Financial schedules for administered accounts - Crown

Schedule of revenue - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual   2005 $000		Notes	Actual   2006 $000	Main Estimates 2006 $000	Supp Estimates 2006 $000
	Revenue
32,782,901	Direct taxation	1	37,380,782	33,892,000	35,547,000
9,219,722	Indirect taxation	2	9,451,760	9,651,000	9,305,000
42,002,623	Total taxation revenue		46,832,542	43,543,000	44,852,000
272,245	Compulsory fees,fines, penalties and levies (child support)		276,013	314,200	292,800
434,788	Investment income (student loans)		293,681	496,180	293,681
707,033	Total other revenue		569,694	810,380	586,481
42,709,656	Total operating revenue		47,402,236	44,353,380	45,438,481
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

 

Schedule of expenditure - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual   2005 $000		Notes	Actual   2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
1,077,056	Social assistance benefits	3	1,621,543	1,623,900	1,703,800
5,772	Finance costs (income equalisation interest scheme)	4	3,550	4,013	2,008
0	Initial fair value write-down and subsequent impairment	5	1,262,374	390,127	1,321,878
892,714	Change in doubtful debt and fair value write-down	5	76,320	0	210,681
1,975,542	Total expenditure		2,963,787	2,018,040	3,238,367
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

Schedule of assets - Crown as administered by Inland Revenue
as at 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
	Assets
	Current assets
2,050,064	Cash and bank balances		1,650,967	1,379,830	2,050,064
5,657,937	Receivables and advances(including student loans short-term)	6	8,425,369	5,756,323	5,651,621
7,708,001	Total current assets		10,076,336	7,136,153	7,701,685
	Non-current assets
5,258,494	Receivables and advances	7	4,608,711	5,871,065	4,467,584
5,258,494	Total non-current assets		4,608,711	5,871,065	4,467,584
12,966,495	Total assets		14,685,047	13,007,218	12,169,269
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

Schedule of liabilities - Crown as administered by Inland Revenue
as at 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
	Liabilities
	Current liabilities
7,215,678	Payables and provisions	8	3,497,433	7,829,775	2,665,047
166,889	Borrowings	11	143,035	249,823	127,503
7,382,567	Total current liabilities		3,640,468	8,079,598	2,792,550
7,382,567	Total liabilities		3,640,468	8,079,598	2,792,550
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

 

Schedule of movements between departments - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
40,734,114	Net result from Crown operating activities		44,451,629	42,337,771	42,200,114
5,854,900	Opening cash balance		5,583,928	5,349,765	5,583,928
	Asset transfer between departments –
0	Ministry of Social Development		5,196,232	0	5,233,624
(41,005,086)	Net payments to New Zealand Debt Management Office		(44,195,143)	(42,759,916)	(43,640,947)
5,583,928	Closing balance		11,036,646	4,927,620	9,376,719
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

 

