Annual report 2005
Part 6 Financial schedules for administered accounts - Crown
Statement of accounting policies
For the year ended 30 June 2005
Reporting entity
The Crown financial schedules have been prepared in accordance with the requirements of the Public Finance Act 1989.
Inland Revenue administers activities on an agency basis on the Crown's behalf. These activities comprise elements of income, expenditure, assets, liabilities and cash flows, which form part of the consolidated Crown financial statements of the Government of New Zealand.
The financial information has been prepared by Inland Revenue and represents extract information of the Crown activities which are administered by Inland Revenue.
Measurement system
These schedules have been prepared on the basis of modified historical cost unless otherwise stated. The accrual basis of accounting has been used unless otherwise stated.
Accounting policies
The following particular accounting policies, which materially affect the measurement of financial results and financial position, have been applied.
Budget figures
The 2004-05 actuals are reported against Inland Revenue's independent forecast, prepared as part of the preparation of the 2004-05 Main and Supplementary Estimates.
Revenue
The Crown provides many services and benefits that do not give rise to revenue. Further, payment of tax does not, of itself, entitle a taxpayer to an equivalent value of services or benefits, as there is no direct relationship between paying tax and receiving Crown services and transfers. Where possible, revenue is recognised at the time the debt to the Crown arises.
| Revenue type | Revenue recognition point |
|---|---|
| Source deductions (PAYE) | When an individual earns income that is subject to PAYE |
| Resident withholding tax 1 | When an individual is paid interest or dividends subject to deduction at source |
| Fringe benefit tax (FBT) | When benefits are provided that give rise to FBT |
| Provisional tax 2 | Payment due date |
| Terminal tax 2 | Assessment filed date |
| Goods and services tax (GST) | When the liability to the Crown is incurred |
| Stamp, cheque and credit card duties | When the liability to the Crown is incurred |
| Other indirect taxes | When the debt to the Crown arises |
1 Corresponds to withholding taxes on residents' interest and dividends.
2 Provisional and terminal taxes are paid by "other persons" and companies.
Investment income
Investment income is recognised in the period in which it is earned.
Receivables and advances
Receivables and advances are recorded at the amounts expected to be ultimately collected in cash.
Liabilities
All liabilities are recorded at the estimated obligation to pay.
Contingent liabilities
Contingent liabilities are recorded in the schedules of contingent liabilities at the point at which the contingency is evident.
Changes in accounting policies
There have been no changes in the Crown accounting policies applicable to the preparation of financial statements of Crown activities administered by Inland Revenue for Crown consolidation, from those used in the previous year. All Crown accounting policies have been applied on a basis consistent with the previous year.
Schedule of revenue - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Notes | Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|---|
|
|
Revenue |
|
|
|
|
|
29,177,946 |
Direct taxation |
|
32,782,901 |
30,496,000 |
32,184,000 |
|
8,818,900 |
Indirect taxation |
|
9,219,722 |
9,118,000 |
9,274,000 |
|
37,996,846 |
Total taxation |
|
42,002,623 |
39,614,000 |
41,458,000 |
|
241,943 |
Compulsory fees, fines, penalties and levies |
|
272,245 |
241,100 |
278,800 |
|
383,885 |
Investment income |
|
434,788 |
448,530 |
444,618 |
|
38,622,674 |
Total operating revenue |
|
42,709,656 |
40,303,630 |
42,181,418 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of expenditure - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Notes | Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|---|
|
1,189,831 |
Benefits and other unrequited expenses |
