Nicola Willis, Christopher Luxon talk up Budget at business events

Friday, 23 May 2025

Finance Minister Nicola Willis speaks to The Post on Budget 2025.

The post-Budget tour has begun.

At opposite ends of the North Island on Friday Prime Minister Christopher Luxon and Finance Minister Nicola Willis were talking up the Government’s second Budget, released on Thursday, at business events in Auckland and Wellington.

At the Trans-Tasman Business Circle post-Budget lunch at Westpac Building in Auckland, Luxon said he’d heard one story of a local business wanting to invest $1.3 million of capital into its small-medium business but the cashflow wasn’t quite right.

Thanks to the Government’s Investment Boost package revealed on Thursday, the company would be able to claim a 20% rebate “and actually, this [policy] tips [the investment] over the line,” Luxon told reporters after the lunch. “That’s exactly what we want to see.”

Earlier in the day, Finance Minister Nicola Willis began the post-Budget public relations circuit in the pre-dawn chill on Friday morning, joining a group of Hutt Valley business people at a fire truck factory.

“My message to all of you is, whether you’re a tradie, a small business person, a manufacturer, go out and buy some kit this year,” she said, to the Hutt Valley Chamber of Commerce audience clutching cups of tea and eating cream scones.

“New Zealand needs you, and we'll charge you less tax to say thank you.”

The venue was chosen for obvious reasons: Fraser Engineering in Taita is a large manufacturer in the field of emergency vehicles, and the centre-piece of this year’s Budget was a $6.6 billion tax break for businesses which invest in assets in the coming four years.

The day after publishing her second Budget, Finance Minister Nicola Willis took a tour of Fraser Engineerying in Lower Hutt, where fire trucks and other rescue vehicles are built. Willis took questions from an Hutt Valley Chamber of Commerce audience.

The accelerated depreciation expensing scheme, advertised as “Investment Boost” by the Government, will allow for business to immediately deduct 20% of the value of new assets off their tax bill – an opportunity the Treasury says should lift GDP by 1% over 20 years.

The policy covers any new assets, including commercial property, purchased by businesses, as well as mining and primary sector assets that do not meet the usual definition of depreciable assets.

“It's a very simple piece of tax relief that rewards those businesses who choose to make an investment in their business and are investing in New Zealand's future,” Willis said.

“As of yesterday, if you buy a new asset, whether that is a vehicle, whether that's a new piece of machinery, whether that's a new piece of technology, you can deduct 20% of the cost of that asset from your tax bill this year.”

In the crowd was James Zhang, owner of Heliner, a business which supplies manufacturers with computer-controlled cutting machines and robotics to automate their processes ‒ the type of productivity boosting investment the tax break is aimed at.

Zhang said the tax break would “absolutely” help his clients.

“Twenty percent is quite substantial, in terms of purchasing equipment.

An illustration about Budget 2025 published on The Post’s front page on Friday morning.

“Every business owner, they put this equipment on the wish list … They say, ‘Oh, it’s good to have, but we don’t have the budget yet’ … This will help them make a decision very fast.”

Despite the pro-business Budget, many of the questions from the chamber crowd to Willis centred on other matters: support for the vulnerable, social investment policy, tax rates of KiwiSaver contributions, and money for disability services.

Speaking to reporters afterwards, Willis said that official advice showed workers would benefit most from the Investment Boost policy.

The advice also showed another key goal of the scheme was to attract foreign investment.

“This will make New Zealand a more attractive place for investors from elsewhere in the world to come and invest in New Zealand businesses, because they'll face a lower cost of capital and they'll see bigger returns. That's a positive thing,” Willis said.

The Government legislated on Wednesday to make the tax break scheme available immediately.

Luxon, in Auckland, was also grilled on the merits of the Budget, which has been criticised for not being a true Growth Budget, with 1% GDP growth predicted over 20 years. But he pushed back on suggestions new taxes could boost revenue, saying the country had a “growth problem, not a tax problem”.

And he took aim at opposition leader Chris Hipkins who, despite criticising the Government for pay equity law changes which it was revealed would save the Government $12.8b, refused to commit to Labour restoring that amount back into the regime for future claims.

“Chris Hipkins speaks out of both sides of his mouth,” Luxon said, “[Labour] are economically illiterate.”

New initiatives announced in this Budget have largely been funded by Government savings, with the extinguishing of current pay equity claims and changes that unions say will make it more difficult or impossible to claim, expected to save the Government billions.

On Thursday Nicola Willis said the contingency set aside for claims had ballooned from about $3b to more than $12b.

While the Government has argued the pay equity changes were about workability of the system, and ensuring claims were about sex-based discrimination and not conflated with other bargaining factors, it’s seen significant backlash from unions and opposition parties with Budget initiatives dominated by talks of how they’ve been paid for.