Vote Revenue
APPROPRIATION MINISTER(S): Minister of Revenue (M57)
APPROPRIATION ADMINISTRATOR: Inland Revenue Department
RESPONSIBLE MINISTER FOR INLAND REVENUE DEPARTMENT: Minister of Revenue
THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
 643
VOTE REVENUE
Details of Appropriations and Capital Injections
Annual and Permanent Appropriations
2014/15
Estimates
Budget
$000
Supplementary
Estimates
Budget
$000
Total
Budget
$000
Management of Debt and Outstanding Returns (M57)
Taking action where returns are outstanding and where payments are overdue, including
providing people with assistance on the actions they need to take to meet their obligations. This
includes collection on behalf of other agencies and external parties.
143,259
8,204
151,463
Policy Advice (M57)
This appropriation is limited to the provision of advice (including second opinion advice and
contributions to policy advice led by other agencies) to support decision-making by Ministers on
government policy matters.
8,053
1,100
9,153
Services to Inform the Public About Entitlements and Meeting Obligations (M57)
Providing information and assistance to customers on the application of the law. Responding to
customer enquiries about tax and social support programmes. 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.
Provision of services to Ministers to enable them to discharge their portfolio (other than policy
decision-making responsibilities).
251,307
1,848
253,155
Services to Other Agencies RDA (M57)
This appropriation is limited to the provision of services by Inland Revenue to other agencies,
where those services are not within the scope of another departmental output expense
appropriation in Vote Revenue.
3,060
-
3,060
Services to Process Obligations and Entitlements (M57)
Registering tax payers, making tax assessments, assessing child support liabilities including
providing a readily accessible inexpensive process for reviewing assessments, receiving and
making payments to customers, processing applications and payments for social support
programmes, collection of ACC Earners' levies, supplying information to other government
agencies and accounting and reporting the collection of Crown revenue.
140,572
(7,065)
133,507
Taxpayer Audit (M57)
Identifying risks to revenue and designing and undertaking audit activities accordingly. Managing
litigation of disputed tax cases.
166,131
10,928
177,059
Total Departmental Output Expenses
712,382
15,015
727,397
Inland Revenue Department - Capital Expenditure PLA (M57)
This appropriation is limited to the purchase or development of assets by and for the use of the
Inland Revenue Department, as authorised by section 24(1) of the Public Finance Act 1989.
62,336
(29,336)
33,000
Total Departmental Capital Expenditure
62,336
(29,336)
33,000
267,000
(4,000)
263,000
1,300
-
1,300
Titles and Scopes of Appropriations by Appropriation Type
Departmental Output Expenses
Departmental Capital Expenditure
Benefits or Related Expenses
Child Support Payments PLA (M57)
Child support payments to custodial persons who are not dependent on the state for financial
support (expenses incurred pursuant to section 141 of the Child Support Act 1991).
Child Tax Credit PLA (M57)
Extra assistance for low to middle income families who are not dependent on the state for
financial support (expenses incurred pursuant to section 185 of the Tax Administration Act 1994).
644
 THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
VOTE REVENUE
2014/15
Estimates
Budget
$000
Supplementary
Estimates
Budget
$000
Total
Budget
$000
Family Tax Credit PLA (M57)
Family Support payments made to beneficiaries and non-beneficiaries during the year (expenses
incurred pursuant to section 185 of the Tax Administration Act 1994).
1,934,000
(77,000)
1,857,000
In-Work Tax Credit PLA (M57)
Extra assistance for low to middle income families where the person works a minimum of 20
hours per week and does not have a partner, or a person and their partner work a minimum of 30
hours per week (expenses incurred pursuant to section 185 of the Tax Administration Act 1994).
494,000
18,000
512,000
13,000
-
13,000
KiwiSaver: Kickstart Payment (M57)
To enable the one-off payment made on opening a KiwiSaver account for members who meet the
required eligibility criteria as set in the KiwiSaver Act 2006.
