The Government has released Budget 2025, and while it’s focused on keeping spending under control, there are some key takeaways for New Zealand businesses. Whether you’re a small business owner, investor, or just trying to keep ahead of the curve, here’s a straightforward breakdown of what you need to know.
A Budget Focused on Growth
At its core, Budget 2025 aims to lift NZ’s productivity, invest wisely in social outcomes, and stay disciplined with government spending. For businesses, the real news lies in a few targeted moves to boost investment, innovation, and competitiveness.
New Tax Incentive to Invest in Your Business
A standout announcement is the new “Investment Boost” tax incentive. From 22 May 2025, businesses will be able to immediately deduct 20% of the cost of new assets from their taxable income. The remaining 80% will still be depreciated as usual.
This is great news if you’re looking to invest in equipment, tools, or technology to grow your business. Just note—it’s only for new assets. Second-hand gear that’s already been used in NZ doesn’t qualify, though overseas second-hand assets may.
If you’d like to read more about the “Investment Boost” you can find the fact sheet here.
KiwiSaver Changes on the Horizon
KiwiSaver is set to change over the next few years, and it’s worth being aware of how this might impact you and your team:
- Contribution rates will increase from 3% to 3.5% in April 2026, and then to 4% in April 2028. There will be an option to apply for a 12-month savings reduction if needed.
- The Government contribution will be halved, dropping from $521.43 to $260.72 per year.
- High earners (over $180,000) won’t be eligible for Government contributions.
- 16–17 year olds can join and receive contributions if they’re saving enough.
These changes are designed to encourage long-term savings but may require a fresh look at your payroll settings and staff communications. If your salary cost is a high percentage expense for you, start considering within your budget processes or pay rise increases how to cashflow the additional 0.5%.
Attracting Talent and Investment to NZ
The Government is launching Invest New Zealand, a new Crown entity focused on bringing international investment, business, and talent into the country. Their aim is to:
- Boost investment in innovative, high-growth sectors.
- Bring in fresh capital for Kiwi businesses and research.
- Encourage global companies to expand R&D in NZ.
- Attract skilled workers to support a future-focused economy.
This could open the door to more partnerships, funding opportunities, and specialist talent—especially if your business is in a growth or tech-focused industry.
Making Foreign Investment Easier
Several initiatives are in play to make NZ more attractive to overseas investors:
- $75 million allocated over four years to support foreign investment.
- Proposed changes to make it easier for startups to offer competitive employee share schemes.
- Planned updates to foreign investment fund (FIF) rules to reduce double taxation.
If you’re thinking globally or already working with overseas investors, these changes could make life simpler and more appealing.
Support for the Screen Sector
To keep New Zealand competitive in the international film industry, the Government is committing $577 million to the International Screen Production Rebate scheme. This aims to attract large-scale productions to our shores—supporting jobs, tourism, and related industries.
What This Means for You
For business owners, Budget 2025 is a signal to think long-term. The incentives are clear: invest in productivity, innovate, and build resilience. The upcoming KiwiSaver changes and new tax rules may mean some adjustments, especially around payroll and asset planning.
If you’ve got questions or want to understand what this means for your business, please reach out to your accountant and CC Red Office in. As always we will work collaboratively with your accountant to ensure these changes are reflected correctly.
