This table summarises our impact assessment of the options. Options Does it meet the objectives (a, b, c , d, e)? Impacts Fiscal Administration Compliance Environmental , social and cultural Risks Net impacts Option one –status quo a, e No change. No change. No change. Lack of support for borrowers who are volunteering for an overseas charitable organisation. Time to process applications undermines policy intent. Neutral. Does not address the problem definition. Option two – delegate the authority for the approval of charitable organisations to the Commissioner of Inland Revenue a, b, c, d, e Negative. Expected to result in more applications for interest write-off being accepted, with interest foregone of approximately $1,000 per student per year. Estimated to be $30,000 interest forgone per year. Overall expected to decrease. Reduce administration costs for Inland Revenue in processing applications. There will be a small administrative cost for Inland Revenue in moving from a non-disputable to a disputable decision. Reduce administration cost for Cabinet and reduce use of Cabinet time. Reduction in compliance costs for charitable organisations – those already registered with Charities Services or approved by Inland Revenue for income tax exemption are automatically accepted. Increase support to borrowers volunteering for an overseas charitable organisation. Potentially some time delays if organisations that are not automatically approved are slow to provide necessary information. Overall positive, as allows better access to interest write-off in line with the policy intent. Reduction in administrative costs mitigates, and potentially outweighs, small fiscal cost. Objectives: (a) provide an interest write-off to borrowers who are volunteering overseas for charitable purposes (b) have an efficient and timely process for approving a charitable organisation applying for charitable status (c) reduce administration costs for Inland Revenue (d) reduce compliance costs for charitable organisations (e) ensure integrity of the process and mitigate abuse of the interest write-off provision Options Does it meet the objectives (a, b, c , d, e)? Impacts Fiscal Administration Compliance Environmental , social and cultural Risks Net impacts
Option three – backdate effective date of approval a, partially b, e Negative. Expected to result in more applications for interest write-off being accepted (but less so than option 2). Small increase in administration costs for Inland Revenue. Extra decision involved in deciding what effective date should apply for each organisation. Small increase in compliance costs – may increase the information some organisations are required to provide to Inland Revenue to support application. Increase support to borrowers volunteering for overseas charitable organisations. Potentially some time delays if organisations that are not automatically approved are slow to provide necessary information. Small positive effect; likely to give rise to greater access to interest write-off for borrowers volunteering overseas. Objectives: (a) provide an interest to borrowers who are volunteering overseas for charitable purposes (b) have an efficient and timely process for approving a charitable organisation applying for charitable status (c) reduce administration costs for Inland Revenue (d) reduce compliance costs for charitable organisations (e) ensure integrity of the process and mitigate of the interest write-off provision