Budget 2025: What It Means for NZ Businesses
Budget 2025 brings a mix of caution and opportunity, with tighter government spending and targeted support in specific areas. Here’s what it means for local businesses across Kilbirnie, Rongotai, and Lyall Bay.
Tighter Government spending
The Government is keeping new operating spending to $1.3 billion, the lowest in a decade. While this move is intended to curb inflation and reduce borrowing, it also means fewer government contracts, paused infrastructure projects, and more financial pressure in sectors that rely on public funding — especially in Wellington.
Budget operating package by area
'Investment Boost' for business
A highlight for small and medium-sized businesses is the new Investment Boost. This allows a 20% immediate deduction on new capital assets like machinery and equipment, alongside standard depreciation. It’s designed to encourage productivity and business investment.
Public sector cuts impact Wellington
Wellington is feeling the brunt of public sector job losses, contributing to reduced foot traffic and spending in our local economy. Combined with cancelled or delayed government projects, the ripple effect is already being felt in retail, hospitality, and services.
Other key changes
- KiwiSaver contributions are changing — 50% government match contribution is halved to 25% for each dollar contributed, up to a maximum of $260.72 (effective from 1 July 2025), the minimum employee contribution rises to 4% over time, and high-income earners will no longer receive the subsidy.
- In law and order, nearly $500 million will go to maintaining frontline police services, plus additional funding to relieve court and prison pressures.
- Education receives $2.5 billion over four years, focusing on learning support for children with disabilities, but capital funding is set to drop.
- Health sees steady investment, with boosts to primary care, after-hours services, and infrastructure.
- Most other government departments won’t receive extra funding and will need to absorb rising costs.
Read the full Budget 2025 update
We’ll continue to raise the need for greater support and targeted investment in suburban business districts like ours — and we’ll keep you updated as we go.
