Statement of Intent 2007-10: Part three - Our strategic direction
Optimise organisational efficiency and reduce compliance costs over time
We must make the most effective and efficient use of our resources in designing and delivering our services to meet Government and community expectations of value-for-money in the public sector.
In Part Two we showed how we have managed a growing workload with an annual budget that has not kept pace with this growth. We have continued to deliver the majority of our services within performance expectations and in a relatively efficient manner. The programme outlined under Measuring the impact of what we do in Part Two will help us to identify how effective and cost-effective we are in delivering our services.
There are a number of practical ways that we can improve our organisation efficiency through, for example, the use of technology.
Optimise organisational efficiency
We want to encourage voluntary compliance by offering customers services that are easy and cost-effective to use. We develop these services by understanding our customers' perspectives, and using our technology and technical capabilities. We are also developing our future workflows and processes to build a flexible and responsive organisation.
We are achieving this by looking for smarter ways to deliver our services, for example:
- providing easy-to-use and cost-effective electronic services to help reduce compliance costs for everyone
- working collaboratively with other agencies to deliver Government initiatives and achieve shared outcomes, sometimes through making greater use of organisational and shared capabilities.
Using information technology
Our information technology systems help us keep pace with the growth in our customer base and the changing expectations of our services.
In 2006, we updated our Information Technology Strategy, the blueprint for the next three to five years. It supports Inland Revenue's strategic direction and business strategies. The plan also covers our entire information technology environment, including applications, architecture, operations, governance and funding, and people and change management.
We are recognised as leaders in delivering online services, many of which were driven by our 2002 e-Enablement strategy. We will continue to introduce more cost-effective and efficient electronic services through our e-Business programme that we developed in 2006. We also recognise that there needs to be a significant shift in the number of customers using our electronic services to gain efficiencies from them.
Working with other government agencies
We are working with many other agencies to deliver Government initiatives and our outcomes.
These include:
- a number of agencies[20] advising government on tax law and other legislation that interacts with the tax system
- The Treasury, the Ministry of Economic Development and external providers in developing KiwiSaver
- the Ministry of Social Development (MSD) to deliver Working for Families Tax Credits, the Ministries of Education and Social Development (student loans) and the Department of Labour (paid parental leave).
The benefits of using an integrated cross-agency approach are:
- using a wider range of perspectives to create innovative solutions for improving service delivery
- making it easier for people to interact across government agencies
- generating cost efficiencies by reducing overlapping activities or functions
- coordinating the way we address issues that cross agency boundaries, for example, working with the Department of Labour, MSD, New Zealand Immigration Service and the Accident Compensation Corporation on seasonal labour issues.
We also work with private sector organisations that reach large numbers of our customers.[21] Through their networks, they influence and inform many customers about their obligations and entitlements.
Reduce compliance costs over time
Recent World Bank research[22] into the economies of 175 countries found that New Zealand was ranked:
- second in terms of overall ease of doing business (behind Singapore)
- tenth in the world in terms of ease of paying tax (this is ahead of Australia, Canada, the United Kingdom and United States).
Research and data from the OECD showed also that
New Zealand has:
- the third lowest tax wedge[23] in the OECD (ahead of Australia, Canada, the United Kingdom and United States)
- a tax burden consistent with other developed countries in the OECD.[24]
We have though, taken on more responsibilities (such as our social policy programmes) which has made our business more complex. We are working hard to reduce compliance costs in many areas of our business, for example:
- providing easy access to our information through our website
- making it more convenient to file returns and make payments online
- restructuring and rewriting the Tax Acts in clear, plain language to help reduce the compliance costs of people using the Acts
- working on the Government's Business Tax Review, which aims to make the tax system give better incentives for productivity and improved competitiveness, particularly with Australia.
We do recognise that some areas of our business carry compliance costs for our customers. It is a priority for us to develop ways of delivering convenient cost-effective services to help reduce these compliance costs over time.
We are:
- continuing to look for ways to introduce or enhance e-services as part of our e-Business programme to make it easier for our customers to interact with us and meet their obligations
- reducing reporting costs by adopting common reporting standards, such as Standard Business Reporting.[25]
20 The Treasury, the Ministries of Social Development, Education and Economic Development and the State Services Commission.
21 For example, the New Zealand Institute of Chartered Accountants that represents many tax agents and their individual clients and community-based organisations that provide assistance to their clients, such as Citizens' Advice Bureaus.
22 World Bank, Doing Business 2007 database, available at www.doingbusiness.org. Accessed: March 2007. The Doing Business indicators show the cost of doing business by identifying specific regulations that enhance or constrain business investment, productivity, and growth.
23 The tax wedge is the difference between total labour costs to the employer and the corresponding net take-home pay for single workers without children at average earning levels in 2006. OECD, Taxing Wages 2005/2006: 2006 Edition, February 2007.
24 OECD, Revenue Statistics 1965-2005, 2006 Edition, October 2006.
25 This provides a common language to communicate business and financial data, which provides major benefits in the preparation, analysis and communication of business information.
Date published: 23 Jun 2007
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