|
1,213,177 |
1,316,300 |
1,285,500 |
|
200,449 |
Change in debt provisions |
|
666,255 |
149,786 |
241,537 |
|
217,492 |
Student loan write-offs |
|
226,459 |
210,383 |
248,788 |
|
1,399 |
Borrowing expenses |
|
5,772 |
1,800 |
5,006 |
|
1,609,171 |
Total operating expenditure |
|
2,111,663 |
1,678,269 |
1,780,831 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of assets - Crown as administered by Inland Revenue
as at 30 June 2005
| Actual 2004 $000 |
Notes | Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|---|
|
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
1,379,830 |
Cash and bank balances |
|
2,050,064 |
1,600,417 |
1,379,830 |
|
5,737,776 |
Receivables and advances |
|
5,657,937 |
5,521,902 |
5,639,765 |
|
7,117,606 |
Total current assets |
|
7,708,001 |
7,122,319 |
7,019,595 |
|
|
Non-current assets |
|
|
|
|
|
4,751,981 |
Receivables and advances |
|
5,258,494 |
5,591,912 |
5,339,942 |
|
4,751,981 |
Total non-current assets |
|
5,258,494 |
5,591,912 |
5,339,942 |
|
11,869,587 |
Total assets |
|
12,966,495 |
12,714,231 |
12,359,537 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of liabilities - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Notes | Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|---|
|
|
Liabilities |
|
|
| |
|
|
Current liabilities |
|
|
| |
|
5,801,176 |
Payables and provisions |
|
7,215,678 |
6,682,039 |
6,797,657 |
|
213,511 |
Borrowings |
|
166,889 |
69,232 |
212,115 |
|
6,014,687 |
Total current liabilities |
7,382,567 |
6,751,271 |
7,009,772 | |
|
6,014,687 |
Total liabilities |
7,382,567 |
6,751,271 |
7,009,772 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of movements in equity - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|
|
37,137,911 |
Net result from Crown operating activities |
40,734,114 |
38,770,361 |
40,537,587 |
|
6,113,499 |
Opening cash balance |
5,854,900 |
6,123,169 |
5,854,900 |
|
10,627,609 |
Disbursements from New Zealand Debt Management Office |
11,261,499 |
11,508,600 |
10,728,963 |
|
(48,024,119) |
Paid to New Zealand Debt Management Office |
(52,266,585) |
(50,439,170) |
(51,771,685) |
|
5,854,900 |
Closing balance |
5,583,928 |
5,962,960 |
5,349,765 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of cash flows from operating activities - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|
|
|
Cash flows from operating activities |
|
|
|
|
|
Direct taxation |
|
|
|
|
|
Individuals: |
|
|
|
|
16,486,040 |
Source deductions |
17,834,327 |
17,104,000 |
17,654,000 |
|
4,351,649 |
Other persons |
4,639,964 |
4,500,000 |
4,542,000 |
|
(1,405,983) |
Other persons' refunds |
(1,364,576) |
(1,340,000) |
(1,372,000) |
|
409,779 |
Fringe benefit tax |
431,420 |
431,000 |
427,000 |
|
19,841,485 |
Sub-total individuals |
21,541,135 |
20,695,000 |
21,251,000 |
|
|
Companies: |
|
|
|
|
7,527,411 |
Gross company tax - other |
8,861,256 |
7,293,000 |
7,943,000 |
|
75,712 |
Gross company tax - state-owned enterprises |
121,647 |
386,000 |
363,000 |
|
1,541 |
Gross company tax - Crown entities |
926 |
56,000 |
48,000 |
|
64,000 |
Gross company tax - NZ Super fund |
50,441 |
181,000 |
234,000 |
|
(1,087,511) |
Refunds |
(735,220) |
(1,016,000) |
(782,000) |
|
6,581,153 |
Sub-total companies |
8,299,050 |
6,900,000 |
7,806,000 |
|
|
Withholding tax: |
|
|
|
|
1,216,773 |
Residents' interest |
1,497,733 |
1,300,000 |
1,470,000 |
|
52,992 |
Residents' dividends |
60,352 |
55,000 |
60,000 |
|
128,046 |
Foreign source dividends |
185,147 |
135,000 |
175,000 |
|
775,850 |
Non-residents' income |
949,069 |
814,000 |
923,000 |
|
525,703 |
Specified superannuation tax |
545,852 |
546,000 |
546,000 |
|
2,699,364 |
Sub-total withholding tax |
3,238,153 |
2,850,000 |
3,174,000 |
|
29,122,002 |
Total income tax |
33,078,338 |
30,445,000 |
32,231,000 |
|
|
Other direct taxation |
|
|
|
|
2,276 |
Estate and gift duties |
2,310 |
2,000 |
2,000 |
|
2,276 |
Sub-total other direct taxation |
2,310 |
2,000 |
2,000 |
|
29,124,278 |
Total direct taxation |
33,080,648 |
30,447,000 |
32,233,000 |
|
|
Indirect taxation |
|
|
|
|
|
