Budget 2026 for Kiwi business: Bright spots and big questions
Friday, 29 May 2026
Dean Chadwick is MYOB’s chief customer officer.
ANALYSIS: Budget 2026 lands at a delicate moment for New Zealand business, and in an election year, it was always going to carry some added weight.
After weeks of careful signalling from the Government about spending restraint, reprioritisation and getting the books back on track, the package reveals a Budget that is designed to secure New Zealand’s future. A strong focus on infrastructure, boosting essential services, strengthening education, greater investment in health and more spend on defence are the cornerstones of Budget 2026.
The impacts of the escalations in the Middle East are still on everyone’s mind, however, and additional moves to address fuel pressures also featured in this year’s Budget, including $150 million going toward shoring up fuel reserves, and $450m set aside as a contingency if conditions worsen. With 61% of SMEs we polled earlier this year reporting that fuel is critical to their ability to operate, this precautionary planning should offer some reassurance.
Overall, businesses entered this year with greater optimism, ambitions for growth, steady revenue and plans to invest in their operations. However, with external events putting pressure on supply chains and adding to already high overheads, was there any other respite to be found in the Budget’s announcements?
Investment in talent pipelines for trades, primary industries
The Apprenticeship Boost might have concluded, but the investment in upskilling local students to ensure healthy talent pipelines for key industries continues through increased funding for trades academies and industry skills boards.
Trades Academies see schools, tertiary institutions and employers partner to provide students with the opportunity to learn key skills for future careers in construction, electrical, mechanical and agriculture sectors. These are receiving a funding boost of $69m, which aims to double the free trades training for Year 11-13 Students. Supporting this will be planning by Industry Skills Boards who, with $15m in additional funding, are charged with developing at least eight new industry-led subjects matched to real-world market demands.
Our 2026 Business Monitor showed that 35% of SME owners and decision makers were concerned about the pipeline of talent in their industry and its ability to meet their needs over the next five years. With this concern highest in agribusiness, construction and trades, this announcement will be welcome news for many employers in these sectors.
Extending and safeguarding roading infrastructure
More than a quarter (26%) of SMEs polled in our Business Monitor were hoping to see an allocation for disaster management and resilience in the Budget. Maintenance and resilience of key routes was also a key ask from those in the transport, postal and warehousing sector in particular.
Helping to keep New Zealanders – and businesses – moving, the Budget also includes a significant capital investment boost to extend and protect key roading networks across the country. A $1.77b allocation to extend the Waikato Expressway will help to further strengthen business, freight and travel between the Golden Triangle regions of Auckland, Bay of Plenty and the Waikato.
Offering relief for towns, residences and businesses impacted by extreme weather events, an additional investment of $400m has been allocated for state highway resilience projects to keep critical routes open during and after such events. This includes SH25 through the Coromandel, the Awakino Gorge, Milford to Te Anau, and many others that are key connective roading networks for New Zealanders, businesses, and tourists exploring Aotearoa.
Incentive changes and compliance relief
The Research and Development Tax Incentive (otherwise known as the RDTI) has long been complex and cost-prohibitive for businesses, but for fast-growing start-ups and more established mid-sized businesses leveraging this initiative, changes to the Incentive announced in Budget 2026 will be well received.
The introduction of in-year payments, so businesses can benefit from their tax credit sooner, will certainly help with steady cashflow for local enterprises, while greater flexibility around RDTI return deadlines could alleviate some compliance pressure for time-restricted or resource-light businesses.
Also on the compliance front, while not offering a major financial impact, simplifying FBT rules on private vehicle use will allow SMEs to finally ditch the annoying log-book, in turn reducing time and compliance costs.
Changes abound for charities
For grassroots charities and those operating in the not-for-profit sector, Budget 2026 delivers good news. The amount of net income earned before paying tax will increase from $1,000 to $10,000, meaning these hardworking organisations that rely on volunteers and donations can put more of their income toward their cause. In another change for the sector, the Donation Tax Credit Scheme will soon see eligible donations capped at $100,000 per year.
Growth opportunities missed and watchouts on the radar
While changes to the RDTI will alleviate some of the connected compliance burden and free up all-important cashflow for businesses claiming the incentive, changing the criteria to lower the entry-point cost – particularly in a high-cost environment – could have been a game-changer for SMEs ready to break ground in highly-productive areas like science, health and technology.
Local small and mid-sized businesses will also be wary of the announcement of a new prudential levy introduced for banks, non-bank deposit takers, insurers and other financial market operators. While the levy is estimated to deliver around $209m over the next four years to the Reserve Bank, with insurance costs already high and interest rates set to increase again, local businesses will be watching closely to see if and how these levies are passed on.