171,000
60,000
231,000
KiwiSaver: Tax Credit (M57)
To enable the payment of a tax credit to KiwiSaver members and the payment of residual tax
credits to employers as set out in the Income Tax Act 2007.
643,000
-
643,000
13,000
3,000
16,000
Paid Parental Leave Payments (M57)
This appropriation is limited to Paid Parental Leave Payments made to parents in accordance
with the Parental Leave and Employment Protection Act 1987.
176,000
13,000
189,000
Parental Tax Credit PLA (M57)
To enable payment of additional financial support to be made to working families for the eight
week period following the birth of a child (expenses incurred pursuant to section 185 of the Tax
Administration Act 1994).
19,000
2,000
21,000
4,000
100
4,100
3,735,300
15,100
3,750,400
10
10
20
Environmental Restoration Account Interest PLA (M57)
This appropriation is limited to interest on Environmental Restoration accounts (expenses
incurred pursuant to section 185 of the Tax Administration Act 1994).
2,000
-
2,000
Income Equalisation Interest PLA (M57)
This appropriation is limited to interest on Income Equalisation Reserve Scheme accounts held by
taxpayers in the farming, fishing or forestry industries (expenses incurred pursuant to section 185
of the Tax Administration Act 1994).
7,000
8,000
15,000
Total Non-Departmental Borrowing Expenses
9,010
8,010
17,020
Titles and Scopes of Appropriations by Appropriation Type
KiwiSaver: Interest (M57)
To enable the payment of interest on KiwiSaver contributions as set out in the KiwiSaver Act
2006.
Minimum Family Tax Credit PLA (M57)
Extra payment made to families where at least one parent is working for salary or wages
(expenses incurred pursuant to section 185 of the Tax Administration Act 1994).
Payroll Subsidy PLA (M57)
This appropriation is limited to the payment of a subsidy to a payroll agent undertaking employers'
payroll-related tax compliance activities on their behalf, section 185 of the Tax Administration Act
1994.
Total Benefits or Related Expenses
Non-Departmental Borrowing Expenses
Adverse Event Interest PLA (M57)
This appropriation is limited to interest on Adverse Event Income Equalisation Reserve accounts
held by taxpayers in the farming and agriculture business (expenses incurred pursuant to section
185 of the Tax Administration Act 1994).
THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
 645
VOTE REVENUE
2014/15
Estimates
Budget
$000
Supplementary
Estimates
Budget
$000
Total
Budget
$000
1,162,098
18,258
1,180,356
Impairment of Debt Relating to Child Support (M57)
This appropriation is limited to amounts relating to impairment arising from objective evidence of
one or more loss events that occurred after the initial recognition of the debt, and the loss event
(or events) has had a reliably measurable impact on the estimated future cash flows of the
collective book of child support debt.
323,000
(71,000)
252,000
Impairment of Debt Relating to Student Loans (M57)
This appropriation is limited to amounts relating to impairment arising from objective evidence of
one or more loss events that occurred after the initial recognition of the loan, and the loss event
(or events) has had a reliably measurable impact on the estimated future cash flows of the
collective book of student loan debt.
100,000
182,000
282,000
Initial Fair Value Write-Down Relating to Student Loans (M57)
This appropriation is limited to the initial fair value write-down of student loans.
668,000
(45,156)
622,844
Total Non-Departmental Other Expenses
2,253,098
84,102
2,337,200
Total Annual and Permanent Appropriations
6,772,126
92,891
6,865,017
Titles and Scopes of Appropriations by Appropriation Type
Non-Departmental Other Expenses
Impairment of Debt and Debt Write-Offs (M57)
This appropriation is limited to bad debt write-offs for Crown debt and to amounts relating to
impairment arising from objective evidence of one or more loss events that occurred after the
initial recognition of the debt, and the loss event (or events) has had a reliably measurable impact
on the estimated future cash flows of the Crown debt book.