Goods and services tax: |
|
|
|
|
14,564,692 |
GST (Inland Revenue) |
15,358,541 |
15,667,000 |
15,340,000 |
|
(6,312,830) |
GST (refunds) |
(6,717,819) |
(6,922,000) |
(6,422,000) |
|
8,251,862 |
Sub-total GST |
8,640,722 |
8,745,000 |
8,898,000 |
|
|
Other indirect taxation |
|
|
|
|
8,930 |
Stamp and cheque duties |
8,150 |
9,000 |
9,000 |
|
47,238 |
Approved issuer levy |
58,046 |
45,000 |
53,000 |
|
295,164 |
Gaming duties |
311,840 |
318,000 |
314,000 |
|
(477) |
Other |
10,379 |
1,000 |
3,000 |
|
350,855 |
Sub-total other indirect taxation |
388,415 |
373,000 |
379,000 |
|
8,602,717 |
Total indirect taxation |
9,029,137 |
9,118,000 |
9,277,000 |
|
37,726,995 |
Total taxation receipts |
42,109,785 |
39,565,000 |
41,510,000 |
|
170,496 |
Compulsory fees, fines and penalties (child support) |
176,992 |
189,100 |
174,800 |
|
|
Other receipts: |
|
|
|
|
215,935 |
Interest from investment (student loan) |
258,820 |
204,452 |
253,210 |
|
(4,535) |
Other operating receipts (ACC) |
(3) |
0 |
0 |
|
211,400 |
Total other receipts |
258,817 |
204,452 |
253,210 |
|
38,108,891 |
Total cash infl ow/(outflow) from operating activities |
42,545,594 |
39,958,552 |
41,938,010 |
|
|
Cash disbursed for: |
|
|
|
|
0 |
Finance cost |
0 |
(1,800) |
(5,006) |
|
(1,045,470) |
Family assistance tax credits |
(1,069,374) |
(1,166,300) |
(1,140,500) |
|
(1,045,470) |
Total cash disbursed to operations |
(1,069,374) |
(1,168,100) |
(1,145,506) |
|
37,063,421 |
Net cash inflow/(outflow) from operating activities |
41,476,220 |
38,790,452 |
40,792,504 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of cash flows from investing activities - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|
|
|
Cash flows from investing activities |
|
|
|
|
|
Cash was provided from: |
|
|
|
|
231,222 |
Repayment of advances (student loan capital) |
251,494 |
271,018 |
251,614 |
|
231,222 |
Net cash inflow/(outflow) from investing activities |
251,494 |
271,018 |
251,614 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of cash flows from financing activities - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|
|
|
Cash flows from financing activities |
|
|
|
|
|
Cash was provided from: |
|
|
|
|
62,039 |
Income equalisation scheme |
50,404 |
74,000 |
110,461 |
|
62,039 |
Total cash provided |
50,404 |
74,000 |
100,461 |
|
|
Cash was disbursed to: |
|
|
|
|
(180,759) |
Repayment of income equalisation |
(102,798) |
(204,900) |
(111,857) |
|
(180,759) |
Total cash disbursed |
(102,798) |
(204,900) |
(111,857) |
|
(118,720) |
Net cash inflow/(outflow) from financing activities |
(52,394) |
(130,900) |
(1,396) |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of cash flow movements - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|
|
37,175,924 |
Net movement in cash |
41,675,320 |
38,930,570 |
41,042,722 |
|
1,600,417 |
Opening cash balance |
1,379,830 |
1,600,417 |
1,379,830 |
|
10,627,609 |
Disbursements from New Zealand Debt Management Office |
11,261,499 |
11,508,600 |
10,728,963 |
|
(48,024,119) |
Paid to New Zealand Debt Management Office |
(52,266,585) |
(50,439,170) |
(51,771,685) |
|
1,379,830 |
Closing balance |
2,050,064 |
1,600,417 |
1,379,830 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of operating surplus to operating cash flows - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|
|
37,137,911 |
Net result Crown operations |
40,734,114 |
38,770,361 |
40,537,587 |
|
|
Movement in working capital |
|
|
|
|
(72,674) |
(Inc)/dec student loan short-term |
(25,224) |
(46,383) |
(25,225) |
|
112,025 |
Inc/(dec) provision bad debts |
489,073 |
64,448 |
167,236 |
|
(443,928) |
(Inc)/dec tax receivables (general tax) |
(215,989) |
(44,000) |
60,000 |
|
21,210 |
(Inc)/dec GST debtors |
(72,384) |
0 |
0 |
|
(73,742) |
(Inc)/dec receivables (child support) |
(95,637) |
(52,000) |
(104,000) |
|
973,810 |
Inc/(dec) payables (student loans) |
1,010,308 |
1,058,585 |
996,481 |
|
2,074 |
Inc/(dec) payables (others) |
928 |
0 |
0 |
|
170,958 |
Inc/(dec) tax refundable |
403,266 |
0 |
0 |
|
689,733 |