Schedule of cash flows from operating activities - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
	Cash flows from operating activities
	Direct taxation
	Individuals:
17,834,327	Source deductions		19,186,916	18,653,000	19,180,000
4,639,964	Other persons		4,882,898	4,630,000	4,885,000
(1,364,576)	Other persons refunds		(1,503,299)	(1,452,000)	(1,550,000)
431,420	Fringe benefit tax		449,744	445,000	441,000
21,541,135	Sub-total individuals		23,016,259	22,276,000	22,956,000
	Companies:
8,861,256	Gross company tax – other		8,447,646	8,465,000	8,644,000
121,647	Gross company tax – state-owned enterprises		398,686	444,000	352,000
926	Gross company tax – Crown entities		64,244	52,000	67,000
50,441	Gross company tax – NZS fund		366,230	341,000	267,000
(735,220)	Company refunds		(832,575)	(826,000)	(740,000)
8,299,050	Sub-total companies		8,444,231	8,476,000	8,590,000
	Withholding tax:
1,497,733	Residents' interest		1,862,085	1,529,000	1,871,000
60,352	Residents' dividends		74,254	65,000	73,000
185,147	Foreign source dividends		157,268	182,000	210,000
949,069	Non-residents' income		1,093,140	813,000	1,007,000
545,852	Specified superannuation tax		709,808	577,000	660,000
3,238,153	Sub-total withholding tax		3,896,555	3,166,000	3,821,000
33,078,338	Total income tax		35,357,045	33,918,000	35,367,000
	Other direct taxation
2,310	Estate and gift duties		1,864	2,000	2,000
2,310	Sub-total other direct taxation		1,864	2,000	2,000
33,080,648	Total direct taxation		35,358,909	33,920,000	35,369,000
	Indirect taxation
	Goods and services tax:
15,358,541	Gross goods and services tax (Inland Revenue)		16,246,717	16,122,000	16,192,000
(6,717,819)	Goods and services tax (refunds)		(7,215,003)	(6,861,000)	(7,280,000)
8,640,722	Sub-total goods and services tax		9,031,714	9,261,000	8,912,000
	Other indirect taxation
8,150	Stamp and cheque duties		7,679	8,000	8,000
58,046	Approved issuer levy		72,638	54,000	73,000
311,840	Gaming duties		284,721	328,000	312,000
10,379	Other indirect taxation		24,716	1,000	10,000
388,415	Sub-total other indirect taxation		389,754	391,000	403,000
9,029,137	Total indirect taxation		9,421,468	9,652,000	9,315,000
42,109,785	Total taxation receipts		44,780,377	43,572,000	44,684,000
	Other receipts:
176,992	Compulsory fees, fines and penalties (child support)		194,870	191,200	191,800
258,820	Interest from investment (student loan)		179,854	252,806	260,274
(3)	Other operating receipts (ACC)		(106)	0	0
435,809	Total other receipts		374,618	444,006	452,074
42,545,594	Total cash inflow/(outflow) from operating activities		45,154,995	44,016,006	45,136,074
	Cash disbursed to:
0	Finance cost		0	(4,013)	(2,008)
(1,069,374)	Family assistance tax credits		(1,638,065)	(1,624,900)	(1,703,800)
(1,069,374)	Total cash disbursed to operations		(1,638,065)	(1,628,913)	(1,705,808)
41,476,220	Net cash inflow/(outflow) from operating activities		43,516,930	42,387,093	43,430,266
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

 

Schedule of cash flows from investing activities - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
	Cash flows from investing activities
	Cash was provided from:
251,494	Repayment of advances (student loan capital)		306,519	335,113	250,067
251,494	Net cash inflow/(outflow) from investing activities		306,519	335,113	250,067
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

Schedule of cash flows from financing activities - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
	Cash flows from financing activities
	Cash was provided from:
50,404	Income equalisation scheme		53,207	155,658	69,614
50,404	Total cash provided		53,207	155,658	69,614
	Cash was disbursed to:
(102,798)	Repayment of income equalisation		(80,610)	(117,950)	(109,000)
(102,798)	Total cash disbursed		(80,610)	(117,950)	(109,000)
(52,394)	Net cash inflow/(outflow) from financing activities		(27,403)	37,708	(39,386)
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

 

 

Schedule of the combined cash flows - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
41,476,220	Net cash inflow/(outflow) from operating activities		43,516,930	42,387,093	43,430,266
251,494	Net cash inflow/(outflow) from investing activities		306,519	335,113	250,067
(52,394)	Net cash inflow/(outflow) from financing activities		(27,403)	37,708	(39,386)
41,675,320	Closing balance		43,796,046	42,759,914	43,640,947
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

 

Schedule of cash flow movements - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
41,675,320	Net movement in cash		43,796,046	42,759,914	43,640,947
1,379,830	Opening cash balance		2,050,064	1,379,830	2,050,064
11,261,499	Disbursements from New Zealand Debt Management Office		1,734,711	11,822,463	12,354,608
(52,266,585)	Disbursements to New Zealand Debt Management Office		(45,929,854)	(54,582,379)	(55,995,555
2,050,064	Closing balance		1,650,967	1,379,828	2,050,064
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