Capital Injection Authorisations
2014/15
Estimates Budget
$000
Supplementary
Estimates Budget
$000
Total Budget
$000
2,336
1,236
3,572
Inland Revenue Department - Capital Injection (M57)
646
 THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
VOTE REVENUE
Supporting Information
Part 1 - Vote as a Whole
1.2 - Trends in the Vote
Summary of Financial Activity
2014/15
Supplementary Estimates
NonDepartmental Departmental
Total
Estimates Transactions Transactions Transactions
$000
$000
$000
$000
Total
$000
Appropriations
Output Expenses
712,382
15,015
-
15,015
727,397
3,735,300
N/A
15,100
15,100
3,750,400
9,010
-
8,010
8,010
17,020
2,253,098
-
84,102
84,102
2,337,200
62,336
(29,336)
-
(29,336)
33,000
-
-
N/A
-
-
Output Expenses
-
-
-
-
-
Other Expenses
-
-
-
-
-
Capital Expenditure
-
N/A
-
-
-
6,772,126
(14,321)
107,212
92,891
6,865,017
60,378,000
N/A
(678,000)
(678,000)
59,700,000
Non-Tax Revenue
1,533,000
N/A
(173,000)
(173,000)
1,360,000
Capital Receipts
1,259,000
N/A
181,500
181,500
1,440,500
63,170,000
N/A
(669,500)
(669,500)
62,500,500
Benefits or Related Expenses
Borrowing Expenses
Other Expenses
Capital Expenditure
Intelligence and Security Department Expenses and Capital
Expenditure
Multi-Category Expenses and Capital Expenditure (MCA)
Total Appropriations
Crown Revenue and Capital Receipts
Tax Revenue
Total Crown Revenue and Capital Receipts
THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
 647
VOTE REVENUE
Part 2 - Details of Departmental Appropriations
2.1 - Departmental Output Expenses
Management of Debt and Outstanding Returns (M57)
Scope of Appropriation
Taking action where returns are outstanding and where payments are overdue, including providing
people with assistance on the actions they need to take to meet their obligations. This includes
collection on behalf of other agencies and external parties.
Expenses and Revenue
2014/15
Estimates
$000
Supplementary
Estimates
$000
Total
$000
Total Appropriation
143,259
8,204
151,463
Revenue from the Crown
140,297
8,204
148,501
2,962
-
2,962
Revenue from Others
Reasons for Change in Appropriation
This appropriation increased by $8.204 million to $151.463 million for 2014/15 due to:
 a fiscally neutral adjustment of $4.700 million between departmental output expenses
 a net increase of $4.475 million represented by the return of ($1.008 million), additional funding of
$6.300 million, and a transfer of ($817,000) from 2014/15 to 2015/16 for the business transformation
programme, and
 a transfer of $384,000 from 2013/14 to 2014/15 for the mainframe project.
Partially offset by:
 a transfer of ($1.061 million) from 2014/15 to 2017/18 and 2018/19 to align with the timing of capital
expenditure for the business transformation programme, and
 a net reduction of ($294,000) represented by the additional funding of $7,000 and a transfer of
($301,000) from 2014/15 to 2015/16 for the child support scheme reform initiative.
Policy Advice (M57)
Scope of Appropriation
This appropriation is limited to the provision of advice (including second opinion advice and
contributions to policy advice led by other agencies) to support decision-making by Ministers on
government policy matters.
648
 THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
VOTE REVENUE
Expenses and Revenue
2014/15
Estimates
$000
Supplementary
Estimates
$000
Total
$000
Total Appropriation
8,053
1,100
9,153
Revenue from the Crown
8,051
1,100
9,151
2
-
2
Revenue from Others
How Performance will be Assessed and End of Year Reporting Requirements
2014/15
Performance Measures
The total cost per hour of producing outputs (see Note 1).
Estimates
Standard
Supplementary
Estimates
Standard
Total
Standard
$150
($35)
$115
Note 1 - The formula has been updated by Treasury to align it with the amended definition of policy
advice costs.
