Annual report - 2004 - Part 1

Delivering on our outcomes from the 2004 Annual Report - 1

$37.9 billion revenue assessed
$505 million family assistance distributed
$296 million child support distributed
18,002 student loans repaid

Our outcomes relate to our four primary business areas: taxation, child support collection and distribution, family assistance and paid parental leave distribution and student loan repayments.

Taxation

Outcome sought: Revenue is available to fund government programmes through an effective and efficient tax system and administration.

In 2003-04 total tax revenue was $37.997 billion, $2.212 billion above that forecast in our Statement of Intent and $172 million (0.5%) above Inland Revenue's 2004 Budget forecast. Total tax revenue was made up of $29.177 billion in direct taxation and $8.818 billion in indirect taxation ².

^{2: Direct taxation directly relates to the economic action of the agents that bear it, the most common example being income tax.
In contrast, indirect tax does not relate to the economic actions of the agent. An example of indirect taxation is GST.}

The main reasons for increased tax revenue were stronger than anticipated growth in source deductions (these include income tax, PAYE, companies tax) and GST. The growth in these taxes was driven by increased employment.

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Inland Revenue assessed 84% of core crown government revenue ³ , an increase of 1.25% on last year. The increase relates to revenue growth over the last year.

^{3: Total revenue levied through the Crown's sovereign power. It includes taxation, levies, fees, fines and penalties, but excludes investment income, sales of goods and services, and other revenue sources.}

This year we have been further developing our understanding of compliance behaviour. One of the ways we are doing this is by looking at the percentage of returns or payments filed on time. In 2002, on average, 93% of business payments were received on time.

Child support

Outcome sought: Parents living apart maintain financial responsibility for their children.

This year we collected $248.6 million (73%) of the $339.5 million child support assessed for the year, $15.6 million more than collected in 2002-03. Of that collected, 61.1% was paid in full and on time (target 63%).

We also collected $40.5 million of previous years' assessments and penalties and $1.2 million of current year penalties, an increase of $1.7 million on last year. Since the scheme began in 1992, we have collected 86.4% of the child support assessed ($2.232 billion collected of the $2.585 billion assessed). This performance is at a similar level to Australia ⁴ and compares very well to the 40.7% collection rate achieved before the 1992 scheme.

^{4: Excludes private collections.}

The average child support assessment for the year was $2,391, with 1,095 people paying the maximum, and 64,600 assessed to pay the minimum amount (out of 141,962 child support payers). The increase from 2002 to 2004 is attributed to increases in wages, including the average wage, and inflation indexing of the minimum payment since 2002.

We distributed $296.1 million in child support ⁵, paying $124.5 million to custodial parents (143,776 have a current entitlement) and $171.6 million to the Crown to offset benefits paid to custodians. Payment to the Crown includes penalties as well as assessments paid.

^{5: This figure includes current year assessments collected and any previous years' assessments that were also collected this year.}