Schedule of net result to operating cash flows - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
40,734,114	Net result from Crown operations		44,451,629	42,337,771	42,200,114
	Movement in working capital
(25,224)	(Increase)/decrease student loan short-term		32,587	(77,492)	(1)
489,073	(Increase)/decrease provision bad debts		182,304	55,934	275,317
(215,989)	(Increase)/decrease tax receivables (general tax)		(2,926,481)	28,000	(168,000)
(72,384)	(Increase)/decrease GST debtors		31,106	0	0
(95,637)	(Increase)/decrease receivables (child support)		(86,948)	(123,000)	(101,000)
1,010,308	Increase/(decrease) payables (student loans)		645,601	1,032,118	682,993
928	Increase/(decrease) payables (others)		9,484	0	0
403,266	Increase/(decrease) tax refundable		822,902	0	0
1,494,341	Total working capital movements		(1,289,445)	915,560	689,309
	Other non-cash items
(245,722)	Other non-cash items (student loan capital)		(302,966)	(335,115)	(250,067)
(506,513)	Student loans long-term		657,712	(531,123)	790,910
(752,235)	Total other non-cash items		354,746	(866,238)	540,843
41,476,220	Net cash inflow/(outflow) from operating activities		43,516,930	42,387,093	43,430,266
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

Schedule of contingent liabilities - Crown as administered by Inland Revenue
as at 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
	Contingent liabilities
381,902	Contingent liabilities	10	820,303	380,000	380,000
381,902	Total quantifiable contingent liabilities		820,303	380,000	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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

Schedule of accident compensation collections - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
	Accident compensation collection type
(3)	Residual claims levy and earners' levy (self-employed)*		(10)	0	0
739,527	Earner premium (employees - provisional)		873,615	785,800	819,900
739,524	Total accident compensation collection		873,605	785,800	819,900
* For the 1999 return period, Inland Revenue started collecting residual claims and earners' levies, instead of the ACC premiums. From 1 April 2002, ACC took over the responsibility for 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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

 

Schedule of student loan movements - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
	Analysis of student loans portfolio:
	Nominal loan balance		7,472,711		7,351,611
	Adjustment to fair value		(2,494,645)		(2,440,735)
	Total student loans balance		4,978,066		4,910,876
	Movement during the year:
	Opening balance		5,766,421		5,766,421
	Initial fair value write-down and subsequent impairment		(1,249,551)		(1,303,796)
	Loans transferred from MSD to Inland Revenue		966,468		962,000
	Fair value write-down on new borrowings transferred		(320,867)		(279,007)
	Capital repayment		(306,519)		(250,067)
	Interest repayment		(179,854)		(260,274)
	Other impairments		(12,823)		(18,082)
	Interest unwind		314,791		293,681
	Closing student loans balance		4,978,066		4,910,876
	Analysis of student loans
	Outstanding balances:
6,674,574	Total outstanding loans (capital and interest)			7,333,556
(908,153)	Total provisions (capital and interest)			(876,096)
5,766,421	Total student loans			6,457,460
5,246,880	Opening balance			5,856,235
1,010,308	Amount advanced in current year			1,032,118
434,788	Interest accrued on outstanding loan balances			496,180
(251,494)	Repayment of base capital			(335,115)
(258,820)	Repayment of accrued interest			(252,806)
(226,459)	Small balances and interest written-off			(259,963)
(189,379)	Movement in provision			(79,189)
597	Other			0
5,766,421	Closing balance			6,457,460
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 year, reference should be made to the consolidated audited Crown financial statements for the year ended 30 June 2006.

Student loans

Student loans are recognised initially at fair value plus transaction costs and subsequently measured at amortised cost using the effective interest rate, less any impairment loss. The effective interest rate discounts estimated future cash flows through the expected life of the loan to the net carrying amount of the loan, excluding future credit losses. Interest is recognised on the loan evenly in proportion to the amount outstanding over the period to repayment.

Allowances for estimated irrecoverable amounts are recognised when there is objective evidence that the loan is impaired. Impairment losses are incurred if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the loan, and that a "loss" event (or events) has an impact on the estimated future cash flows of the student loan book that can be reliably measured.

The student loans balance reflects the change in accounting policy which requires student loans to be initially recorded at fair value and subsequently reported at amortised cost (refer to "Changes in accounting policy" on page 122). Prior year comparatives and the Main Estimates have not been restated for the fair value change.

Student loans book value

Student loans are recognised initially at fair value plus transaction costs and subsequently measured at amortised cost using the effective interest rate method, less any impairment loss.

Fair value is the amount for which the loans could be exchanged between knowledgeable, willing parties in an arms-length transaction. Fair value on initial recognition of student loans is determined by projecting forward the expected cash flows to a willing buyer and discounting them back at an appropriate discount rate.

