“I’ll keep it real simple because investment boost means cheaper tractors,” he said.
“It means cheaper utes. It means cheaper plant and equipment for manufacturers and wine makers and tourism operators, and start-ups.
“It means fostering the investment New Zealand businesses need to lift productivity, to increase wages, to boost exports, and to get even more competitive on the global stage.”
On Saturday, the Prime Minister said on social media that farmers and tradies were telling him they were buying new equipment over the weekend because of the boost.
Tractors and Farm Machinery Association data showed 2800 tractors were sold in New Zealand through 2024, down 18% on the year prior.
But association president Jaiden Drought said recent field days events like the South Island Agricultural Field Days in Kirwee showed rural confidence had improved following a few tough years, but sales in recent months had slowed.
“[2025] started off with a bit of a hiss and a roar, and everyone thought that the shackles had been taken off after a tough 12 to 18 months.
“But we’ve seen a little bit of a flat spot just in the last couple of months, probably more so around the lingering effects of the drought.”
Drought said machinery was a significant capital purchase for farmers, and prices generally have risen by about 30% in five years.
“Commodity prices are high, but they haven’t really seen that flow through to their bank accounts just yet due to higher feed costs to either get cattle through the drought or keep them in milk.
“So certainly the second half of the year, all things considered, looks a lot stronger.”
Drought said the boost could be “the carrot” that will hopefully lead to more tractor purchases.
Southland sheep and beef farmer Ben Dooley of Wyndham said he spent $25,000 on equipment right before the announcement was made, though he said that was small potatoes compared to the cost of a new tractor.
“I’m really happy that it’s there, I’m also really frustrated about it, because – nothing big – but I’ve had a few purchases this season,” he said.
“All second-hand stuff, sprayer, fert spreader, farm ute, they were all bought before the date, so I don’t get that on them, but we’ll still get to depreciate them over time.”
Dooley said the boost was a “great initiative”, particularly for those farmers who had “put off” the big ticket items like tractors.
“We know machinery dealers and your general wholesale retailers in the rural space, particularly, are having a bit of a hard time at the moment because farmers haven’t been spending.
“All of a sudden, sheep farmers and dairy farmers have had quite a reasonable season compared to what has been in the past, and there are some people that are wanting to purchase stuff, but at the same time, there’s a lot of us that didn’t pay a lot of or no tax last year because of either reduced income or in a lot of our situations, massive losses.”
The Government announcement said an investment boost was expected to lift GDP by 1% and wages by 1.5% over the next 20 years.
– RNZ
