The Government has labelled Budget 2025 the “Growth Budget”. For our clients, particularly business owners and whānau-led enterprises across Aotearoa, the announcement brings a mix of targeted incentives, modest cost-of-living support and long-term structural shifts. These touch on key areas such as business investment, retirement savings and infrastructure.
Click here to view our Budget 2025 summary.
"At last we have a Growth Budget - focused on growing the economy to help Kiwis get ahead.
At the centre is Investment Boost - a tax incentive which makes it easier for tradies, farmers, and small business owners to invest in new assets to increase productivity and lift wages."
Marc Nel
Director
Moore Oldershaw Audit
Business investment gets a lift
The most significant business-focused initiative is the new Investment Boost tax incentive. It allows businesses to deduct 20 percent of a new asset’s value from their taxable income in the year of purchase, on top of standard depreciation claims.
This aims to encourage businesses to invest in productive assets like machinery and equipment. Treasury forecasts suggest it could increase GDP by 1 percent and wages by 1.5 percent over the next two decades, with half those benefits realised within five years.
Our view: This is a practical, cashflow-positive incentive that may tip the balance for businesses considering capital investment. We are already advising clients on how to integrate this into upcoming planning and forecasting cycles.
“The May 2025 Budget focuses on economic growth and recovery.
One of the approaches to encourage the growth and recovery is the introduction of the Investment Boost, where businesses of any size can deduct 20% of a new asset’s value from that year’s taxable income, on top of its normal depreciation. It is believed that it will improve cashflow of the businesses, resulting in more investment opportunities. The Investment Boost is available from today (22 May 2025).
There is no cap limitation on the investment value and the Boost can be claimed on both new assets purchased in New Zealand and assets imported from overseas. The new commercial and industrial buildings are also eligible for the Boost, however, it will exclude land, residential building, and assets already in use. It seems that the Boost will typically aid investments by manufacturers, farmers and tradespersons.
The Government expects to see both GDP and wages growth in the coming years.”
Kiran Bhikha
Director
Moore Markhams Auckland
"As the theme of “Growth Budget” suggests, one of the other budget initiatives aim to stimulate greater growth by encouraging offshore investors to invest in New Zealand, while at the same time trying to improve nationwide infrastructures.
One of the key areas the Government is looking to harmonise is the international tax rules such as thin capitalisation rules that limit the amount of tax-deductible debt for foreign investors that in turn deters investment in New Zealand. Once re-balanced between the two, it is expected that foreign investment will be encouraged into New Zealand infrastructure and thereby make it easier for startups to attract and retain high quality staff.
The Government is also looking to deter tax liability of some employee share schemes to help startups and unlisted companies."
Belinda Young
Director
Moore Markhams Auckland
KiwiSaver changes on the horizon
Changes to KiwiSaver include gradually lifting the default contribution rate from 3 percent to 4 percent for both employees and employers by 2028. Government contributions are being extended to 16- and 17-year-olds but reduced for most members, particularly high earners.
From 1 July 2025, the annual government contribution will be halved to 25 cents for each dollar a member contributes each year, up to a maximum of $260.72.
Members with an income of more than $180,000 will no longer receive the government contribution from 1 July 2025.
Our view: While these changes are being phased in, they may still require employers to reconsider workforce costs and remuneration planning. We encourage early discussion to prepare for future compliance and budgeting impacts.
Cost of living support remains targeted
The Budget includes focused relief rather than broad-based tax cuts. Key initiatives include:
- Increased access to rate rebates for SuperGold cardholders
- Adjustments to Working for Families thresholds
- Relief for teachers through waived certification fees
- Extended prescription lengths to lower healthcare costs
Our view: These measures offer some relief to vulnerable and low- to middle-income households. Businesses serving these communities may see indirect benefits as spending pressure eases slightly.
Health, education and infrastructure investment continues
Key allocations include:
- $5.5 billion for health services and over $1 billion in health infrastructure, including redevelopments in Nelson and Wellington
- $734 million in education funding for learning support and attendance initiatives
- Over $700 million for new and expanded schools
Our view: These commitments support the foundations of a stronger workforce and more resilient communities. While the benefits may be felt over time, they matter for long-term business sustainability and productivity.
"Getting prescriptions for items for people with conditions such as asthma, diabetes and high blood pressure will get easier with a move to allow 12-month prescriptions from next month."
"As an asthmatic and for fellow suffers of these conditions, this change will mean a reduction in prescription/pharmacy costs and life admin. A small but useful change."
Lena Ripley
Director
Moore Oldershaw Audit
A cautious but forward-looking fiscal approach
The Government is keeping the annual operating allowance at $1.3 billion, the lowest in ten years, while committing $6.8 billion in new capital funding. There is also a continued focus on reducing debt and returning to surplus.
Our view: This approach offers a clearer fiscal pathway, giving businesses greater certainty in the medium term. In a volatile global environment, a steady domestic setting is helpful.
“A positive initiative released today is the intention to deliver a more frequent, reliable measure of inflation by moving from quarterly to monthly Consumers Price Index (CPI) reporting.
Data will be collected on a monthly rather than quarterly basis, with regular monthly CPI reporting delivered from the beginning of 2027. More timely and reliable data will help broader economic decision making – ultimately for the better of New Zealand."
Andrew Steel
Partner
Moore Markhams Wellington Audit
Final thoughts
Budget 2025 is measured and targeted. It is focused on enabling growth through investment, while maintaining discipline in public spending. For business owners, the emphasis is on planning and clarity. There are no sweeping changes, but there are meaningful incentives and policy signals to work with.
At Moore Markhams, we are already working with clients to unpack what these changes mean. Whether you are thinking about capital investment, compliance planning or workforce strategy, we are here to guide you through the decisions that matter.
Helping you thrive in a changing world remains our purpose.