David Farrar: Labour promised massive tax hike on businesses

The Herald reports:

Labour will scrap National’s Investment Boost if elected – under a new plan focused on small businesses.

Investment Boost was the centrepiece of Budget 2025 and was widely promoted by the Government as an important means of attracting new investment to New Zealand. It applies to domestic and foreign investors.

National has described the move as a “$5 billion tax grab”, a reference to the rough amount Labour would have left over by ditching Investment Boost. Nicola Willis, National’s finance spokeswoman, accused Labour of ripping the money away from small businesses to fund other policies.

“Scrapping National’s $6.6b Investment Boost to fund a $1.56b fig leaf means business owners lose the incentive to invest in genuinely transformative, productivity-enhancing equipment,” Willis said.

Investment Boost allowed businesses to deduct 20% of the cost of a new asset immediately. Labour is cancelling this, which means companies that invest in new assets will face higher tax bills and worse cashflow.

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders