parental Tax Credit PLA (M57) Additional financial support 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).	23,000	(900)	22,100
Payroll Subsidy (M57) Subsidy for the purposes of subsidising the costs of a payroll agent undertaking employers' payroll-related tax compliance activities	10,500	(9,680)	820
Total Benefits and Other Unrequited Expenses	3,368,400	1,233,100	4,601,500
Borrowing Expenses
Adverse Event Interest PLA (M57) Interest on Adverse Event deposits relating to withdrawals and deposits made by taxpayers in the farming industry.	2	8	10
Environmental Restoration Account Interest PLA (M57) Interest on the deposits made to the Environmental Restoration Accounts Scheme as authorised by section 185 of the Tax Administration Act 1994.	-	1,000	1,000
Income Equalisation Interest PLA (M57) Interest on Income Equalisation deposits relating to withdrawals and deposits by taxpayers in the farming, fishing or forestry industries.	2,000	1,450	3,450
Total Borrowing Expenses	2,002	2,458	4,460
Other Expenses to be incurred by the Crown
Child Support Doubtful Debt Provision (M57) Provisioning of Doubtful Debt for Child Support penalties debt Pursuant to the Public Finance Act 1989.	2,268	(2,268)	-
General Tax and Family Support Bad Debt Write-Offs (M57) Provision for write-downs of Crown debt administered by Inland Revenue due to bad debt write-offs, or bad debt provisions, resulting from the need to value debt according to accepted accounting practice.	-	713,000	713,000
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.	-	85,000	85,000
Impairment of Debt Relating to General Tax and Family 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 debt.	-	150,000	150,000
Research and Development Credit (M57) To provide a tax credit to businesses that are undertaking research and development	10,000	27,000	37,000
Student loan impairments (M57) An amount is recognised at reporting date if there is objective evidence of impairment as a result 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 loans.	16,743	183,257	200,000
Total Other Expenses to be incurred by the Crown	29,011	1,155,989	1,185,000
Capital Expenditure to be Incurred by the Department
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	-	118,910	118,910
Total Capital Expenditure to be Incurred by the Department	-	118,910	118,910
Total Annual and Permanent Appropriations	3,996,583	2,534,419	6,531,002

Details of Projected Movements in Departmental
Net Assets#

Inland Revenue Department

Inland Revenue Department - Details of Projected Movements in Departmental Net Assets - Revenue
Details of Net Asset Schedule	2007/08 Estimates Projections $000	2007/08 Supplementary Estimates Projections $000	Explanation of Projected Movements in 2007/08
Opening Balance	160,274	155,195	Supplementary Estimates opening balance reflects the audited results as at 30 June 2007.
Capital Injections	23,063	47,092	An additional $24.029 million has been injected since the 2007/08 Main Estimates. This includes $1.928 million for the long-term property solution in Wellington, $21.808 million for the implementation of KiwiSaver, $159,000 for the implementation of tax relief on redundancy payments and $134,000 for the implementation of the Budget 2008 personal tax package.
Capital Withdrawals	-	(2,766)	An additional $2.766 million has been withdrawn since the 2007/08 Main Estimates. This includes a $1.729 million withdrawal to return student loan implementation funding and a withdrawal of $1.037 million to return leasehold improvements funding associated with the long-term property solution in Wellington.
Surplus to be Retained (Deficit Incurred)	-	-
Other Movements	-	-
Closing Balance	183,337	199,521

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

Summary of Financial Activity - Revenue
	Estimates $000	Supplementary Estimates			Total $000
	2007/08
	Estimates $000	Departmental Transactions $000	Non-Departmental Transactions $000	Total Transactions $000	Total $000
Appropriations
Output Expenses	597,170	23,582	380	23,962	621,132
Benefits and Other Unrequited Expenses	3,368,400	N/A	1,233,100	1,233,100	4,601,500
Borrowing Expenses	2,002	-	2,458	2,458	4,460
Other Expenses	29,011	-	1,155,989	1,155,989	1,185,000
Capital Expenditure	-	118,910	-	118,910	118,910
Intelligence and Security Department Expenses and Capital Expenditure	-	-	N/A	-	-
Total Appropriations	3,996,583	142,492	2,391,927	2,534,419	6,531,002
Crown Revenue and Receipts
Tax Revenue	49,624,000	N/A	N/A	1,593,000	51,217,000
Non-Tax Revenue	782,660	N/A	N/A	40,340	823,000
Capital Receipts	639,691	N/A	N/A	(13,091)	626,600
Total Crown Revenue and Receipts	51,046,351	N/A	N/A	1,620,249	52,666,600

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

Taking follow-up 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.