Reasons for Change in Appropriation
This appropriation increased by $1.100 million to $9.153 million for 2014/15 due to additional funding for
the business transformation programme.
Services to Inform the Public About Entitlements and Meeting Obligations (M57)
Scope of Appropriation
Providing information and assistance to customers on the application of the law. Responding to
customer enquiries about tax and social support programmes. 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. Provision of services to
Ministers to enable them to discharge their portfolio (other than policy decision-making responsibilities).
Expenses and Revenue
2014/15
Estimates
$000
Supplementary
Estimates
$000
Total
$000
Total Appropriation
251,307
1,848
253,155
Revenue from the Crown
249,846
1,848
251,694
1,461
-
1,461
Revenue from Others
THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
 649
VOTE REVENUE
Reasons for Change in Appropriation
This appropriation increased by $1.848 million to $253.155 million for 2014/15 due to:
 a net increase of $7.573 million represented by the return of ($2.088 million), additional funding of
$11.100 million, and a transfer of ($1.439 million) from 2014/15 to 2015/16 for the business
transformation programme
 a net increase of $901,000 represented by the additional funding of $427,000, a transfer of
$2.554 million from 2013/14 to 2014/15, and a transfer of ($2.080 million) from 2014/15 to 2015/16 for
the child support scheme reform initiative
 a transfer of $450,000 from 2013/14 to 2014/15 for the salary trade-offs initiative
 additional funding of $342,000 for the cashing out research and development tax losses initiative
 a transfer of $267,000 from 2013/14 to 2014/15 for the mainframe project
 a transfer of $187,000 from 2013/14 to 2014/15 for the implementing student support changes
initiative
 a transfer of $167,000 from 2013/14 to 2014/15 for the broadening the definition of income for student
loan repayment purposes initiative, and
 additional funding of $133,000 for the KiwiSaver: removal of kick-start payment initiative.
Partially offset by:
 a transfer of ($6.248 million) from 2014/15 to 2017/18 and 2018/19 to align with the timing of capital
expenditure for the business transformation programme
 a transfer of ($224,000) from 2014/15 to 2015/16 for the paid parental leave payments initiative, and
 a fiscally neutral adjustment of ($1.700 million) between departmental output expenses.
Services to Process Obligations and Entitlements (M57)
Scope of Appropriation
Registering tax payers, making tax assessments, assessing child support liabilities including providing a
readily accessible inexpensive process for reviewing assessments, receiving and making payments to
customers, processing applications and payments for social support programmes, collection of ACC
Earners' levies, supplying information to other government agencies and accounting and reporting the
collection of Crown revenue.
Expenses and Revenue
2014/15
Estimates
$000
Supplementary
Estimates
$000
Total
$000
Total Appropriation
140,572
(7,065)
133,507
Revenue from the Crown
119,575
(7,065)
112,510
20,997
-
20,997
Revenue from Others
650
 THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
VOTE REVENUE
Reasons for Change in Appropriation
This appropriation decreased by ($7.065 million) to $133.507 million for 2014/15 due to:
 a fiscally neutral adjustment of ($10.300 million) between departmental output expenses
 a transfer of ($3.973 million) from 2014/15 to 2017/18 and 2018/19 to align with the timing of capital
expenditure for the business transformation programme
 the return of ($1.431 million) relating to the simplifying filing requirements for individuals and record
keeping requirements for businesses initiative, and
 a transfer of ($894,000) from 2014/15 to 2015/16 for the paid parental leave payments initiative.