Inland Revenue and the Ministry of Social Development have adapted the Ministry of Education's valuation model to be compliant with International Accounting Standards and to reflect the recently introduced student loans interest-free, amnesty and voluntary repayments legislation.

As student loans are subsequently measured at amortised cost, the model projects all future cash flows to the Crown associated with the loan and calculates the effective interest rate at initial recognition. This is used to spread the Crown's interest income across the life of the loan and determines the loan's book value at each reporting date. If the timing of future receipts is revised, the book amount at reporting date is adjusted to reflect the revised estimated cash flows at the loan's original effective interest rate. The adjustment is recognised as income or expense in the Statement of Financial Performance.

The Model's substantive information has remained consistent with previous years, incorporating educational, demographic, income and loan. As such, the fair value is sensitive to changes on a number of underlying assumptions, including future income levels, repayment behaviour and macro economic factors such as inflation and the discount rate.

The significant assumptions are as follows:

 

Assumptions	30 June 2006	30 June 2005
Weighted average effective interest rate	6.63%	Not applicable
Interest rate applied to loans for overseas borrowers	6.9% (6.7% out-years)	7.0% (6.8% out-years)
Cost of administration as a percentage of the average outstanding loan balance	0.15%	0.20%
CPI	3.2%	2.8%
Future salary inflation	3.6%	3.4%

 

Schedule of trust monies - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Contribution 2006 $000	Distribution 2006 $000
	Child support monies:
10,107	Child support		9,059	149,455	(150,503)
129	Child support - reciprocal agreements		178	6,397	(6,349)
10,236	Total		9,237	155,852	(156,852)
This trust account was established in accordance with sections 67, 68 and 139 of the Child Support Act 1991.
Inland Revenue administers this trust account for amounts collected for non-custodial parents and the subsequent child support payments that are paid to the custodial parents.

 

Schedule of appropriations - Crown as administered by Inland Revenue
for the year ended 30 June 2006

Actual 2005 $000		Notes	Actual 2006 $000	Main estimates 2006 $000	Supp estimates 2006 $000
	Benefits and other unrequited expenses
136,121	Child support payments		150,927	150,000	149,000
832,859	Family support tax credit		1,280,349	1,298,000	1,350,000
12,771	Family tax credit		4,944	14,000	5,000
141,331	Child tax credit		153,998	141,000	154,000
13,909	Parental tax credit		15,895	16,000	16,000
0	In-work payment		70,003	57,000	80,000
76,186	Paid parental leave payments		96,354	97,900	98,800
1,213,177	Total benefits and other unrequited expenses		1,772,470	1,773,900	1,852,800
	Borrowing expenses
5,783	Income equalisation interest		3,551	4,000	2,000
(11)	Adverse event interest		(1)	13	1
0	Environmental restoration account interest		0	0	7
5,772	Total borrowing expenses		3,550	4,013	2,008
	Other expenses to be incurred by the Crown
232,287	Companies refunds		0	0	0
7,179,624	Goods and services tax refunds		0	0	0
876,284	Other persons refunds		0	0	0
739,527	ACC earner premium		0	0	0
630	Unclaimed monies		0	0	0
356,970	General tax doubtful debt provision		(12,229)	80,398	119,646
189,378	Student loan interest write-offs and student loans doubtful debt provision		0	339,152	0
119,907	Child support doubtful debt provision		88,549	(29,423)	91,035
0	Other impairments		12,823	0	18,082
0	Initial fair value write-down and subsequent impairment	12	1,414,686*	0	1,479,435*
9,694,607	Total other expenses		1,503,829	390,127	1,708,198
10,913,554	Total expenditure and appropriations		3,279,849	2,168,040	3,563,006
The accompanying accounting policies form part of these financial schedules.
* Student loan fair value write-down represents both Inland Revenue and Ministry of Social Development appropriations.

 

Revenue type	Revenue recognition point
Source deductions (PAYE)	When an individual earns income that is subject to PAYE
Resident withholding tax*	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**	Provisional tax is recognised in the period which it is earned
Terminal tax**	Assessment filed date
Goods and services tax	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
*  Corresponds to withholding taxes on residents' interest and dividends.
** Provisional and terminal taxes are paid by "other persons" and companies.

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