SMEs say yes to Budget’s Investment Boost encouraging them to buy plant and tech
Friday, 23 May 2025
It appears the most popular feature of Budget 2025 for small businesses around the country was Investment Boost, which will allow tradies, farmers and small business owners to immediately deduct 20% of the cost of machinery, tools, equipment and tech from their taxable income.
The Government said it would encourage investment in assets that increase productivity and help lift wages.
Spare a thought for Tim Deane, owner of woollen sock company Norsewear, who bought two Lonati knitting machines from Italy for a total of $140,000 at the end of last year.
Deane explains if he were to buy those two machines now, the ability to deduct 20% of the cost of this equipment would save him $28,000 in the first year, plus 13% depreciation.
Norsewear recently won the bid to supply Te Ope Kātua o Aotearoa New Zealand Defence Force new recruits with its durable socks.
Deane, whose factory is based in Norsewood in Hawke’s Bay, says he feels empowered to make future purchases.
Investment Boost’s importance can’t be underestimated, says Deane.
“It enables me to invest more, more often, which means I can improve productivity and increase output and that often goes hand in hand with employing more people as well.”
The move shouldn’t be seen as business owners getting a handout, he adds.
“We are being encouraged to grow the productive economy, to create more jobs and more tax revenue and it will generate more products we can export.”
Not revolutionary, but it will help
Brad Jacobs, director of The Coffee Club and chair of the Parnell Business Association, also endorsed Investment Boost.
“It is good news for our The Coffee Club franchisees. It will encourage people to invest in their businesses and this goes back into the economy. It’s not revolutionary but it’s going to help.”
The fact that the Government called this the Growth Budget was encouraging, says Jacobs.
“Twelve months ago it felt like everyone was standing on the edge of the cliff joining hands and getting ready to jump and now they are ready to be positive,” he says.
Jabobs also welcomed the Budget’s announcement increasing police funding by $480 million over the next four years.
“As chair of the Parnell Business Association, the announcement on putting over half a billion on crime over the next four years is good news,” says Jacobs.
“They have been making good progress on policing crime but there are still legitimate safety concerns in the Auckland city fringe like Parnell and we’re still struggling with it,” he says.
Hunterville- based retailer Honest Wolf co-founder, Sophie Hurley was another to welcome the funding going to policing in Thursday’s Budget.
“This is hitting a lot closer to home with the proposed decommissioning of our police station in Hunterville. We would love to see some of this additional funding moving into the rural areas. Retail crime is just as prevalent in small towns as it is in the cities,” she says.
Tech startups did well in the Budget
Todd Hammington, CEO and founder of Chameleon Creator, a cloud platform helping companies modernise e-learning and training for their employees, was extremely happy with the Government’s messaging on Thursday.
“What we took from this Budget is that the Government wants companies to invest in their people, and that’s exactly what our tool helps them do. Chameleon makes it easy for businesses to upskill their teams internally, especially at a time when organisations are being asked to do more with less.”
It was good to see the Government highlight the importance of capability building, he says.
“With large investment going into public sector areas like tertiary education, healthcare, and social services, those sectors will need better tools to on-board and grow their teams,” he says.
“That creates a trickle-down effect, and tools like Chameleon are well placed to support that growth.”
SMEs welcome spending on health, education and defence
A commitment to spending on healthcare, education and defence in Thursday’s Budget was welcomed by FLOC, a 100% wool acoustic range developed by T & R Interior Systems which goes into commercial and residential buildings.
Business development manager Tom O’Sullivan says: “If you look at what the Government has pledged to spend on health, education, law and order and defence, I’m sure quite a big percentage will be on infrastructure and buildings, and that’s definitely a positive for us and will help drive confidence,” he says.
Increased spending in healthcare was welcomed by many SMEs on Thursday, who saw it as a positive for their workforces.
Toa Homes General Manager James Bushell says:“It is fantastic we are seeing more money going into healthcare in this Budget but there’s still a bandaid approach.”
“We need to start looking more at preventative care and better housing stock is one of the best ways of achieve this so we are the fence at the top of the cliff rather than the ambulance at the bottom.”
The wine industry is looking for a rise in consumer sentiment
What the Hawke’s Bay wine industry would like to see as a result of Thursday’s Budget is an improved sense of consumer confidence, says Brent Linn, CEO of Hawke’s Bay Wine, which represents wineries in the Hawke’s Bay region.
“Looking at it through the domestic lens, what winemakers want to see is people out spending with confidence. It’s not about the industry’s reaction to the Budget that’s important but Mr and Mrs NZ - what’s their confidence like as a consequence of the Budget. With reduced interest rates, through fiscal policy, all the signals are that Mr and Mrs NZ will be back in buyer mode,” says Linn.
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