IR has implemented initiatives that will provide the Government with additional revenue and achieve the baseline savings that it set.
Additional revenue
In a number of areas, we have worked to deliver additional and new revenue for the Government to spend, invest and reduce Crown debt.
The Budget 2024 investment in compliance is forecast to have a net positive impact to the Crown’s operating balance of $658 million over four years. The net new positive impact on the operating allowance was $586 million.
The new Crypto-asset Reporting Framework has a net positive impact of $40 million across the same period.
IR has also begun administering a new 12% duty on online casino gambling.
Savings and financial sustainability
To support the Government’s fiscal strategy, we’re focused on fiscal stewardship and sustainability. We have delivered baseline savings, self-funded many policy initiatives and managed inflationary cost pressures.
We developed our first performance plan, setting out how we will achieve a sustainable fiscal position for 2024–25 through to 2028–29. We’ll continue to look for efficiency gains across all areas and consider carefully where we invest in capability and capacity.
Reduction in operating expenditure
IR’s baseline includes a permanent reduction of $29.6 million (5%) in 2024–25 because of the Budget 2024 Initial Baseline Exercise. We achieved these savings mainly across operating expenditure in areas such as travel, training, accommodation, overtime, contractors and consultants.
An expected reduction in expenditure on systems maintenance and change capacity at IR has been managed to ensure we can deliver the Government’s work programme. This has no impact on achieving baseline savings because we’ve made additional operating savings.
We have self-funded remuneration cost pressures and inflationary cost pressures, primarily from savings in accommodation leases and information technology costs.
Reduced contractor and consultant spend
IR achieved a reduction of $4.7 million (15%) in spending on contractors and consultants in 2024–25, which represents 5% of total departmental workforce expenditure in that year. The $22.5 million of expenditure this year compares with expenditure of $41.7 million in 2022–2023 and $27.1 million in 2023–2024, which represent 10% and 6% of total departmental workforce expenditure in these years respectively.