Total working capital movements |
1,494,341 |
980,650 |
1,094,492 |
|
|
Other non-cash items |
|
|
|
|
(229,823) |
Other non-cash items (student loan capital) |
(245,722) |
(271,018) |
(251,614) |
|
(534,400) |
Student loan provision |
(506,513) |
(689,541) |
(587,961) |
|
(764,223) |
Total other non-cash items |
(752,235) |
(960,559) |
(839,575) |
|
37,063,421 |
Net cash flows from operating activities |
41,476,220 |
38,790,452 |
40,792,504 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of contingent liabilities - Crown as administered by Inland Revenue
As at 30 June 2005
| Actual 2004 $000 |
Notes | Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|---|
|
|
Contingent liabilities |
|
|
| |
|
469,336 |
Contingent liabilities |
|
381,902 |
350,000 |
380,000 |
|
469,336 |
Total quantifiable contingent liabilities |
381,902 |
350,000 |
380,000 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of accident compensation collections - Crown as administered by Inland Revenue
as at 30 June 2005
| Actual 2004 $000 |
Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|
|
|
Accident compensation collection type |
|
|
|
|
|
Residual claims levy and earners' account levy |
|
|
|
|
(4,145) |
(self-employed)* |
(3) |
0 |
0 |
|
(386) |
Residual claims levy (employers)* |
0 |
0 |
0 |
|
675,265 |
Earner premium (employees - provisional) |
739,527 |
711,700 |
737,800 |
|
670,734 |
Total |
739,524 |
711,700 |
737,800 |
* For the 1999 return period, Inland Revenue started collecting residual claims and earners' levies, instead of the old ACC premiums. From 1 April 2002, ACC took over the responsibility by collecting residual claims levies.
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Schedule of student loan movements - Crown as administered by Inland Revenue
for the year ended 30 June 2005
| Actual 2004 $000 |
Actual 2005 $000 |
Main Estimates 2005 $000 |
Supp Estimates 2005 $000 | |
|---|---|---|---|---|
|
|
Analysis of student loans |
|
|
|
|
|
outstanding balance |
|
|
|
|
5,965,655 |
Total loans outstanding (including interest) |
6,674,574 |
6,848,414 |
6,653,142 |
|
(718,775) |
Total provisions (capital and interest) |
(908,153) |
(793,140) |
(796,907) |
|
5,246,880 |
Total student loans |
5,766,421 |
6,055,274 |
5,856,235 |
|
4,649,934 |
Opening balance |
5,246,880 |
5,322,686 |
5,246,880 |
|
973,810 |
Amount advanced in current year |
1,010,308 |
1,058,585 |
996,481 |
|
383,885 |
Interest accrued on outstanding loan balances |
434,788 |
448,530 |
444,618 |
|
(231,222) |
Repayment of base capital |
(251,494) |
(271,018) |
(251,614) |
|
(215,935) |
Repayment of accrued interest |
(258,820) |
(204,452) |
(253,210) |
|
(217,492) |
Small balances and interest written-off |
(226,459) |
(210,383) |
(248,788) |
|
(98,552) |
Movement in provision |
(189,379) |
(88,674) |
(78,132) |
|
2,452 |
Other |
597 |
0 |
0 |
|
5,246,880 |
Closing balance |
5,766,421 |
6,055,274 |
5,856,235 |
The accompanying accounting policies and notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the results of its operations for the period, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2005.
Provision for student loans
The methodology used to provide for student loans contains a capital and an interest component. These provisions are periodically reviewed for appropriateness and the methodologies updated where necessary.
Capital provision
The provision on the outstanding capital issued is 12.8% (2004: 11.4%). The key variables that impact on the expected level of write-off relate to death and bankruptcy write-offs as well as debt that will not be collected because of retirement, child-rearing or disability because these borrowers do not meet the repayment threshold obligation. The underlying assumptions regarding the borrowing characteristics and income growth profiles of borrowers and the expected level of defaulters are based on the most current information. The provision is sensitive to the assumptions on borrowing characteristics and income growth profiles, and so is regularly reassessed as new information becomes available.
