Annual report - 2004 - Part 4
Financial capability from the 2004 Annual Report
In 2003-04, the department's baseline increased by $21.725 million to $407.544 million (GST-exclusive).
This net increase included additional funding to:
- target aggressive tax planning by large corporates and high wealth individuals
- the child support scheme, including funding to reduce child support debt.
Additional funding was also provided for remuneration and reply-paid envelopes for small businesses. In 2003-04, our actual expenditure totalled $404.617 million.
The department is appropriated under eight output classes. All eight of these output classes came within appropriation in 2003-04. The output class appropriation composition is shown in the following chart.
Personnel expenditure continues to be our major expenditure area, accounting for 61% of our total expenditure. Operating expenditure (30%) is the next largest expenditure category followed by depreciation (7%) and capital charge (2%).
Consultants and contractors
Included in our operating expenditure is $10.067 million (2.5%) for consultants and contractors. The department engages consultants and contractors to complement internal resources and provide specialist short-term advice on specific projects and new initiatives. Further details about Inland Revenue's 2003-04 expenditure on consultants and contractors are provided in Additional information (Table 9).
Finance strategy
We are currently developing a long-term finance strategy that will enable us to identify and respond to financial pressures foreseen over the next six years and beyond. The work includes developing a long term financial planning process that is integrated with the overall strategic and annual planning processes. The strategy will focus on evaluating and enhancing the organisation's financial management capability, and on improving processes for assessing future strategic options and scenarios.
Funding for 2004-05
For 2004-05 the department's baseline will increase by $25.172 million to $432.716 million (GST-exclusive). This net increase includes funding for building future capability, enhancements to the administration of child support, and maintaining and improving taxpayer compliance. In addition, the department has received funding to implement government initiatives such as Working for Families, changes to paid parental leave and initiatives targeted to reducing compliance costs for small and medium enterprises.
Sustainability
Managing resources in a sustainable way is important for Inland Revenue. We already have good systems in place around our people and finances, and we are now placing more emphasis on how we use non-renewable resources, and how we interact with our environment. Examples of our initiatives include:
- Inland Revenue has an agreement with the Energy Efficiency and Conservation Authority (EECA) under the Energy Wise Government Programme. This aims to improve energy efficiency across the core public sector by 15% in the five-year period to 2005.
- We participate in the "Emprove" self-assessment process with EECA. Two initiatives from this have been:
- more transparent performance reporting (complete), and
- better energy load management (under way).
- Our performance reporting has been enhanced this year with the ability to monitor our daily electricity usage at most of our large sites, through online access supplied through our network provider. This more thorough monitoring has enabled us to investigate any usage anomalies and provides us with the opportunity to measure the impact of various conservation initiatives.
- We routinely carry out building audits, which include energy audits, on premises before entering into rental agreements, or on an ad hoc basis when data reveals a usage anomaly. Four audits were conducted in the 2003-04 year.
Date published: 16 Nov 2004
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