New Zealand First has pledged to slash the company tax rate for small and medium-sized businesses from 28% to 20% for firms with a turnover below $30 million. The policy carries an estimated initial annual cost of $1 billion, which the party argues will be more than covered in the medium term through broader economic growth and increased corporate participation.
Policy Details and Projected Costs for Small Businesses
Under the proposed election campaign policy, the tax reduction applies directly to businesses operating with a turnover under $30 million. NZ First stated that the initial annual cost of $1 billion would be offset over the medium term. According to the party, this financial recovery would be achieved because “more companies collectively paying a lower tax rate, higher employment, a growing economy, and more spending” would boost overall revenue.
An NZ First spokesperson described the shift as “a much-needed bold step to encourage more investment by our small businesses that will create higher productivity, expand their business, and employ more New Zealanders.” The party further noted that corporate taxes can hinder productivity, particularly within entrepreneurial and innovative sectors. Lowering company tax rates aims to improve long-run productivity growth, stimulate the creation of new companies, leave additional cash available for reinvestment, and reduce reliance on bank debt.
Broader Economic Strategy and International Models
The party maintains that New Zealand must catch up to key competitors to ensure it remains a favorable growth environment for innovative businesses that create productivity and employment.
The announcement arrives as tax reform emerges as a centerpiece of the election cycle, with public attention heavily focused on the cost of living and the broader economy. Labour has campaigned on introducing a Capital Gains Tax, while National and Act have both promised no new taxes if elected. Meanwhile, Te Pāti Māori has proposed five new taxes—including a wealth tax and an income rate shake-up—and the Green Party has also proposed a wealth tax alongside increased scrutiny on money sent out of New Zealand. The Opportunity Party has similarly outlined a broad tax plan encompassing rural and urban land alongside an income tax increase.
Potential Economic Impact and Future Outlook
