The 2025 New Zealand budget, delivered on May 22, 2025, is a significant opportunity for small businesses to invest in their growth, particularly in the digital space. With a strong emphasis on economic growth, innovation, and support for businesses, the budget includes measures that can help small businesses enhance their online presence by investing in a website or upgrading their existing digital infrastructure. Below, we outline how small businesses can leverage the budget to spend on a website and why this is a strategic move.
Understanding the 2025 Budget’s Key Initiative: Investment Boost
The centerpiece of the 2025 budget is the Investment Boost, a tax incentive designed to encourage businesses to invest in productive assets. Under this initiative:
- Businesses can deduct 20% of the cost of new assets from their taxable income in the year of purchase, in addition to normal depreciation.
- This applies to assets purchased in New Zealand as well as new and used assets imported from overseas.
- Eligible assets include productive assets like machinery, tools, equipment, and commercial buildings, but exclude land, residential buildings, and assets already in use in New Zealand.
While the budget does not explicitly list software or websites as eligible assets, software and technology tools are generally considered depreciable assets under New Zealand tax rules. This means that investments in software, web development tools, or even the hardware (like computers or servers) used to create and maintain a website could qualify for the Investment Boost.
For example:
- Purchasing new computers or servers for web development.
- Acquiring software licenses for website design or management platforms.
- Investing in cloud-based tools for hosting or managing a website.
By taking advantage of the Investment Boost, small businesses can reduce their tax liability while investing in the technology needed to build or improve their online presence.
Why Investing in a Website is Crucial for Small Businesses
In today’s digital economy, a strong online presence is no longer optional—it’s essential. Here’s why small businesses in New Zealand should prioritize investing in a website:
- Reach a Wider Audience: A website allows small businesses to showcase their products or services to a global audience, not just local customers.
- Build Credibility: A professional website enhances your business’s credibility and trustworthiness, which is especially important for new or growing businesses.
- Competitive Advantage: Many small businesses still lack a robust online presence, giving those with professional websites a competitive edge.
- Digital Transformation: The 2025 budget emphasizes the digital economy, with initiatives aimed at fostering innovation and foreign investment in digital infrastructure. This creates an environment where businesses with strong digital capabilities are more likely to thrive.
- Cyber Security: The budget also highlights the importance of cyber security, with $660 million allocated for defense modernization, including digital security. A secure, well-designed website can help protect your business from online threats, aligning with this national priority.
How Small Businesses Can Use the Budget to Invest in a Website
Here’s how small businesses can leverage the 2025 budget to invest in a website:
- Take Advantage of the Investment Boost
- What to Invest In: Consider purchasing new technology that supports your website, such as:
- Computers or laptops for web development.
- Software tools for website design and management (e.g., WordPress, Shopify, or custom web development software).
- Cloud hosting services or servers (if applicable).
- Tax Benefit: You can deduct 20% of the cost of these assets from your taxable income in the year of purchase, plus claim normal depreciation over time.
- Example: If you spend $5,000 on a new computer for web development, you can deduct $1,000 (20%) from your tax bill in the first year, plus depreciate the remaining value over the asset’s useful life.
- What to Invest In: Consider purchasing new technology that supports your website, such as:
- Explore Digital Transformation Opportunities
- The budget’s focus on the digital economy, including $65 million for foreign investment in digital infrastructure, signals a growing demand for digital services. Small businesses with a strong online presence are well-positioned to benefit from this trend.
- Consider expanding your website to include e-commerce capabilities, as more consumers are shopping online.
- Consult with Tax Professionals
- While software and technology are generally depreciable, it’s important to confirm which specific assets qualify for the Investment Boost. Tax rules can be complex, so consult with an accountant or tax advisor to ensure you’re claiming the deduction correctly.
- They can also help you identify other potential tax benefits or grants that might be available for digital investments.
- Prioritize Cyber Security
- With the budget’s emphasis on cyber security, investing in a secure website is not just a good business move but also aligns with national priorities.
- Look for web design services that offer secure hosting, SSL certificates, and regular security updates.
- Stay Informed About Future Grants or Programs
- While the 2025 budget does not introduce new digital-specific grants for small businesses, it’s worth monitoring government announcements for any additional support programs. For example, Callaghan Innovation, which previously offered grants for research and development, may still have relevant programs despite its wind-down.
Steps to Get Started
If you’re a small business owner looking to invest in a website, here’s what you can do:
- Assess Your Current Online Presence: Evaluate your current website (if you have one) and identify areas for improvement, such as design, functionality, or security.
- Plan Your Investment: Determine what technology or tools you need to build or upgrade your website. This could include hardware, software, or professional web design services.
- Check Eligibility for Investment Boost: Confirm with your accountant which assets qualify for the 20% tax deduction.
- Budget for the Investment: Factor in the cost of new assets and the tax savings from the Investment Boost.
- Engage a Web Design Agency: If you’re not tech-savvy, partner with a reputable web design agency like Kiwi Web Design, which specializes in helping small Kiwi businesses go online.
- Monitor Government Updates: Keep an eye on the official budget website (Budget 2025) for any additional guidance or programs that may become available.
Conclusion
The 2025 New Zealand budget presents a golden opportunity for small businesses to invest in their digital future. By leveraging the Investment Boost, small businesses can reduce their tax burden while upgrading their technology, including the tools needed to build or enhance their websites. In an increasingly digital economy, a professional website is not just an expense—it’s an investment in growth, credibility, and competitiveness.
Don’t miss out on this chance to strengthen your business’s online presence. Consult with your accountant, explore your options, and take action today to make the most of the 2025 budget.