Is Investment Boost working? How NZ businesses responded in the first year

Investment Boost was introduced in 2025 to encourage businesses to bring forward spending on assets and capital investment. A year on, Inland Revenue's early data gives a clearer picture of how it's actually being used in practice.  

While some businesses are already using the policy to bring forward purchases or adjust how they invest, others haven't seen much immediate impact, either because of how their costs are structured or because they're not making capital decisions right now.  

In most cases, it comes down to the kind of spending the business makes and whether there was already purchases planned in the first place.  

Inland Revenue's survey of over 800 businesses gives an early view of how firms are responding to the policy. 

Data showed that while Investment Boost is influencing behaviour, the impact is still modest.

Among respondents, there appeared to be a large visibility gap, with 36% of businesses reporting limited awareness of how the policy works. This means a portion of the market is not yet in a position to make use of Investment Boost at all.

Of those who knew about the policy, 18% reported not being in a position to make use of Investment Boost.

Respondents who had some awareness of the policy and had engaged in recent investment spending (over the 12 months prior) represented a core sub-group of 46% of total survey responses. From that group, 58% had either claimed or planned to claim the Investment Boost deduction. In terms of the actual impact of the policy, 40% reported it had a positive impact on their investment spending, but only 11% reported it had a significant impact.

When thinking about future spending (over the next 5 years), 49% of those who were aware of the policy say it’s shaping future business decisions. This points to many businesses factoring it into plans rather than acting on it immediately.

The variation in responses comes down to how businesses are set up and their existing plans.

For those already planning to spend on equipment or other capital assets, Investment Boost is easy to act on.

For others, the conditions simply aren't there. If business spending is mostly on wages or services, there's little that falls within the scope of the policy. Other reasons include tough economic conditions, assets only purchased as needed (rather than due to a specific policy), and a perceived lack of material benefit in moving a tax deduction forward.

That's why the response looks uneven. The policy hasn't created entirely new behaviours so much as it has shaped decisions that were already on the table. 

The survey shows some businesses are bringing forward purchases. Before doing the same, it's worth checking how the numbers stack up in your situation.  

Some things to consider include:

Investment Boost can improve the outcome of a decision, but it doesn't change the fundamentals behind it.  

If there is already an asset purchase on the cards, it's worth checking how the timing affects your tax position and whether bringing it forward makes sense alongside your current cash flow. In some cases, the benefit is clear. In others, the cost of acting early may outweigh it. 

Where there is uncertainty, the detail matters. Small differences in profit, timing, or how an asset is treated can change the outcome.  

For Beany clients looking at making a capital purchase, your accountant can help you understand how Investment Boost applies to your situation and whether acting early actually improves your overall position.