Budget 2025’s tax write-off for business assets could boost local car sales

Friday, 13 June 2025

NZ’s moribund vehicle sales could get a sugar hit from the new scheme.

New Zealand’s moribund vehicle sales sector could be set for a boost, with new passenger cars topping the list of things small businesses are planning to buy as a result of Budget 2025’s quicker tax write-off on assets.

The “Investment Boost” scheme will see the Government forego $1.7 billion in taxes a year to allow tradies, farmers and small business owners to immediately deduct 20% of the cost of machinery, tools, equipment and tech from their taxable income.

Almost a third want to buy a car under the scheme. A further 28% said they’d be using it to buy office tech and digital devices, while 18% said they’d buy furniture and 15% said they’d buy tools of the trade.

About 11% said they’d buy smaller-scale machinery or equipment.

Accounting software firm MYOB released the data after surveying 541 small-medium-size enterprises (SMEs) businesses between May 29 and June 5.

MYOB’s Dean Chadwick said the new accelerated depreciation scheme would “go some way to shoring up and accelerating” the performance of SMEs.

MYOB found 49% might change business plans to invest in new assets after the budget announcement.

But economic uncertainty was still looming. While 49% of businesses said they might commit to new assets, just 12% would change their plans “considerably” while 7% were unsure.

Meanwhile, 28% said their spending plans hadn’t changed at all.

MYOB chief customer officer Dean Chadwick said companies investing in assets were more likely to be resilient in the face of global economic uncertainty.

“The ‘Investment Boost’ delivers timely support to New Zealand’s SMEs as they weigh up current economic challenges with the opportunity to invest in growing their business, and it will go some way to shoring up and accelerating their own performance,” Chadwick said.

Agriculture

Passenger vehicles were the most popular new asset for agricultural businesses, a sector with one of the highest median estimated spends on business assets for the year ahead.

Some 21% of agribusinesses expressed an interest in buying a new outdoor vehicle under the scheme.

Agribusinesses were planning to spend $56,670 on average on assets in the next 12 months, followed by $53,300 planned by manufacturers, compared with $60,000 on average by the finance and insurance sector.

Some 26% of agriculture business owners and 25% of manufacturers said they would invest in a new passenger vehicle. A further 21% were looking to invest in a new outdoor vehicle, 18% in office technology and 15% in eligible land improvements.

One in ten agribusiness owners planned to make those investments in June or July, while almost 49% would take advantage of the tax incentive in the next six months.

“While many SMEs are preparing to purchase the assets they believe will boost their productivity before the end of the year, the survey shows spending by local businesses on eligible new assets will continue into 2026,” Chadwick said.

Union economist Craig Renney gives his view on Budget 2025.

Manufacturing and construction

Meanwhile, manufacturing sentiment ticked up, with some 51% of manufacturers planned to invest in new assets within the next six months.

For the construction sector, data showed the Investment Boost would also push investment into new passenger vehicles, with 52% of small and medium firms in the sector planning on making a car purchase.

The estimated median spend for construction SMEs was $46,000 in this financial year, but 17% planned to spend between $100,000 -$199,999 in the coming year.

“While it’s evident that New Zealand’s SMEs know where they want to direct their investment to help accelerate and grow their businesses, both the spend and potential returns still need to be considered against their broader performance, their forecasts, and their outgoings particularly as their costs continue to increase,” Chadwick said.