IR had a key role in supporting Ministers to develop and deliver the Budget 2025 Growth Budget.
We provided policy and other advice and submitted bids for initiatives ahead of the Budget. Government provided new funding through Budget 2025 to IR to keep investing in compliance. We are self-funding the implementation and delivery costs for a number of Budget 2025 initiatives that we’ll deliver for New Zealand.
Investment Boost
Budget 2025 introduced Investment Boost, a scheme where businesses can accelerate depreciation deductions for new assets acquired from 22 May 2025. It’s designed to encourage business investment and grow the economy.
The scheme arose partly out of Ministers commissioning advice on tax options to support economic growth and productivity. IR produced a long-term insights briefing in 2022 that analysed options for reducing the cost of capital. We concluded that a broad partial expensing scheme would represent one of the most cost-effective tax policy options to increase capital investment. Investment Boost is the result.
Other major Budget 2025 initiatives
IR has planning underway to deliver other Budget 2025 initiatives including:
- Changes to Working for Families, which include raising the abatement threshold and the abatement rate (the income level at which the entitlement starts to reduce due to the amount customers earn) and extending income testing to the first year of Best Start.
- KiwiSaver changes that have extended eligibility to 16-and 17-year-olds to receive employer and Government contributions, increased default employer and employee contribution rates, removed the Government contribution for people earning over $180,000 a year and reduced the amount contributed by Government.
Continued compliance investment
Government continued to invest in additional compliance activities in Budget 2025, with $35 million more each year for compliance.
IR also received permanent funding of $26.5 million per year to replace time-limited funding that had been due to finish in June 2025. This will enable us to continue to focus on compliance work such as resolving debt and audits in areas such as income suppression, property and the hidden economy.
More information on initiatives
You can find more information about Budget 2024 and 2025 initiatives on our website.
Budget 2025
Major spending decisions
- Investment Boost—partial expensing regime
- Compliance activities—continuation of funding
- Compliance activities—increased investment
Major forecast savings and revenue decisions
- KiwiSaver package—extending eligibility to 16 and 17-year-olds
- KiwiSaver package—changes to contributions
Significant initiatives
- Employee share schemes—tax deferral regime
- Working for Families—abatement changes
- Working for Families—Best Start Tax Credit changes
- Student loans—indefinite freeze of the repayment threshold
- Thin capitalisation—infrastructure projects
- Discharging the Digital Services Tax Bill (funded outside Budget allowances)