Reflections on the 2025 Budget

Having spent the end of last week combing through the Budget papers, I’m encouraged by the practical levers Ministers have pulled to help our tech ecosystem keep moving, even in a deliberately lean fiscal year. Below is what matters most for NZTech Group members and why.

First up is the headline Investment Boost. From 22 May, any business that buys new productive assets can expense an extra 20 percent of the purchase price in the first year, on top of normal depreciation. The Treasury’s factsheet is refreshingly clear:
“Businesses can deduct 20 percent of a new asset’s value from that year’s taxable income.”

For capital‑hungry firms—whether you’re fitting out a lab or racking servers—this is real cash‑flow relief that should shorten the pay‑back period on growth investments.

Alongside this, Inland Revenue will introduce a tax‑deferral regime for employee share schemes so start‑up staff don’t get a tax bill before they have liquidity. Coupled with the Government’s decision to scrap the Digital Services Tax Bill, “A global solution has always been our preferred option,” Revenue Minister Simon Watts said when pulling the bill this week. The tax settings tilt further toward growth and talent attraction.

On the science side, Vote Business, Science and Innovation receives an average $203 million a year in new operating funding. More importantly, Budget 2025 begins the rebuild of the public research system. Funding of $20 million over two years will stand up three new Public Research Organisations in the bio‑economy, earth sciences, and health/forensics spaces. At the same time, $22.9 million over four years (starting with $6.7 million in 2025/26) goes to establish a dedicated Gene Technology Regulator charged with writing clear rules for gene‑edited products.

For digital‑creative members, the screen incentive survives. The Estimates set aside $210 million in 2025/26 for the international Screen Production Rebate—part of a multi‑year grant that keeps VFX, gaming and film work onshore. And a brand‑new agency, Invest New Zealand, receives $21.15 million a year to act as a single front door for offshore investors with “a particular interest in science, innovation and technology.” 

Skills weren’t forgotten. From January 2026 tertiary providers get a 3 percent lift in tuition and training subsidies, backed by $213 million, plus a targeted 1.75 percent top‑up for STEM degrees worth $64 million. This eases some price pressure on computer‑science and engineering courses and signals continued demand for tech graduates. Although this seems a little at odds with a Tertiary Education Commission consultation currently underway which recommends dropping digital technology from the list of industries that will have focused Industry Skills Boards (ISBs). These new ISBs will receive funding of $30 million a year for industry-led education standards-setting.

Finally, keep an eye on government procurement. The Budget seeds a clutch of digital projects: a $75.8 million SaaS assessment tool for schools; $60 million to refresh NZDF information capability; $28.6 million for maritime digital navigation; $7 million for Pharmac data and digital; and $5.3 million to scope NZQA’s Strategic Technology Enhancement. If you sell cloud integration, cyber‑security, data or GIS solutions, these are pipelines worth exploring.

What it means for us: the Government isn’t showering the sector with grants, but it is tuning tax, skills and regulatory settings to remove friction and open new markets. My take is simple: if you have an expansion plan on the shelf, be it a new product line, offshore acquisition, or a bigger graduate intake, 2025 looks like a sensible time to dust it off. Let me know how these changes land for your business. 

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