Budget 2026: Some good elements - but cohesive growth story missing, business leaders say
Thursday, 28 May 2026
Business industry groups say there is very little for business in this year’s Budget, described as one of modest consolidation, not economic reform.
“Given the signals leading in, we expected a disciplined and relatively conservative package, with limited direct support for business,” said Business Canterbury chief executive Leeann Watson.
“While that discipline is important in the current environment, it cannot come at the expense of building a stronger economic future.
“At first glance, there isn’t a clear, cohesive growth story running through this Budget, particularly when it comes to lifting productivity, encouraging investment, and supporting the private sector to expand.”
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Watson said many of the initiatives announced would have positive impacts across the business community, but nothing that would “substantially shift the dial” on driving economic growth and productivity.
Businesses would ultimately drive economic growth and recovery in New Zealand, and business needed policy from Government that would make it easier to do business and support long term growth.
“While there are some good initiatives such as proposed changes to fringe benefit tax which should reduce compliance burdens, and the doubling of trade training which strengthens the pipeline from school to work, there remains very little targeted at unlocking business investment in productivity at scale.”
Retail NZ similarly called the Budget announcement a missed opportunity for an economic boost.
“We would have loved to have seen the Government jump at this opportunity to help give local businesses a leg up – and even generate some revenue -- by increasing the new low-value import levy, or by putting an additional tax on products that don't meet certain ethical and quality standards, such as fast-fashion and low-value goods made in factories with poor working conditions,” said Retail NZ chief executive Carolyn Young.
“The growing pressure on household budgets and declining consumer confidence has felt hard by retailers too, and our members have been calling for the Government to incentivise New Zealanders to shop in their local communities and show their love for their high streets.”
While the Government had set aside $450 million for temporary targeted support if the fuel situation worsens, Young said retailers would like to see targeted relief for freight users.
“While high diesel costs have been passed on to retailers, many have been reluctant to pass those on to customers, with getting shoppers in the door also something our members are having to balance. If some of that $450m was put towards a reduction in Road User Chargers for freight, with the provision those savings are passed on, that would help to ease some of the strain being felt by our sector.”
Young said the announced boost to trade training opportunities for secondary school students, and those not in employment, education or training, was a positive move.
“The infrastructure package the Government has announced today will create jobs in those particular regions, and it’s great to see a focus on transport resilience projects – including the next stage of the Waikato Expressway and rail network upgrades – to ensure efficient movement of goods around Aotearoa.”
It was also pleasing to see investment into law enforcement prioritised, Young said.
“Our police do such important work in taking action against retail crime, which costs New Zealand retailers $2.6 billion each year. To see this Budget putting $391 million towards frontline policing is vital to ensure our police can continue to do their work and keep our communities safe.”
Path to surplus - but at a cost
Chartered Accountants Australia and New Zealand (CA ANZ) took a different view, saying the Budget attempted to strike a difficult balance between supporting economic growth and setting New Zealand on a pathway towards a fiscal surplus, said
“Rather than deliver a ‘zero-budget’ to restore fiscal surplus faster, the Government has taken the middle path of continuing to borrow to support economic growth,” said CA ANZ chief executive Ainslie van Onselen.
“The question is whether future governments can sustain this Budget’s four-year pathway to lift New Zealand out of a structural deficit and billions of dollars of debt servicing costs each year. The answer to that question is critical – returning to surplus will give future generations more options, particularly in the event of economic shocks and natural disasters.”
CA ANZ had outlined four commitments it wanted to see from Government to strengthen New Zealand’s economy in the long term and was pleased to see two of them appear - Fringe Benefit Tax simplification and increased tax certainty for charities and not-for-profits.
But a commitment to address long term retirement setting challenges was missing, it said.
“Interest on borrowings is the fifth highest area of Government expenditure after welfare, National Superannuation, health and education. This fact alone should drive an openness to addressing the long-term challenges of unsustainable retirement settings and tax base fragility,” said country head Peter Vial.
“In her Budget speech, the Finance Minister rightly called out that the cost of NZ Super will rise by $1.8 billion in the next year alone. This Budget was a missed opportunity to tackle retirement settings, for example by indexing NZ Super to CPI rather than wage growths,” Vial said.
“This is an opportunity cost budget, as the cost of our debt servicing denies New Zealand other opportunities for investment and growth. The Government will spend more than $10 billion in 2026/2027 on debt servicing costs before it can make inroads into reducing its debt.”