7 August 2009 Media Statement

Government says no to a $65 return for every dollar spent

The Inland Revenue Department cannot fully pursue the rich returns available from debt recovery because of the Government’s cap on staffing, says Labour revenue spokesperson Stuart Nash.

Stuart Nash said Revenue Minister Peter Dunne admitted at this week’s Finance and Expenditure Committee meeting that for every dollar spent chasing $4.036 billion in overdue taxes, the IRD targets getting $65 back.

"That is an incredible return on investment,” Stuart Nash said.

“Surely good sense demands more resources should be allocated to this area. IRD needs to be increasing staff numbers in debt management and collection as it seeks to manage a growing tax debt problem.”

The IRD has announced that it will save approximately $60m over five years as the result of around 270 voluntary redundancies, Stuart Nash said.

“While staff who are being made redundant are not from the debt collection area, the department should be looking to reprioritise staffing numbers into critical areas, not simply managing the head count for the sake of it.

"It's staggering that the IRD is not investing significant resources into managing the nation’s growing debt, especially in light of a recently released Auditor-General's report that forecast tax debt could double to $8.5 billion by 2012 if the IRD does not improve its systems and processes,” Stuart Nash said.

“At a time when the Government is calling for fiscal restraint, asking departments to trim budgets, and has made more than 1500 public servants redundant, it seems to me that it would be very prudent to be investing in debt collecting staff and resources.”

ENDS

© Scoop Media