Reasons for Change in Appropriation

The change in this appropriation is primarily a result of fiscally neutral transfers between departmental output expenses. This occurred because of movements in the allocation of overheads.

Policy Advice (M57)#

Scope of Appropriation#

Advising on all aspects of tax policy and social policy measures that interact with the tax system. Drafting tax legislation and rewriting the Income Tax Act. Negotiating and maintaining New Zealand's network of double tax agreements with other countries. Forecasting tax revenues and providing ministerial services.

Reasons for Change in Appropriation#

The change in this appropriation is primarily a result of fiscally neutral transfers between departmental output expenses. This occurred because of movements in the allocation of overheads.

Services to Inform the Public About Entitlements and Meeting Obligations (M57)#

Scope of Appropriation#

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.

Reasons for Change in Appropriation#

The change in this appropriation is the result of both fiscally neutral transfers between departmental output expenses and the injection of KiwiSaver initiative funding.

Services to Process Obligations and Entitlements (M57)#

Scope of Appropriation#

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.

Reasons for Change in Appropriation#

The change in this appropriation is the result of both fiscally neutral transfers between departmental output expenses and the injection of KiwiSaver initiative funding.

Taxpayer Audit (M57)#

Scope of Appropriation#

Identifying risks to revenue and designing and undertaking audit activities accordingly. Managing litigation of disputed tax cases.

Reasons for Change in Appropriation#

The change in this appropriation is primarily a result of fiscally neutral transfers between departmental output expenses. This occurred because of movements in the allocation of overheads.

Part 2.2 - Non-Departmental Output Expenses#

Intended Impacts, Outcomes and Objectives#

Intended Impacts, Outcomes and Objectives - Part 2.2 NonDepartmental Output Expenses - Revenue
Intended Impacts, Outcomes or Objectives of Appropriations	Appropriations
Primary outcome - improving the economic and social wellbeing of New Zealanders	Retirement Commissioner

Retirement Commissioner (M57)#

Scope of Appropriation

To enable the Retirement Commissioner to incorporate the enhancements to KiwiSaver into its communications on retirement income policies.

Expenses

Expenses - Retirement Commissioner (M57) - Revenue
	2007/08
	Estimates $000	Supplementary Estimates $000	Total $000
Total Appropriation	-	380	380

Reasons for Change in Appropriation

This appropriation reflects one-off funding provided to the Retirement Commission to enable it to incorporate the enhancements to KiwiSaver into its communications on retirement income policies. The primary funding mechanism for the Retirement Commission is through Vote Social Development.

Summary of Service Providers#

Summary of Service Providers - Summary of Service Providers - Revenue
Provider	Estimates $000	Supplementary Estimates $000	Total $000	Reporting Mechanism	Expiry of Resourcing Commitment
	2007/08
Retirement Commission	-	380	380	Output Agreement between Retirement Commissioner and Minister for Social Development and Employment for the year ended 30 June 2007.	Funding through Vote Revenue was one-off.

The above table summarises funding to be allocated through Vote Revenue to non-departmental providers, along with an indication of the mechanism to be used for reporting actual performance and (where determined) the length of the funding commitment.

Part 3 - Details for Benefits and Other Unrequited Expenses#

Part 3.2 - Non-Departmental Benefits and Other Unrequited Expenses#

Intended Impacts, Outcomes and Objectives

Intended Impacts, Outcomes and Objectives - Part 3.2 NonDepartmental Benefits and Other Unrequited Expenses - Revenue
Intended Impacts, Outcomes or Objectives of Appropriations	Appropriations
Primary outcome - Improving the economic and social wellbeing of New Zealanders	On-Payment of Employee KiwiSaver Contributions to KiwiSaver Providers On-Payment of Employee KiwiSaver Contributions to KiwiSaver Providers PLA

Kiwi Saver: Kickstart payment (M57)

Scope of Appropriation

To enable the one-off payment made on opening a KiwiSaver account for people who meet the required eligibility criteria as set in the KiwiSaver Act 2006.