NEW ZEALAND BUSINESS NEWS
Empowering Kiwi Businesses
New Zealand First has announced a policy allowing manufacturers and targeted export businesses to claim 50 per cent depreciation in the first year on new plant, machinery and equipment. The party says the measure aims to lift productivity and investment in sectors that need heavy upfront spending before equipment earns anything.
The proposal would sit alongside Investment Boost, which the Government introduced in Budget 2025. That scheme lets businesses deduct 20 per cent of the cost of eligible new investment assets upfront, with normal depreciation applying to the remaining 80 per cent, and it covers qualifying assets acquired or brought into use from 22 May 2025.
New Zealand First says its policy does not expand Investment Boost. Instead, it would raise the first-year depreciation rate only on new plant, machinery and equipment, and only for businesses in manufacturing and targeted export sectors such as primary production, which the party lists as mining, aquaculture, forestry, farming and fishing.
The party describes the existing scheme as a depreciation uplift across all depreciable property, and says it supports targeting new plant, machinery and equipment with high productivity returns. Manufacturers across New Zealand, along with primary industry producers in farming, fishing, aquaculture, horticulture and mining, would benefit, according to the announcement.
The party’s case rests on the size and timing of the spending involved. Industrial machinery and equipment require substantial upfront capital over long timeframes, meaning a large outlay is needed before the equipment is operational, and such equipment typically has long payback periods.
New Zealand First points to weak productivity growth and insufficient business investment as longstanding economic challenges. Businesses need modern machinery, technology and equipment to increase output, reduce costs and compete internationally, the party says.
It also cites international evidence, saying front-loaded depreciation for machinery and equipment accelerates capital investment, lifts productivity and delivers measurable increases in GDP. Like-minded economies already have such policies in place, and New Zealand needs to ensure its economy remains competitive, the announcement says.
The policy is presented as part of a wider economic programme. New Zealand First says it is the only party committed to doubling the New Zealand economy by 2050, and that reaching that goal requires policies focused on lifting productivity and gross domestic product.
For a manufacturer or exporter in the named sectors, the difference is the timing of the tax deduction rather than the total amount eventually claimed. A higher first-year deduction brings forward the benefit of buying equipment, which matters most where the payback period on that equipment is long.
The policy is deliberately narrow. Businesses outside manufacturing and the targeted export sectors would remain on the existing Investment Boost settings, and the higher rate would apply only to new plant, machinery and equipment rather than to depreciable property generally.
The announcement does not set out when the policy would take effect, how legislation would define the targeted export sectors, or what it would cost.
New Zealand First lists the depreciation measure alongside other economic policies it is promoting. These include reducing the company tax rate for small and medium-sized businesses from 28 per cent to 20 per cent, and establishing a Temasek-model $100 billion New Zealand Future Fund.
The party also names driving down energy costs by splitting the gentailers, targeted tax incentives for international investment in nationally significant infrastructure, and incentivising value-added dairy manufacturing. Further items are a Special Economic Zone at Marsden Point, returning 50 per cent of mining royalties back to their regions, and backing a New Zealand-owned bank capable of competing with foreign-owned banks.
Source: New Zealand First Party
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