Partially offset by:
 a net increase of $4.425 million represented by the return of ($972,000), additional funding of
$6.200 million, and a transfer of ($803,000) from 2014/15 to 2015/16 for the business transformation
programme
 additional funding of $1.382 million relating to the complying with the Foreign Account Tax Compliance
Act initiative
 a net increase of $962,000 represented by additional funding of $499,000, a transfer of $1.096 million
from 2013/14 to 2014/15, and a transfer of ($633,000) from 2014/15 to 2015/16 for the child support
scheme reform initiative
 a transfer of $784,000 from 2013/14 to 2014/15 for the mainframe project
 a transfer of $713,000 from 2013/14 to 2014/15 for the implementing student support changes initiative
 a transfer of $450,000 from 2013/14 to 2014/15 for the salary trade-offs initiative
 additional funding of $427,000 for the cashing out research and development tax losses initiative
 a transfer of $333,000 from 2013/14 to 2014/15 for the broadening the definition of income for student
loan repayment purposes initiative, and
 additional funding of $57,000 for the KiwiSaver: removal of kick-start payment initiative.
Taxpayer Audit (M57)
Scope of Appropriation
Identifying risks to revenue and designing and undertaking audit activities accordingly. Managing
litigation of disputed tax cases.
Expenses and Revenue
2014/15
Estimates
$000
Supplementary
Estimates
$000
Total
$000
Total Appropriation
166,131
10,928
177,059
Revenue from the Crown
165,866
10,928
176,794
265
-
265
Revenue from Others
THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
 651
VOTE REVENUE
Reasons for Change in Appropriation
This appropriation increased by $10.928 million to $177.059 million for 2014/15 due to:
 a fiscally neutral adjustment of $7.300 million between departmental output expenses
 a net increase of $5.027 million represented by the return of ($1.332 million), additional funding of
$7.300 million, and a transfer of ($941,000) from 2014/15 to 2015/16 for the business transformation
programme
 a transfer of $234,000 from 2013/14 to 2014/15 for the mainframe project, and
 additional funding of $85,000 for the cashing out research and development tax losses initiative
Partially offset by a transfer of ($1.718 million) from 2014/15 to 2017/18 and 2018/19 to align with the
timing of capital expenditure for the business transformation programme.
2.3 - Departmental Capital Expenditure and Capital
Injections
Inland Revenue Department - Capital Expenditure PLA (M57)
Scope of Appropriation
This appropriation is limited to the purchase or development of assets by and for the use of the Inland
Revenue Department, as authorised by section 24(1) of the Public Finance Act 1989.
Capital Expenditure
2014/15
Estimates
$000
Supplementary
Estimates
$000
Total
$000
Forests/Agricultural
-
-
-
Land
-
-
-
Property, Plant and Equipment
20,000
(16,000)
4,000
Intangibles
42,336
(13,336)
29,000
-
-
-
62,336
(29,336)
33,000
Other
Total Appropriation
Reasons for Change in Appropriation
This appropriation decreased by ($29.336 million) to $33 million for 2014/15. Capital expenditure on
existing systems and infrastructure has been reduced, with capital funding held in reserves to contribute
to Inland Revenue's transformation programme in future years.
652
 THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
VOTE REVENUE
Capital Injections and Movements in Departmental Net Assets
Inland Revenue Department
Details of Net Asset Schedule
2014/15
2014/15 Supplementary
Main Estimates
Estimates
Projections
Projections
$000
$000 Explanation of Projected Movements in 2014/15
Opening Balance
275,393
Capital Injections
2,336
275,393 Supplementary Estimates opening balance reflects the audited
results as at 30 June 2014.
3,572 Capital injections of $2.336 million for the complying with the Foreign
Account Tax Compliance Act initiative, and $1.236 million for the
cashing out research and development tax losses initiative.
Capital Withdrawals
-
(1,872) Capital withdrawal of $1.872 million for the complying with the
Foreign Account Tax Compliance Act initiative.
Surplus to be Retained (Deficit
Incurred)
-
-
Other Movements
-
-
Closing Balance
277,729
277,093
THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
 653
VOTE REVENUE
Part 3 - Details of Non-Departmental
Appropriations
3.2 - Non-Departmental Benefits or Related Expenses
Child Support Payments PLA (M57)
Scope of Appropriation
Child support payments to custodial persons who are not dependent on the state for financial support
(expenses incurred pursuant to section 141 of the Child Support Act 1991).
