Contents
On Thursday 22 May, Minister of Finance Nicola Willis delivered Budget 2025, calling it “a responsible budget to secure New Zealand’s future.” The focus? Supporting economic recovery, encouraging investment and laying the groundwork for long-term growth.
Here’s what you need to know—especially if you’re running a small business in New Zealand.
A Brighter Economic Outlook
The economic outlook from the Budget was cautious but optimistic. Real GDP growth is forecast to reach 2.9%, with expectations of more jobs, higher incomes and stronger business confidence.
Capital investment was high on the Government’s agenda, with government initiatives focused on health, education, law and order and the strengthening of New Zealand’s defence forces.
What Budget 2025 Means for Your Business
New ‘Investment Boost’ Scheme
The Investment Boost is a game-changer for businesses looking to grow. You'll be able to claim an additional 20% tax deduction on new assets—on top of depreciation.
This applies to:
- Machinery, tools, vehicles, and technology
- Commercial buildings (excluding land and residential property)
- New assets purchased locally or imported
It’s available to all Kiwi businesses, regardless of size and could significantly improve your cashflow in the year of purchase.
KiwiSaver Contribution Changes
From 1 April 2026, the default KiwiSaver contribution rate will increase from 3% to 3.5%, and then to 4% by April 2028. Employees can temporarily opt down to 3%, and employers can match that if needed.
Also from 1 April 2026, the Government will extend employer contributions will extend to 16- and 17-year-olds—something to keep in mind if you employ younger staff.
Capital Investment in NZ Infrastructure
The Government announced significant capital investment in the country's infrastructure:
- $1B for hospitals and health facilities
- $700M+ for new schools
- $2.7B for the NZ Defence Force
- $460M+ for rail upgrades
This could mean new contracts and long-term work for businesses in construction, logistics and professional services.
Encouraging Foreign Investment
$65M has been allocated to attract foreign investment into NZ infrastructure, with tax incentives to make it more appealing.
Backing Innovation & Startups
Funding support was announced for the transformation of Crown research institutes, establishment of a gene technology regulator and the creation of Invest New Zealand as a one-stop shop for foreign direct investment.
Additional funding for the Elevate NZ venture Fund was also announced. The Elevate is a government-funded programme, investing into venture capital funds and aimed at filing the Series A and B capital gap for high-growth Kiwi technology companies.
Increased IRD Compliance Activity
An extra $35M per year will go to Inland Revenue for compliance enforcement. This is expected to generate $280 million in extra tax revenue, indicating a focus on tax enforcement that businesses should be aware of.
Need Help Navigating Budget 2025?
Whether you’re looking to take advantage of the Investment Boost, prepare for KiwiSaver changes or just want to understand how Budget 2025 affects your business—we’re here to help.
Book a free 15-minute consultation and let’s talk through your next steps.
