Output expense 2

Services to inform the public about entitlements and meeting obligations

Description

This output expense provides services that help taxpayers and other customers to meet their payment obligations of their own accord and to receive payments they are entitled to. This is achieved through a range of proactive and reactive services to make people aware of their entitlements and obligations, and the services available to help them comply. This output expense also contributes to confidence in the tax administration system through managing individual customer complaints quickly, fairly and in confidence.

Activities undertaken:

providing information to taxpayers on the application of the tax laws
responding to enquiries from taxpayers and social support programme customers
providing assistance to the public, businesses and tax agents
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.

Financial performance for the year ended 30 June 2007 (GST-exclusive) $000
Revenue	Expenses	Net surplus/ (deficit)
189,074	190,091	(1,017)

Output 2.1 Information services

Description

This output involves responding to customer enquiries on tax and social support programmes (including child support) through electronic channels, correspondence, telephone, personal appointments, actively providing advice through a range of communication approaches delivered in the community and through the Complaints Management Service.

Performance measures
	Budget	Actual
Quality
We will ensure that:
customers are given an answer that is correct, complete, clear, timely and appropriately referenced, that also shows an understanding of their environment. We will achieve performance of at least 85% in this area.	85%	90.0%
at least 80% of customers who have contacted us are satisfied with the quality of the service we provide	80%	82.0%
at least 97% of customers are satisfied with the quality of advisory services we provide	97%	95.0%
at least 85% of all initial telephone enquiries are fully resolved at the time, requiring no follow-up action.	85%	77.8%^[1]
By making people aware of their obligations and the services available to help them comply this output contributes to customers filing returns and paying on time. We will ensure that:^[2]
the number of new debt cases is less than 535,000	< 535,000	490,767
at least 80% of returns are finalised within 15 days of due date	80%	78.0%
at least 90% of resident student loan borrowers meet their repayment obligations	90%	89.5%
at least 75% of student loan repayments due are collected.	75%	87.7%
We will contribute to accurate Family Assistance regular payments by ensuring that at least 70% of recipients who receive a weekly or fortnightly payment are not overpaid.	70%	85.3%
Timeliness
We will respond to customer enquiries within the following timeframes:
We will respond to at least 85% of correspondence within 3 weeks of receipt. We will also report the response time for all correspondence received during 2006-07. See figure 33.	85%	87.7%
We will answer telephone enquiries on average within:
30 seconds for priority calls	0:30 minutes	1:16 minutes^[3]
2 minutes for all other calls	2:00 minutes	2:16 minutes^[4]
and 6 minutes in periods of very high demand (i.e. days when total calls exceed 20,000).	6:00 minutes	4:20 minutes

¹ Performance has improved from 77.3% last year. While this is a slight improvement over last year, we have seen progression over the quarters. For example, the fourth quarter result of 81.3% was within 5% of the performance standard. This is a substantial improvement on previous quarters and we continue to implement measures to improve performance.

² The four quality measures below, together with the debt and returns measures in output 5.1 and 5.2, provide a consolidated picture of our compliance performance.

³ This result is a significant improvement from 1:47 minutes last year. Our first quarter performance was affected by difficulties in managing priorities in our new telephone environment, increase of average handling times by 28 seconds and our ability to staff evenings and weekend shifts. Performance in the last three quarters of the year improved significantly compared to 2005-06. These improvements could not recover the first quarter results.

⁴ Though we didn't achieve the standard, there was an improvement of 53 seconds or 28% on last year's results. To provide further context, total talk time across both general and priority queues were up 9% compared to last year. Overall performance was reduced in the fourth quarter, where we experienced 15 days with call volumes between 19,000 and 20,000 calls accepted. These volumes put pressure on our ability to respond within 2:00 minutes.

Figure 33 – Response time for all correspondence
Response time	1 week	2 weeks	3 weeks	4 weeks	5 weeks	6 weeks	7 weeks	8 weeks	> 8 weeks
Volume	1,055,376	342,303	163,007	102,839	55,905	27,463	13,971	8,141	15,588
% total	59%	78%	87%	93%	96%	98%	99%	99%	100%

Activity forecasts (demand driven)
	Budget	Actual
We expect to answer an estimated 11.81 to 13.88 million specific customer contacts, including 885,000 to 935,000 child support contacts. This is based on an expected:	11.81-13.88 million	12.92 million
1.75 to 1.93 million correspondence contacts, including 111,000 to 118,000 child support correspondence contacts	1.75-1.93 million	1.81 million
212,000 to 233,000 counter enquiries, including 16,000 to 17,000 child support counter enquiries	212,000-233,000	218,726
5.72 to 6.30 million telephone enquiries, including 609,000 to 643,000 child support telephone enquiries	5.72-6.30 million	4.90 million^[5]
4.12 to 5.42 million self-help service enquiries, including 149,000 to 157,000 child support self help service enquiries (this estimate includes electronic enquiries which have not been reported in previous years).	4.12-5.42 million	5.99 million^[6]
We will complete between 124,000 and 138,000 hours of advisory services.	124,000-138,000	145,577^[7]

⁵ The forecast for phone contacts included an allowance for KiwiSaver contacts, which was due to start on 1 April 2007. The start of KiwiSaver was postponed until 1 July 2007 and consequently KiwiSaver calls were below forecast.

⁶ We have only been reporting on website contacts (electronic enquiries) for a short time and underestimated the high growth in uptake of web-based contacts.

⁷ As a result of a new operating model more people than forecast were available for advisory work. Hours spent on KiwiSaver educational work were also higher than forecast.

Child support performance – Information Services
Performance measures	Budget	Actual
We will ensure that customers are given an answer that is correct, complete, clear, timely and appropriately referenced, that also shows an understanding of their environment. We will achieve performance of at least 85% in this area.	85%	87.6%
We will respond to at least 85% of correspondence within 3 weeks of receipt. We will also report the response time for all correspondence received during 2006-07. See figure 34	85%	90.7%
We will answer telephone enquiries on average within 2 minutes.	2:00 minutes	1:03 minutes
Activity forecast	Budget	Actual
We expect to answer an estimated 885,000 to 935,000 child support contacts. This is based on an expected:	885,000-935,000	914,945
111,000 to 118,000 correspondence contacts	111,000-118,000	119,538
16,000 to 17,000 counter enquiries	16,000-17,000	15,607
609,000 to 643,000 telephone enquiries	609,000-643,000	664,289
149,000 to 157,000 self help service enquiries (this estimate includes electronic enquiries which have not been reported in previous years).	149,000-157,000	115,511

Figure 34 – Response time for all child support correspondence
Response time	1 week	2 weeks	3 weeks	4 weeks	5 weeks	6 weeks	7 weeks	8 weeks	> 8 weeks
Volume	86,128	21,723	5,629	2,181	901	639	433	324	1,579
% total	72%	90%	95%	97%	98%	98%	98%	99%	100%

Output 2.2 Adjudication

Description

This output involves:

providing a technical review of existing taxation disputes referred to the Adjudication Unit
issuing an adjudication report to the parties concerned
issuing, where required, an assessment consistent with the conclusions of the technical review.

Performance measures

	Budget	Actual
Quality
We will ensure that all adjudication reports supporting each decision meet the purpose, logic and alternatives standards.	Achieved	Achieved
Timeliness
We will complete at least 80% of:
high complexity adjudication cases within 20 weeks of allocation	80%	20%^[8]
medium complexity cases within 14 weeks	80%	77%
low complexity cases within 8 weeks.	80%	88%

⁸ This year we completed action on five cases. Of the four cases that did not meet the standard, two were one day outside the target. However, the average time to complete cases is 26 weeks.

Activity forecast (demand driven)
	Budget	Actual
We expect to complete an estimated 50-70 adjudication cases	50-70	83^[9]

⁹ There has been an increase in demand during the year. As a result we have also completed more cases than originally forecast.

Output 2.3 Rulings

Description

This output covers:

Taxpayer Rulings

considering applications for and providing binding private and product rulings, and statutory determinations
preparing statutory determinations and valuations, for example taxpayer-specific accruals.

Public Rulings

preparing and issuing binding public rulings
developing and publishing non-binding statements on the Commissioner's view of the law administered by Inland Revenue, for example interpretation statements and guidelines
considering applications for and providing taxpayer-specific depreciation determinations
preparing and publishing depreciation determinations and valuations, for example livestock valuations
considering and responding to technical correspondence.

Performance measures

	Budget	Actual
Quality
We will ensure that all reports supporting the decision to issue, or decline to issue, a private or product binding ruling or determination (and any letter setting out the reasons for these decisions), meet the purpose, logic, alternatives and practicality standards.	Achieved	Achieved
We will ensure that all public items giving the Commissioner's view of the law meet the purpose, logic, alternatives, consultation and practicality standards.	Achieved	Achieved
We will ensure that all technical correspondence is correct, complete and clear.	Achieved	Achieved
Timeliness
We will deliver at least 80% of:
high complexity draft private and product binding rulings and draft taxpayer specific statutory determinations within 5 months	80%	0%^[10]
medium complexity items within 12 weeks	80%	59%^[11]
low complexity items within 6 weeks	80%	22%^[12]
of receipt of all information necessary and the applicant accepting the cost estimate.
We will complete 90% of taxpayer specific statutory determinations within 6 months of receipt of all information necessary and the applicant accepting the cost estimate.	90%	100%

¹⁰ We completed four high complexity rulings this year. All of the cases were long standing projects started during 2005-06. Another factor contributing to this delay was the uncertainty regarding whether the Commissioner could rule for some projects.

^{11 and 12} A number of factors contributed to the time required to complete rulings this year. These included delays in applicants responding to our enquiries and staffing issues. We are reviewing our processes and practices to improve our timeliness in completing projects.

Activity forecast (demand driven)

	Budget	Actual
We expect to:
finalise the Commissioner's ruling for an estimated 700 to 1,100 technical issues contained in applications for private and product binding rulings and accrual determinations	700-1,100	448^[13]
publish or finalise consideration of an expected 30 to 50 public items (including technical correspondence and provisional and taxpayer specific depreciation determinations), giving the Commissioner's interpretation of the law.	30-50	39

¹³ A number of issues contributed to this result being below forecast. They included a drop in the number of issues per ruling, delays in applicants responding to our enquiries, and uncertainty over whether the Commissioner could rule for some projects.

Output statement: Services to inform the public about entitlements and meeting obligations

for the year ended 30 June 2007
2005/06 Actual $000		2006/07 Actual $000	2006/07 Main Estimates $000	2006/07 Final voted $000
	Revenue
132,820	Crown	186,655	156,500	187,720
2,155	Other	2,419	2,135	2,795
134,975	Total Revenue	189,074	158,635	190,515
	Expenses
131,628	Annual appropriations	190,091	158,635	190,515
-	Other appropriations	-	-	-
131,628	Total expenses	190,091	158,635	190,515
3,347	Net surplus/(deficit)	(1,017)	-	-
124,473	Output 2.1 Information Services	181,923	150,216	180,404
1,837	Output 2.2 Adjudication	2,394	2,264	2,719
5,318	Output 2.3 Rulings	5,774	6,155	7,392
131,628	Output expense cost	190,091	158,635	190,515