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 2008 (GST-exclusive) $000
Revenue	Expenses	Net surplus/ (deficit)
242,843	240,419	2,424

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
	2006-07 Actual	2007-08 Target	2007-08 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	90.0%	88%	91.0%
at least 80% of customers who have contacted us are satisfied with the quality of the service we provide	82.0%	80%	79.6%
at least 97% of customers are satisfied with the quality of advisory services we provide	-	97%	96.0%
at least 85% of all initial telephone enquiries are fully resolved at the time, requiring no follow-up action.	77.8%	85%	77.5%^[1]
By making people aware of their obligations and the services available to help them comply, this output contributes to customers filing and paying on time. We will ensure that:
the number of new debt cases is less than 525,000	490,767	<525,000	551,651^[2]
at least 80% of returns are finalised within 15 days of due date	78.0%	80%	77.5%
at least 90% of resident student loan borrowers meet their repayment obligations	-	90%	85.2%^[3]
at least 75% of student loan repayments due are collected.	-	75%	85.3%
We will contribute to accurate Working for Families Tax Credits regular payments by ensuring that at least 70% of Working for Families Tax Credits recipients who receive a weekly or fortnightly payment are not overpaid.	-	70%	73.0%
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 2007-08. See figure 24.	87.7%	85%	89.4%
We will answer telephone enquiries on average within:
30 seconds for priority calls	-	0:30 minutes	1:05 minutes^[4]
2 minutes for all other calls	-	2:00 minutes	3:04 minutes^[5]
and 6 minutes in periods of very high demand (ie, days when total calls exceed 20,000).	-	6:00 minutes	4:40 minutes

¹ This result is similar to the 77.8% result last year. Performance in the first three quarters was significantly better than last year. However, high call volumes in the fourth quarter caused a 7% drop in first call resolution compared to the same period last year. Increased average handling times have also impacted on first call resolution. We are asking our customers more questions through the customer satisfaction survey to deepen our understanding of first call resolution.

² This result is slightly more than 5% over the performance standard. The higher than expected number of new debt cases reflects a business decision to divert resources to answering telephones, and changes in the current economic environment.

³ This year, we improved the methodology for measuring this performance standard. This result, while more accurate than in previous years, is also lower than expected.

⁴ On a normalised basis we answered almost twice as many priority calls as last year. The increased call volumes were related to KiwiSaver and issues with information sent to customers outside planned times, causing unexpected calls.

⁵ Our focus on answering priority calls caused a reduction in performance in answering general services calls. Performance was also impacted by high demand from 8am-10am and 5pm-8pm, although we have seen some benefit from increasing the number of people available to talk with our customers during these periods. Average handling times have also increased because we are receiving more complex calls. We are continuing to invest in our telephony environment and will be implementing initiatives in 2008-09 to improve our telephone services.

Figure 24 -
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	2,256,147	407,309	215,065	131,050	75,567	46,385	33,113	21,102	35,232
% total	70%	83%	89%	93%	96%	97%	98%	99%	100%

Activity forecasts
	Forecast	Actual
We expect to answer an estimated 18.17 to 20.52 million specific customer contacts, including 927,000 to 1,024,000 child support contacts. This is based on an expected:	18.17-20.52 million	16.34 million^[6]
3.99 to 4.41 million correspondence contacts, including 113,000 to 124,000 child support correspondence contacts	3.99-4.41 million	3.22 million
338,000 to 374,000 counter enquiries, including 16,150 to 17,850 child support counter enquiries	338,000-374,000	233,080
5.62 to 6.22 million telephone calls, including 665,000 to 735,000 child support telephone enquiries	5.62-6.22 million	4.47 million
209,000 to 231,000 telephone call referrals	209,000-231,000	198,488
8.01 to 9.29 million self-help service enquiries, including 133,000 to 147,000 child support self-help service enquiries.	8.01-9.29 million	8.22 million
We will complete between 152,000 and 168,000 hours of advisory services.	152,000-168,000	157,090

⁶ The variance is mainly because KiwiSaver contacts were 45% below forecast. This was the first year of KiwiSaver and as no historical data was available we estimated forecast contacts.

