Published on the 18/06/2025 | Written by Heather Wright
Tax incentive benefits…
The New Zealand government’s Investment Boost program looks set to bolster small and mid-sized business’ technology.
A survey by MYOB of more than 500 SMB owners and decision makers, shows 12 percent say the policy means they’re changing their plans around new assets ‘considerably’ while nearly half say they might change their investment plans. Forty-five percent are planning to make their first asset purchase leveraging the Investment Boost within six months – and many planning to do so within three months.
“Accelerating SMEs digitalisation presents a major economic opportunity with the potential to boost NZ’s GDP by up to $8.6b in 2025.”
The program, introduced in the Budget earlier this year, enables businesses to deduct 20 percent of a new assets value from that year’s taxable income, on top of normal depreciation, and is designed to drive further investment by SMBs.
Topping the list of new assets to purchase are passenger vehicles (31 percent), new office technology (28 percent) and digital devices (22 percent).
The median spend of those surveyed sits at $37,700, though for one in 10 businesses surveyed, the budget will be between $80,000 to $100,000, with 12 percent estimating they’ll spend between $100,000 and $200,000.
The businesses surveyed say they’re looking for productivity gains from any new purchases, with the survey finding most (35 percent) are looking for increased outputs or production, while 31 percent expect to save time on key tasks and 23 percent are looking to reduce manual tasks through automation.
Greater digitisation has long been held up as a means to improve New Zealand’s lagging productivity levels.
Last month a Xero report, developed in conjunction with the New Zealand Institute of Economic Research, claimed SMBs get productivity returns ranging from $2.40 to $3.10 for every dollar they invest in digital tools, with even modest digital upgrades generating meaningful economic benefits.
Going Digital in 2025: The Economic Benefits of Digital Tools says accelerating SMBs digitalisation is a ‘major economic opportunity’ with the potential to boost New Zealand’s gross domestic product by up to NZ$8.6 billion in 2025.
“While many New Zealand SMEs have adopted basic digital tools, the uptake of advanced technologies such as AI, cloud enterprise solutions and digital platforms remains uneven,” the report says.
“Addressing capability gaps, cost barriers and skills shortages will be critical to fully realising the benefits of digitalisation.”
Bridget Snelling, Xero country manager for New Zealand, says embracing digital tools such as AI, cloud computing and data analytics enhances innovation, can expand market reach and strengthens resilience in times of uncertainty.
“Small business digitalisation helps break down barriers of distance and market size, unlocking local and global opportunities and enhancing efficiency in an increasingly competitive world,” Snelling says.
Professional accounting body, CPA Australia’s Asia-Pacific Small Business Survey highlighted that New Zealand small businesses have much lower levels of online sales, social media engagement and adoption of technologies such as business intelligence software and AI compared to counterparts elsewhere in Australia. They also report limited adoption of new digital payment options.
One reason for the low investment in technology, at least according to those surveyed for the CPA report, is poor short-term returns. Just 22 percent of the Kiwi respondents reported that their technology investments last year improved their profitability – the lowest result among all the 11 APAC markets surveyed.
In Australia – another lagging market for SMB tech adoption, based on the CPA results – 26 percent reported their investments in technology improved their profitability. That puts the two countries, which also tend towards an older demographic profile for SMBs, at the bottom of the pile for reporting profitability gains from their tech investment in 2024 – and not by a short amount either. Nex closest were Singapore at 45 percent and Taiwan at 46 percent.
Australia also recorded low online sales, with just 39 percent earning more than 10 percent of revenue online, making the two countries the lowest performers in the category, and 32 percent saying they didn’t use social media for business purposes. Australian businesses, however, were more likely to embrace digital payment technologies, with 49 percent receiving more than 10 percent of sales that way and the abundance of well-established technologies such as Eftpos, may explain some of the reluctance for newer offerings.
The CPA Australia Asia-Pacific Small Business Survey 2024-25 identified that among the characteristics of high-growth small businesses were making online sales, use of new payment technologies such as PayPal, Apple Pay and Buy Now Pay Later, to receive sales and use of social media to learn about customers and potential customers, monitor competitors and sell online.
Also seen among high-growth small businesses were making tech investments that were significantly more likely to quickly improve profitability, and protecting their business from cyberattacks.
Getting SMBs digitalised, however, remains a challenge.
Governments around the world have introduced initiatives to drive SMB digitalisation and growth.
Finland has launched initiatives offering grants of up to €50,000 for piloting digital projects, focusing on cloud computing, cybersecurity, and AI, alongside targeted support and skills development, while the Netherlands is providing financial incentives and sector-specific programs. Canada’s Digital Adoption Program provides grants and loans for eCommerce and digital advice, Singapore also has structured guidance and financial incentives and South Korea’s Digital New Deal invests in infrastructure, smart factories and AI.
Snelling says New Zealand needs collaboration between industry and government to overcome the challenge for small businesses.
The NZIER report calls for a targeted, coordinated strategy to accelerate digitalisation, including providing scalable grants or matched fundings to reduce the cost of digital adoption, providing a national network of accredited digital advisors to help SMEs with their digital transition, and investment in SME focused digital innovation hubs and field labs to foster experimentation and collaboration,
It has also called for greater sector focus for digitalisation programs along with high-potential industries, such as agritech, tourism and manufacturing, better skills development, integrating digital capability building into workforce training and tertiary education frameworks; tracking of digital maturity and reforming and formalising the Small Business Advisory Group, using the UK’s SME Digital Adoption Taskforce as ‘a useful precedent’.
The taskforce is a government-industry partnership aiming to identify barriers and co-design effective strategies to accelerate SME digitalisation and boost national productivity.
