New Zealand Budget 2025 wrap-up: what it means for accountants

In our expert commentary of this year’s NZ Budget, we'll look at the winners and losers this time around and provide pointers to practices looking to advise their clients. 

Read our deep dive into the New Zealand Budget 2025 and learn more about its impact on the accounting industry over the next twelve months. 

The New Zealand Budget 2025 was handed down in Parliament by Finance Minister Nicola Willis on Thursday 22nd May 2025. This is her second budget, and one which is set to indicate how much the coalition Government will spend over the next 12 months and beyond. 

Speaking to 1News after the Budget’s release, Nicola Willis said that the budget is an indicator that “economy recovery is here.” 

"You are going to see your incomes rising faster than the cost of living, jobs are going to be created, more than 240,000 over the next few years, and we are making sure we can invest in the things that matter to you,” she said. 

However, there was some backlash from leading commentators, including the Public Service Association (PSA), the largest trade union in the country that represents over 90,000 workers. They branded the budget as “mean and heartless” in reference to the changes made to the Equal Pay Act that has stripped approximately $60 million a week in salaries paid to care and support workers. 

"The Government promised to tackle the cost of living - how does taking billions of dollars from the pay of so many underpaid women help them balance their own budgets? It’s just another broken promise, and Kiwi women are paying for this,” PSA’s National Secretary Fleur Fitzsimons said. 

Investment Boost tax incentive 

The Investment Boost tax incentive enables businesses to immediately deduct 20% of the cost of a new asset, on top of depreciation. This results in a lower tax bill for businesses for the year of purchase. 

Finance Minister Nicola Willis emphasised that the incentive was introduced to encourage economic growth. 

“The Treasury and Inland Revenue estimate Investment Boost will improve economic growth, lifting New Zealand’s GDP by 1 per cent, wages by 1.5 per cent and our capital stock by 1.6 per cent over the next 20 years, with around half these gains expected in the first five years,” she said. 

Robyn Walker, partner for Deloitte, welcomed the boost, stating that it was overall a really positive change for NZ-based businesses. 

"With an estimated annual cost of $1.7 billion, Budget 2025 has delivered on depreciation changes - not as generously as some would have liked, but more generously than many would have predicted.” 

The change will require New Zealand-based accountants to adjust their tax planning strategies accordingly, while also researching everything they need to know about the incentive to provide their clients with value-adding advice on asset acquisitions in the next 12 months. 

KiwiSaver scheme changes 

The Budget 2025 made changes to KiwiSaver, the voluntary savings scheme to help set people up for their first home and retirement. These changes were made to make the savings scheme more “sustainable” for New Zealanders 

The default rate of employee and matching employer KiwiSaver contributions will be raised from 3 to 4 percent of salary and wages, which will be phased over a three-year period. NZ employees on the scheme will be able to choose whether or not they stay at the 3 per cent rate. 

Staying informed of these changes will present new advisory opportunities for accounting firms in the areas of retirement and investment taxation. 

Supporting cost of living challenges 

New funding delivered through the NZ Budget was targeted to support many New Zealanders doing it tough. 

The Working for Families abatement threshold was lifted from $42,700 to $44,900, with the abatement rate raised from 27% to 27.5%.  

The JobSeeker benefit was also tightened up to encourage employment and reduce Jobseeker number to 50,000 by 2030. Eligibility changes include a parental means testing for 18- to 19-year-olds which will be in affect from 2027. 

These cost-of-living changes present several opportunities for New Zealand based accounting firms. The Working for Families adjustments will require firms to review their clients’ eligibility as part of tax planning and advisory services, to determine their optimal income levels and help them maximise their entitlements. 

The JobSeeker changes can impact budgeting and family support analysis for clients who have adult children who no longer qualify for Jobseeker. There will be an opportunity to advise employers on workforce and recruitment strategies to assist with the forecasting of labour needs or explore subsidised employment schemes. 

The spending measures announced during the New Zealand Budget 2025 were passed down with the aim of stimulating economic growth within the country.  

Remember that staying informed and proactive in adapting to changes is crucial for providing effective client advisory services in your practice, whilst also staying compliant. 

Now that you have read more about the contents of the Budget papers, and how they impact your accounting practice, and your clients, you may be thinking of a fresh start. 

You may want to consider whether you have the right accounting practice management software for business advisory services to help your clients make sense of the NZ Budget changes and what it means to their business. Why not talk to one of our specialists today?