Child support performance - Information Services
Performance measures	2006-07 Actual	2007-08 Target	2007-08 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 88% in this area.	87.6%	88%	88.0%
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 25.	90.7%	85%	86.9%
We will answer telephone enquiries on average within 2 minutes.	1:03 minutes	2:00 minutes	0:53 minutes

Activity forecast	Forecast	Actual
We expect to answer an estimated 927,000 to 1,024,000 child support contacts. This is based on an expected:	927,000-1,024,000	825,252^[7]
113,000 to 124,000 correspondence contacts	113,000-124,000	102,340
16,150 to 17,850 counter enquiries	16,150-17,850	15,341
665,000 to 735,000 telephone enquiries	665,000-735,000	590,406
133,000 to 147,000 self-help service enquiries.	133,000-147,000	117,165

⁷ Telephone calls, self-help and correspondence volumes were lower than forecast. We changed the annual assessment process, which we assumed would cause an increase in telephone calls. However, this expected increase did not happen.

Figure 25 -
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	71,412	17,645	6,014	2,742	1,188	682	483	365	1,626
% total	70%	87%	93%	96%	97%	98%	98%	98%	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 (or other formal communication of conclusions) to the parties concerned
issuing, where required, an assessment consistent with the conclusions of the technical review.

Performance measures
	2006-07 Actual	2007-08 Target	2007-08 Actual
Quality
We will ensure that all adjudication reports supporting each decision meet the purpose, logic and alternatives standards.	Achieved	Achieved	Achieved
Timeliness
We will complete at least:
80% high complexity adjudication cases within 20 weeks of allocation	20%	80%	62.5%^[8]
80% of medium complexity cases within 14 weeks	77%	80%	87.9%
80% of low complexity cases within 8 weeks.	88%	80%	91.7%

⁸ This result is an improvement from 20% in 2006-07. Of the three cases that failed the standard, one failed by one day and the other two were among the most technically complex we have completed.

Activity forecast
	Budget	Actual
We expect to complete an estimated 50-70 adjudication cases	50-70	66

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, (eg, 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, eg, interpretation statements and interpretation guidelines
considering applications for and providing taxpayer-specific depreciation determinations
preparing and publishing depreciation and other determinations (eg, livestock valuations)
considering and responding to technical correspondence.

Performance measures
	2006-07 Actual	2007-08 Target	2007-08 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	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	Achieved
We will ensure that all technical correspondence is correct, complete and clear.	Achieved	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	0%	80%	62.5%^[9]
80% of medium complexity items within 12 weeks	59%	80%	70.6%^[10]
80% of low complexity items within 6 weeks	22%	80%	100%
of receipt of all information necessary and the applicant accepting the cost estimate, excluding elapsed time waiting for applicant responses where it is not possible to progress an application.
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.	100%	90%	100%

⁹ This result is a significant improvement from 0% in 2006-07. Five of the eight projects completed this year met the standard. Two of the three projects that failed the standard were started in the previous year.

¹⁰ This result is a significant improvement from 59% last year. 36 projects achieved the standard compared to 17 last year. With additional staffing and recent improvements to systems associated with measuring the standard we expect performance to improve again next year.

Activity forecast
	Forecast	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	521^[11]
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

¹¹ A number of issues contributed to this result being below forecast. These included a drop in the number of issues per ruling and delays in applicants responding to our enquiries, preventing us from finalising projects.

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

for the year ended 30 June 2008
2006-07 Actual $000		2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Final voted $000
	Revenue
186,655	Crown	240,350	212,885	240,350
2,419	Other	2,493	3,071	3,086
189,074	Total revenue	242,843	215,956	243,436
	Expenses
190,091	Annual appropriations	240,419	215,956	243,436
-	Other appropriations	-	-	-
190,091	Total expenses	240,419	215,956	243,436
(1,017)	Net surplus/(deficit)	2,424	-	-