Reasons for Change in Appropriation
The decrease in this appropriation of $4 million from $267 million to $263 million in 2014/15 is due
to payments to custodial parents being slightly below the Budget forecast last year, reflecting lower than
forecast growth.
Family Tax Credit PLA (M57)
Scope of Appropriation
Family Support payments made to beneficiaries and non-beneficiaries during the year (expenses
incurred pursuant to section 185 of the Tax Administration Act 1994).
Reasons for Change in Appropriation
The decrease in this appropriation of $77 million from $1,934 million to $1,857 million in 2014/15 is due to
entitlements declining over time as average incomes increase. Previous Budget Initiatives increased the
rate of attrition to entitlements caused by income growth and slightly stronger growth in wages has also
contributed to the higher attrition rate this year.
In-Work Tax Credit PLA (M57)
Scope of Appropriation
Extra assistance for low to middle income families where the person works a minimum of 20 hours per
week and does not have a partner, or a person and their partner work a minimum of 30 hours per week
(expenses incurred pursuant to section 185 of the Tax Administration Act 1994).
Reasons for Change in Appropriation
The increase in this appropriation of $18 million from $494 million to $512 million in 2014/15 reflects
an increase in employment from the improving economy.
End of Year Performance Reporting
An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional
performance information is unlikely to be informative because this appropriation is solely for in-work tax
credit payments under the Income Tax Act 2007. Performance information relating to the administration of
the payment is provided under the Services to Process Obligations and Entitlements appropriation. In the
Estimates of appropriations 2014/15 the exemption was incorrectly stated as under section 15D(2)(ii) of
the Public Finance Act 1989.
654
 THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
VOTE REVENUE
KiwiSaver: Kickstart Payment (M57)
Scope of Appropriation
To enable the one-off payment made on opening a KiwiSaver account for members who meet the
required eligibility criteria as set in the KiwiSaver Act 2006.
Reasons for Change in Appropriation
The increase in this appropriation of $60 million from $171 million to $231 million in 2014/15 is due to
higher than forecast new members to the scheme offset by the new policy initiative which sees the
cessation of kick-start payments after Budget day. Due to uncertainty over the exact number of claims
which will be received before cessation of eligibility there is also an allowance in 2014/15 for this.
Minimum Family Tax Credit PLA (M57)
Scope of Appropriation
Extra payment made to families where at least one parent is working for salary or wages (expenses
incurred pursuant to section 185 of the Tax Administration Act 1994).
Reasons for Change in Appropriation
The increase in this appropriation of $3 million from $13 million to $16 million in 2014/15 is due to an
increased volume of claims seen year-to-date, reflecting increased eligibility and an improving outlook for
employment.
Paid Parental Leave Payments (M57)
Scope of Appropriation
This appropriation is limited to Paid Parental Leave Payments made to parents in accordance with the
Parental Leave and Employment Protection Act 1987.
Reasons for Change in Appropriation
The increase in this appropriation of $13 million from $176 million to $189 million in 2014/15 is due to an
improved outlook for employment and an assumed increase in the number of eligible cases.
Parental Tax Credit PLA (M57)
Scope of Appropriation
To enable payment of additional financial support to be made to working families for the eight week
period following the birth of a child (expenses incurred pursuant to section 185 of the Tax
Administration Act 1994).
Reasons for Change in Appropriation
The increase in this appropriation of $2 million from $19 million to $21 million in 2014/15 is due to forecast
growth in the uptake of the scheme.
THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
 655
VOTE REVENUE
Payroll Subsidy PLA (M57)
Scope of Appropriation
This appropriation is limited to the payment of a subsidy to a payroll agent undertaking employers'
payroll-related tax compliance activities on their behalf, section 185 of the Tax Administration Act 1994.
Reasons for Change in Appropriation
The increase in this appropriation of $100,000 from $4 million to $4.100 million in 2014/15 is due to a
slight increase in growth in the scheme. This growth may reflect provider advertising and improvements in
the economy more generally.
