Budget 2025 has delivered a landmark initiative that could signal a turning point for New Zealand’s freight and transport sector. National Road Carriers (NRC) strongly supports the government’s new Investment Boost tax incentive and sees it as a practical, forward-thinking measure that could be the catalyst for long overdue modernisation across our industry.

At its core, Investment Boost allows businesses to immediately deduct 20% of the cost of eligible new assets – including vehicles, machinery and commercial buildings – from their taxable income in the year of purchase, over and above standard depreciation. For transport operators, that means meaningful tax savings when upgrading trucks, expanding warehouse capacity, or investing in logistics technology. In an industry where capital costs are high and margins are often tight, this policy could provide the breathing room and financial incentive businesses need to act now, rather than delaying investment.

This is not just good for business, it’s good for the country. Treasury projections estimate that this initiative will increase New Zealand’s GDP by 1%, wages by 1.5%, and capital stock by 1.6% over the next two decades. Half of these gains are expected within the first five years. Such figures underscore how pivotal investment is to long-term economic resilience. By incentivising companies to reinvest in productive assets, the government is enabling real, on-the-ground change in how our economy operates and grows.

For the freight and transport industry, which is the backbone of domestic trade and a vital link in every supply chain, this couldn’t have come at a better time. Operators across the country are facing escalating costs – from fuel to compliance – and battling infrastructure constraints that make delivering goods less efficient than it should be. Add to that the urgent need to decarbonise fleets and upgrade to cleaner, more sustainable technologies, and it becomes clear that Investment Boost offers more than tax relief; it offers a clear path to transformation.

Let’s consider a practical example. A transport firm investing $500,000 in a new set of Euro-6 compliant trucks – a substantial upgrade in emissions standards and fuel efficiency – would be able to claim an additional $100,000 tax deduction in the year of purchase, alongside regular depreciation. That might translate to over $28,000 in tax savings. These aren’t theoretical benefits, they’re tangible incentives that could tip the scales for operators considering whether they can afford to invest in modern, cleaner fleets.

Equally important is the inclusion of new commercial buildings in the scheme. This marks a departure from previous tax rules, which excluded depreciation deductions for commercial buildings altogether. For freight depots, warehousing and logistics hubs, where space and efficiency are crucial, this opens up real opportunities for expansion and technological upgrades. With better facilities come streamlined operations, reduced costs and improved service levels across the freight chain.

NRC believes this policy is not only economically sound, it is also equitable. Unlike a general company tax cut, which provides a uniform benefit regardless of reinvestment, Investment Boost rewards action. It favours the doers – the businesses ready to grow, adapt and modernise. In this way, it channels government support towards productive activity that generates long-term value for workers, customers and the economy as a whole.

The $6.6 billion cost of the scheme over the forecast period is not insignificant. But we believe this is a strategic investment in our future productivity. The alternative – continuing to limp along with ageing fleets and underperforming infrastructure – is far costlier in the long run. By investing now, the government is seeding the conditions for stronger, more resilient supply chains and a more competitive national economy.

NRC commends the government for this bold move. We urge our members to take full advantage of the opportunity. Whether it’s upgrading a fleet, expanding a depot or embracing new logistics software, now is the time to act. This is not just a tax break, it’s a chance to move our industry forward.

Let’s make it count.