Interest write-off provision
The provision for interest write-offs on interest accrued after 31 December 1999 was reviewed in light of changes to Government policy, resulting in a substantial increase in the provision level to 70% (from 17%). This reflected changes to the student loan scheme allowing the full write-off of interest while students continue to study along with the increased income thresholds used to determine repayments through the income tax system. The effective provision for interest write-offs from 1 January 2004 was around 50% and from 1 January 2005 it was approximately 55%. The interest rate provision is reviewed annually.
Fair value
The estimated fair value of the student loan balance as at 30 June 2005 administered by Inland Revenue has been determined to be approximately $5,342 million ($5,030 million at 30 June 2004). The fair value is less than the book value by $424 million, but this is not considered to indicate the need to impair the book value, largely as the two approaches to determining a value are not directly comparable.
The fair value has been determined by projecting forward the expected cash flows from the student loan scheme and discounting them back at an appropriate after-tax discount rate. The fair value has been calculated using a model constructed for the Ministry of Education in 2003 which integrates students' educational and demographic information with data on loans and income that is held securely by Statistics New Zealand. The model is dependent on a number of assumptions on future income levels, repayment behaviour, in addition to economic assumptions (the discount rate, inflation and so on). As such, the estimated fair value is sensitive to changes in those underlying assumptions. The accuracy of the fair value determination is expected to continue to improve as the fair value model is further developed. The 2005 student loan scheme annual report will contain more information.
Notes to the Crown financial schedules
for the year ended 30 June 2005
Note 1: Direct taxation
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
|
Income tax |
|
|
|
Individuals: |
|
|
16,345,195 |
Source deductions |
17,781,481 |
|
4,027,308 |
Other persons |
4,103,286 |
|
(860,359) |
Other persons' refunds |
(876,284) |
|
410,324 |
Fringe benefit tax |
440,800 |
|
19,922,468 |
Sub-total individuals |
21,449,283 |
|
|
Companies: |
|
|
6,291,961 |
Gross company tax - other |
7,821,903 |
|
280,426 |
Gross company tax - state-owned enterprises |
311,120 |
|
1,515 |
Gross company tax - Crown entities |
2,080 |
|
120,523 |
Gross company tax - NZ Super fund |
211,200 |
|
(179,633) |
Refunds |
(232,287) |
|
6,514,792 |
Sub-total companies |
8,114,016 |
|
|
Withholding tax: |
|
|
1,187,845 |
Residents' interest |
1,500,792 |
|
48,984 |
Residents' dividends |
58,897 |
|
138,580 |
Foreign source dividends |
188,438 |
|
799,906 |
Non-residents' income |
926,728 |
|
563,024 |
Specified superannuation tax |
542,422 |
|
2,738,339 |
Sub-total withholding tax |
3,217,277 |
|
29,175,598 |
Total income tax |
32,780,576 |
|
|
Other direct taxation: |
|
|
2,348 |
Estate and gift duties |
2,325 |
|
2,348 |
Sub-total other direction taxation |
2,325 |
|
29,177,946 |
Total direct taxation |
32,782,901 |
Note 2: Indirect taxation
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
|
Goods and services tax: |
|
|
15,352,499 |
GST (Inland Revenue) |
16,018,263 |
|
(6,884,574) |
GST (refunds) |
(7,179,624) |
|
8,467,925 |
Sub-total GST |
8,838,639 |
|
|
Other indirect tax: |
|
|
8,883 |
Stamp and cheque duties |
9,234 |
|
46,766 |
Approved issuer levy |
55,947 |
|
295,325 |
Gaming duties |
315,902 |
|
1 |
Other indirect tax |
0 |
|
350,975 |
Sub-total other indirect taxation |
381,083 |
|
8,818,900 |
Total indirect taxation |
9,219,722 |
Note 3: Benefits and other unrequited expenses
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
|
Benefits and other unrequited expenses |
|
|
124,408 |
Child support payments |
136,121 |
|
818,803 |
Family support tax credit |
832,859 |
|
13,939 |
Family tax credit |
12,771 |
|
154,919 |
Child tax credit |
141,331 |
|
14,138 |
Parental tax credit |
13,909 |
|
63,624 |
Paid parental leave |
76,186 |
|
1,189,831 |
Total benefits and other unrequited expenses |
1,213,177 |
Note 4: Borrowing expenses
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
|
Borrowing expenses |
|
|
1,373 |
