This appropriation covers the design and implementation of a modern system for tax revenue and social policy administered by Inland Revenue.
We achieved 1 out 1 performance measures.
This appropriation is intended to design and implement a modern system for tax revenue and social policy administered by Inland Revenue that meets Government priorities and responds to customers' changing expectations. This will lead to the more efficient collection of taxes and distribution of entitlements. It will also have wider benefits for Aotearoa New Zealand, including reduced compliance and operating costs, as well as more agile delivery of policy changes in the future.
This year, we finished our multi-year programme to transform tax and social policy payments. Transformation was delivered on time and under budget - we handed back more money this year as part of Budget 2022 and closed the programme as planned on 30 June 2022.
In October 2021, we moved child support into our new system and upgraded the online services all our customers use, to make it easier for customers to keep track of their obligations and payments. Read more about these changes.
| Peformance measure | 2021-22 milestone | 2021-22 actual |
|---|---|---|
| Child Support is administered in START | 30 June 2022 | Achieved |
All targets are unaudited.
| Actual 2021 ($000) | Actual 2022 ($000) | Unaudited revised budget 2022 ($000) | Unaudited budget 2022 ($000) | Unaudited forecast 2023[1] ($000) | |
|---|---|---|---|---|---|
| Revenue | |||||
| $130,000 | Revenue from the Crown | $113,510 | $113,510 | $316,752 | n/a |
| $166 | Other revenue | $180 | n/a | n/a | n/a |
| $130,166 | Total revenue | $113,690 | $113,510 | $316,752 | n/a |
| $128,630 | Total expenses | $96,944 | $113,510 | $316,752 | n/a |
| $1,536 | Net surplus or (deficit) | $16,746 | n/a | n/a | n/a |
1 Due to the substantive completion of our transformation programme and the closure of this appropriation as at 30 June 2022, the Unaudited forecast for 2023 is nil. An amount of $24 million funding has been transferred from the 2021-22 financial year to the new 'Residual activities following the transformation programme's substantive closure' appropriation for the 2022-23 financial year.
We use several indicators to measure the outcomes of the transformation programme investment as detailed in the table below. Read more about previous years' results in 'Business Transformation: Implementing a Digital Revenue System – Final Programme Business Case Addendum'.
This year, we achieved 7 out of the 10 indicators for which there are quantitative measures. The measures achieved relate to digital uptake, system availability, system resilience, additional Crown revenue and administrative savings.
The measures not achieved were the following.
- The percentage of customers who find it easy to comply decreased by 1 percentage point, from 82% in 2020-21 to 81% this year. This measure is proving difficult to shift as it measures customer perceptions, which presents some challenges in the current environment.
- The reduction in compliance effort for small-to-medium-sized enterprises (SMEs) was not achieved. SMEs reported saving 5 hours compared to a target of 15 hours. The value of the time saved by SMEs is also behind target. These are indicative results based on 2021 survey results. It appears that COVID-19 and payday filing are having an impact. We continue to focus on designing our services to reduce effort for SMEs.
- We recognise that achieving the targets in these areas by 2023-24 will be challenging, and that an ongoing focus on reducing effort will be required.
The transformation programme closed on 30 June 2022, but we will continue to track and report against its benefit commitments until 2023-24.
| Indicator | 2020-21 | 2021-22 target | 2021-22 actual | 2022-23 target |
|---|---|---|---|---|
| Easier for customers | ||||
| Digital uptake by customers | 98% | 78% | 99% (achieved) | n/a |
| Customers who find it easy to comply | 82% | 89% | 81% (not achieved) | 90% |
| Reduction in compliance time for SME customers | 5 hours | 15 hours | 5 hours indicative[1] (not achieved) | 17 hours |
| System availability for customer facing e-channels | 99.6% | 99.4% | 99.6% (achieved) | 99.5% |
| Customer outcomes from information sharing and security of information | Read the case studies on how we've supported other agencies to administer other COVID-19 support and changes to the KiwiSaver default scheme in the link below. | |||
| Cumulative reduction in compliance costs for SME customers | $640 million | $820 million | $790 million indicative (not achieved) | $1,070 million |
| Cumulative additional Crown revenue to the Government | $570 million achieved) | $1,110 million | Target achieved[2] | $1,860 million |
| Reduce time and cost to implement policy | ||||
| Reduction in the time and cost to implement policy | Read a case study on the quick delivery of COVID-19 Support payments schemes in the link below. | |||
| Increased revenue system resilience as assessed by Inland revenue | Substantially achieved | High | High (achieved) | High |
| Inland Revenue is more efficient | ||||
| Digital uptake by customers | 98% | 78% | 99% (achieved) | 82% |
| Annual reduction in Inland Revenue's administration costs | $87 million | $100 million | $105 million (achieved) | $100 million |
| Cumulative reduction in Inland Revenue's administration costs | $205 million | $295 million | $309 million (achieved) | $395 million |
1 Inland Revenue will run the SME compliance cost survey again in 2023. The 2020-21 survey has been used as an indicative result.
2 Achievement of additional Crown revenue is measured through case studies and proxy measures, given the difficulty of direct attribution.