Handed down at 2pm on Thursday 22 May, Budget 2025 allocated new funding of $6.7 billion per annum. Combined with the savings, reprioritisation and revenue-raising initiatives of $5.3 billion per year, Budget 2025 was delivered within a narrow operating allowance of $1.3 billion.

Investment Boost

The Government announced a new tax incentive – Investment Boost. Businesses can deduct 20 per cent of a new asset’s value from taxable income in the year of purchase

KiwiSaver

Budget 2025 included changes to Kiwisaver:

• An increase in the default rate to to 3.5 per cent from 1 April 2026 and to 4 per cent from 1 April 2028.
• Allowing employees to temporarily opt down to the current 3 per cent minimum contribution rate.
• A halving of the Government’s contribution from 1 July 2025 to to 25 cents for each dollar someone enrolled in the scheme contributes, to a maximum of $260.72.
• Extension of Government and employer contributions to 16 and 17 year olds.

Education

Education initiatives see the Budget allocate $1.5 billion to improving student achievement, including $646 million for learning support. $734 million of new capital investment is allocated for the delivery of new schools and classrooms.

Health

Over $1 billion in new capital is allocated to health infrastructure, including upgrades to hospitals across the country. Other initiatives include $447 million allocated to expanding access to urgent and after-hours care, expanding the primary care workforce, and support for a new multi-agency response to mental health distress calls.

Defence

The Government has allocated $2.7 billion of capital and $563 million of operating funding for priority defence projects, bringing the total investment in Defence to $4.2 billion in Budget 2025. This includes $1 billion of new capital investment for Defence this year and an additional $1.6 billion in 2026.