Income equalisation interest |
5,783 |
|
26 |
Adverse events income equalisation interest |
(11) |
|
1,399 |
Total borrowing expenses |
5,772 |
Note 5: Change in debt provision
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
|
Change in debt provisions |
|
|
41,221 |
General tax |
356,970 |
|
98,552 |
Student loans |
189,378 |
|
60,676 |
Child support |
119,907 |
|
200,449 |
Total change in debt provisions |
666,255 |
Note 6: Receivables and advances - current
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
562,696 |
Student loans, short-term |
587,920 |
|
(67,797) |
Student loan provision for doubtful debts |
(79,993) |
|
5,682,252 |
Tax receivables (general) |
5,898,241 |
|
(554,645) |
Provision for doubtful debts (general) |
(911,615) |
|
61,428 |
GST debtors (intra-Crown)* |
133,812 |
|
462,320 |
Receivables child support |
557,957 |
|
(408,478) |
Provision for doubtful debts child support |
(528,385) |
|
5,737,776 |
Total current receivables and advances |
5,657,937 |
* This balance is eliminated upon consolidation of the Crown accounts.
Note 7: Receivables and advances - non-current
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
5,402,959 |
Student loans, long-term |
6,086,654 |
|
(650,978) |
Student loan provision for doubtful debts |
(828,160) |
|
4,751,981 |
Total non-current receivables and advances |
5,258,494 |
Note 8: Payables and provisions
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
3,540,323 |
Student loan capital* |
4,550,631 |
|
7,730 |
Payables child support |
8,658 |
|
2,253,123 |
Taxes refundable |
2,656,389 |
|
5,801,176 |
Total payables and provisions |
7,215,678 |
* This balance is eliminated upon consolidation of the Crown accounts.
Note 9: Provision for doubtful debts
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
554,645 |
General tax provision* |
911,615 |
|
718,775 |
Student loan provision** |
908,153 |
|
408,478 |
Child support provision* |
528,385 |
|
1,681,898 |
Total provision for doubtful debts |
2,348,153 |
* Refer to note 6
** Refer to notes 6 and 7
General tax
A refined calculation methodology has been used since June 2003 to better reflect anticipated write-offs.
Student loans
The capital provision of 12.8% has been applied in the current year.
Government policy on student loans provides for the write-off of interest in certain circumstances, depending on study status and income levels. In 2005, a provision rate of 55% was applied against current year accrued interest. This provision rate can fluctuate from year to year depending on forecast repayment levels.
Child support
Unpaid child support contributions attract penalties which accrue to the Crown. A provision for the non-recovery of penalties owing is calculated based on the age of outstanding penalty debts.
Note 10: Contingent liabilities
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
436,089 |
Tax in dispute |
344,740 |
|
33,247 |
Unclaimed monies |
37,162 |
|
469,336 |
Total quantifiable contingent liabilities |
381,902 |
When a taxpayer disagrees with an assessment issued following the disputes process, the taxpayer may challenge that decision by filing proceedings with the Taxation Review Authority or the High Court.
Note 11: Income equalisation and adverse event income equalisation schemes - administered by Inland Revenue
| Actual 2004 $000 |
Actual 2005 $000 | |
|---|---|---|
|
213,309 |
Income equalisation reserve account |
166,805 |
|
202 |
Adverse event income equalisation reserve account |
84 |
|
213,511 |
Total value of the reserve accounts |
166,889 |
There are two schemes, the income equalisation scheme and the adverse event income equalisation scheme.
Income equalisation is a scheme where taxpayers in the farming, fishing and forestry industries can elect to make payments during the year by way of income equalisation deposits. Interest at a rate of 3% is paid, provided that no withdrawals are made within 12 months of the date of the deposit.
The adverse event income equalisation scheme operates in addition to the ordinary income equalisation scheme. Interest at a rate of 6.5% is paid on deposits. Deposits can be withdrawn immediately, but are transferred to the main income equalisation account if not withdrawn within 12 months of the deposit.
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Date published: 11 Oct 2005
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