3.3 - Non-Departmental Borrowing Expenses
Adverse Event Interest PLA (M57)
Scope of Appropriation
This appropriation is limited to interest on Adverse Event Income Equalisation Reserve accounts held
by taxpayers in the farming and agriculture business (expenses incurred pursuant to section 185 of the
Tax Administration Act 1994).
Reasons for Change in Appropriation
The increase in this appropriation of $10,000 from $10,000 to $20,000 in 2014/15 is due to a small
increase in the interest payable. Interest forecasts are rounded up to the nearest $10,000 in the main
appropriation year.
Income Equalisation Interest PLA (M57)
Scope of Appropriation
This appropriation is limited to interest on Income Equalisation Reserve Scheme accounts held by
taxpayers in the farming, fishing or forestry industries (expenses incurred pursuant to section 185 of the
Tax Administration Act 1994).
Reasons for Change in Appropriation
The increase in this appropriation of $8 million from $7 million to $15 million in 2014/15 is due to the
forecast reduced dairy payout and drought-affected farmers in the eastern South Island. More funds are
forecast to be deposited into the scheme in 2014/15 and this has a flow-on effect on the amount of
interest that will be paid.
656
 THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
VOTE REVENUE
3.4 - Non-Departmental Other Expenses
Impairment of Debt and Debt Write-Offs (M57)
Scope of Appropriation
This appropriation is limited to bad debt write-offs for Crown debt and to amounts relating to impairment
arising from objective evidence of one or more loss events that occurred after the initial recognition of
the debt, and the loss event (or events) has had a reliably measurable impact on the estimated future
cash flows of the Crown debt book.
Reasons for Change in Appropriation
The increase in this appropriation of $18.258 million from $1,162.098 million to $1,180.356 million in
2014/15 is due to an allowance for volatility in the assumptions surrounding debt growth of
$304.384 million. Excluding the allowance we are forecasting a reduction of $286.126 million.
Impairment of Debt Relating to Child Support (M57)
Scope of Appropriation
This appropriation is limited to amounts relating to impairment arising from objective evidence of one or
more loss events that occurred after the initial recognition of the debt, and the loss event (or events)
has had a reliably measurable impact on the estimated future cash flows of the collective book of child
support debt.
Reasons for Change in Appropriation
The decrease in this appropriation of $71 million from $323 million to $252 million in 2014/15 reflects
lower child support penalty revenue forecasts. A reduction in penalty revenue leads to a reduction in
impairment as the two are directly related. The $252 million figure in 2014/15 has an allowance for
volatility in data and modelling assumptions of $30 million.
Impairment of Debt Relating to Student Loans (M57)
Scope of Appropriation
This appropriation is limited to amounts relating to impairment arising from objective evidence of one or
more loss events that occurred after the initial recognition of the loan, and the loss event (or events)
has had a reliably measurable impact on the estimated future cash flows of the collective book of
student loan debt.
Reasons for Change in Appropriation
The increase in this appropriation of $182 million from $100 million to $282 million in 2014/15 is due
to the interim valuation of the scheme, current policy initiatives and an allowance for volatility in the data
and modelling assumptions. The interim valuation of the scheme was completed in April 2015 and the
final valuation as at 30 June 2015 will be based on additional roll forward data and June macro-economic
assumptions.
THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7
 657
VOTE REVENUE
Initial Fair Value Write-Down Relating to Student Loans (M57)
Scope of Appropriation
This appropriation is limited to the initial fair value write-down of student loans.
Reasons for Change in Appropriation
The decrease in this appropriation of $45.156 million from $668 million to $622.844 million in 2014/15 is
due both to a decrease in lending forecasts and a more favourable effective interest rate, which reduces
the initial fair value write-down relating to student loans.
658
 THE SUPPLEMENTARY ESTIMATES OF APPROPRIATIONS 2014/15 B.7