The National Party’s one and only budget bribe, dressed up as the “Investment Boost,” is a shameless vote-buying scheme aimed squarely at business owners. With their new policy allowing a 20% tax deduction on new equipment purchases, National is tossing out lollies to a select few while ignoring the broader economic mess they've created and the desperate need for social investment elsewhere.Treasury and Inland Revenue estimate National's “Investment Boost", which doesn't address Trump's tariff's at all, will only increase GDP by 1% over 20 years, with half those gains in the first five. But there's a problem: the cost. National’s track record of tax cuts and business handouts for the wealthy suggests this could easily run into the billions, over the forecast period. There's also the issue of lower export earnings and the tax incentive costing an average of $1.7 billion per year in reduced tax revenue. So where exactly is the government going to find the shortfall?
The so-called “Investment Boost" is money siphoned from public coffers into private hands that could be rebuilding our crumbling health system, funding education, or tackling the housing crisis, all of which is already putting downward pressure on our economy. Instead, National’s prioritising shiny new toys for the wealthy over things like reducing the number of kids in poverty, with it's exponential costs further down the line. They're leaving our hospitals to crumble, with workers such as nurses and doctors stretched to breaking point.
Child poverty’s economic toll dwarfs any benefit from National’s tax lolly scramble. A 2024 analysis by economist Craig Renney estimates child poverty costs New Zealand $17.7 billion annually (4.27% of GDP) through lower productivity, higher welfare, and increased health and crime costs. That’s $5.1 billion in lost tax revenue yearly, enough to triple the Investment Boost and still fund our schools and hospitals. With 156,000 children in material hardship in 2023, up from 120,000 in 2022, National’s focus on the short term with business handouts over social investment is indefensible!
However, this isn’t just about skewed priorities; it’s about effectiveness. The economy’s stalled, with sluggish GDP growth and high inflation choking New Zealand since 2023. Consumers aren’t spending, and businesses, from tradies to manufacturers, are feeling the pinch. Will a 20% tax break on shiny new equipment really convince a struggling business owner hit by Trump's tariffs to splash out when demand’s flatlining? National’s banking on a trickle-down fantasy, hoping businesses will invest, hire, and pay more. But in a recessionary climate, most will simply hold tight, and not expand. The real winners? Big corporates with cash to burn on equipment, not the small-time tradie or farmer battling falling revenue, soaring rates and high interest costs.
When National took power in late 2023, they inherited an economy already under strain, but their policies have only deepened the rot. GDP growth has tanked, with a measly 0.6% quarterly rise in Q4 2024 after a 1.0% contraction in Q3. The economy shrank by 0.5% overall in 2024…hardly the “rebuilding” National had promised. Unemployment has climbed from 3.4% in Q4 2022 to 4.6% in June 2024, with projections of a peak of 5.4% in 2025. Company liquidations are up 19.3% in 2023/24, with over 2,100 businesses folding. Meanwhile, net debt has ballooned from 38.45% of GDP in 2023 under Labour to 42.6% in March 2025 under National, with forecasts of further increases. National’s response? Slash public services and throw tax breaks at the wealthy, leaving ordinary Kiwis to bear the brunt of a stagnating economy where trickle down economics has never worked.
Will their “Investment Boost" incentivise spending? No! Not when you facture in other headwinds. It probably won't even buy votes. Business owners might be tempted by the immediate tax relief, but they’re not daft. They know a stalled economy means fewer customers and less revenue, no matter how many tax breaks National dangles. Farmers and tradies, battered by global trade disruptions and local costs, might see through this as a flashy distraction from National’s failure to address the big picture. If the economy’s not working for all Kiwis, no amount of lollies or new toys for the rich will mask the bitter taste of National’s economic mismanagement.
