The benefits of having policy and administration together in one department were evident this year in how we worked at pace and with key public sector and private sector partners to deliver the new Government’s priorities.
This year, IR took part in a Performance Improvement Review pilot run by the Public Service Commission Te Kawa Mataaho, which you can read about on the page below. One of the capabilities assessed by reviewers was how we respond to Government priorities. Reviewers rated IR as leading and noted “It is an advantage for New Zealand to have the policy function inside the administrator as the dual function can be used to improve policy and delivery”.
Mini-Budget 2023
In December 2023, the Government announced 2 proposals as part of its mini-Budget:
- Returning the bright-line test to a 2-year period from 1 July 2024. For properties sold on or after 1 July 2024, the bright-line test will only apply if the property is sold within 2 years of purchasing it, and the customer does not meet the exclusions.
- Removing depreciation deductions for commercial and industrial buildings from 1 April 2024.
A team of people from across IR worked with the Treasury Te Tai Ōhanga to design the policy proposals to ensure they could be administered effectively and efficiently, delivered in the timeframes required and minimised effort for customers. These changes were included in the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Bill enacted in March 2024.
The Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Bill
In addition to the changes announced in the mini-Budget, other Government priorities included in this Bill were restoring the ability from 1 April 2024 to claim interest deductions for residential investment properties and introducing a new gaming duty of 12% on online casino gambling from 1 July 2024.
The Bill also included a number of remedial items. We regularly provide advice on updates to legislation, including integrity issues that are identified and where rules do not reflect the policy intent. Ensuring that the rules that govern the tax and social policy programmes we administer are maintained and fit for purpose is part of our product and regulatory stewardship work.
Budget 2024
IR is delivering a number of changes announced as part of Budget 2024 and have worked at pace and across the public sector to ensure they are implemented on time and as smoothly as possible.
A significant amount of work took place to ensure we were well prepared. Many people from across IR were involved in making sure our systems are ready to support these changes, we’re ready to respond to customers and customers have the information they need.
From 1 July 2024, FamilyBoost was introduced to support households with the cost of early childhood education, with parents able to start claiming support in October. You can read about FamilyBoost here:
Giving New Zealanders certainty and options
Outcomes of the transformation programme
From 31 July 2024, thresholds for the bottom 3 personal income tax rates increased, the Independent Earner Tax Credit was extended and thresholds increased for 2 of the 4 types of Working for Families payments—Minimum Family Tax Credit and In Work Family Tax Credit.
From 1 April 2025, other changes will take effect, including an increase in the interest rate charged on overseas-based borrowers’ student loans for late repayments.