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Business South has welcomed Budget 2026 as a disciplined, growth-focused plan that puts New Zealand's finances back on track and positions the economy for a sustainable recovery.

"This is the kind of Budget business needs," says Business South Chief Executive Mike Collins. "Fiscal discipline, a credible path back to surplus, capital going into infrastructure, and a Government that understands you cannot spend your way to prosperity. After years of debt accumulation, getting the books in order is not optional. It is the foundation everything else is built on."

The return to surplus forecast for 2028-29, a year earlier than projected in December, reflects the Government's commitment to careful management of public finances against a genuinely difficult global backdrop. The Middle East fuel crisis has added pressure no government could have anticipated. The decision to hold the line on spending rather than reach for easy election-year handouts is the right call.

For Otago and Southland, Budget 2026 delivers on several fronts that matter directly to business.

Collins also welcomed a suite of practical business measures in this year's Budget, including small to medium businesses who are critical to our regional economy.

FBT compliance simplified

"The removal of detailed logbook requirements for fringe benefit tax on private motor vehicle use is a genuine compliance win for small businesses," he says. "It is the kind of sensible, friction-reducing change that does not make headlines but makes a real difference on the ground."

Membership subscriptions confirmed non-taxable

Thanks to advocacy work by Business South and BusinessNZ, the membership subscriptions and levies received by not-for-profit organisations will remain non-taxable. Inland Revenue had been moving toward a revised interpretation that would have made many membership subscriptions taxable, creating real uncertainty for chambers of commerce, industry associations, sports clubs, and community groups across the country. Budget 2026 has drawn a line under that threat.

Business South welcomes the certainty this provides for the associations and sector groups that are part of the fabric of our regional economy.


R&D tax credits accessible sooner

Changes to the Research and Development Tax Incentive mean businesses can now access their tax credits in-year, rather than waiting until the end of the tax year. For businesses investing in R&D, this is a meaningful cashflow improvement. Business South encourages members to check their eligibility.

RMA replacement: digital foundations funded

The $294 million over four years to support the rollout of the new planning system replacing the Resource Management Act is a commitment to getting the digital infrastructure right from the start. Nationally consistent data standards, shared digital services, and a centrally managed platform for planning, consenting and monitoring. A faster, clearer consenting environment is one of the things our members have consistently called for, and this investment provides the certainty that the new system will be properly resourced.

Housing growth fund for councils

The $400 million over four years to incentivise local councils to enable housing growth is another step in the right direction. Housing supply remains a constraint on workforce attraction across Otago and Southland, particularly in high-growth areas like Queenstown Lakes and Central Otago. Payments structured to reward councils that enable higher rates of growth is smart policy design.

Trades Academy places doubled

The number of Trades Academy places increases from 10,000 to 20,000 over four years, with an additional 1,000 Youth Guarantee places providing free study and work-relevant learning through polytechnics from July this year. The $15 million for Industry Skills Boards to develop new industry-led secondary school subjects, including in construction and primary industries, adds further depth to the trades pipeline.

"Building the skills pipeline is as important as building the infrastructure," Collins says. "Doubling Trades Academy places and investing in vocational pathways at secondary school level is exactly the kind of long-term thinking that regional economies like ours need."

Gas transition loans: 80% Crown-backed

The government-backed Gas Transition Loan Guarantee Scheme, with $1.2 billion in Crown-guaranteed lending at reduced interest rates, gives food processing and manufacturing operators a genuine pathway to transition off gas without taking the full financial risk alone. Business South will be working with members to understand eligibility and access.

If you want to hear directly from Ministers

Business South is hosting Hon Nicola Willis and Hon Chris Hipkins. Dates to be confirmed shortly. Keep an eye on our website for details.