With Budget 2025 looming, the issue of taxation always rears its head. Finance Minister Nicola Willis has remained tight-lipped on the specifics, but some signals suggest corporate tax might at least be on the table for discussion. Whether that translates into meaningful action in this year’s Budget is another story altogether.

If the Government is serious about growing the economy, boosting productivity, and attracting global capital, there's a far more strategic lever to pull: a sharp cut to the corporate tax rate—down to 17%.

That’s not a typo. Seventeen percent. Not a modest tweak, not a phased drop to 26%. A clear, bold move that puts us in the same league as Singapore, undercuts Australia, and sends a loud message that New Zealand is open for business.

Why 17%?

Right now, our corporate tax rate sits at 28%. That’s high by international standards, and it’s beginning to show. As other economies trim their rates to compete for mobile capital and skilled businesses, we’re standing still—and paying the price.

A cut to 17% wouldn’t just make headlines. It would materially shift the economic incentives for investment, innovation, and reinvestment in New Zealand. It would give us a point of difference in a region crowded with competitors. And it may even help shift the focus from property speculation to productivity.
This isn’t about giving handouts to fat-cat multinationals. It’s about unleashing growth, creating jobs, and giving New Zealand firms the after-tax breathing room to expand.

The Benefits: Real and Immediate

1. Capital Attraction: Multinational firms have choices. Head offices, data centres, logistics hubs—these don’t land in countries with high taxes. A 17% rate would turn heads in boardrooms from Sydney to Singapore to Seattle. We’d no longer be the expensive cousin in the South Pacific.
2. Domestic Investment and Productivity: New Zealand has long suffered from underinvestment in capital and tech. A lower company tax rate increases the post-tax return on investment, which can shift board-level decision-making in favour of long-term asset building over short-term cost-cutting.
3. Wage Growth and Hiring: The more capital businesses have access to, the more likely they are to hire, upskill, and grow. This is especially critical in a tight labour market where productivity has to do more of the heavy lifting.
4. Simplicity and Global Alignment: At 17%, we’re aligned with Singapore and in striking distance of the OECD’s new 15% global minimum. We’d be seen as forward-thinking, not desperate.

The Cost Question

Let’s be clear: cutting the corporate rate to 17% would cost the Crown a chunk of revenue—on paper. But that static analysis misses the secondary effects. With a more competitive tax regime, we’d likely see increased corporate activity, higher declared profits, and stronger business reinvestment.

More importantly, we need to ask what the cost of not cutting the rate is. How much growth are we forgoing? How many investors are we losing? How many Kiwi firms are staying small because the tax environment doesn’t reward expansion?

If we want to grow our tax base in the long run, the smart play is to grow the economy now.

The Politics

Yes, a 17% rate would be politically bold. But it could also be framed as a long-overdue reset. Our 28% rate hasn’t budged in nearly 15 years, even as the world has changed dramatically. If we're willing to change the bright-line test, overhaul interest deductibility, and shake up public sector spending—why not fix a tax setting that’s stuck in the past?

The Government already has cover. ACT has been vocal about the need for a flatter, lower-tax economy. National wants growth and investment. NZ First is keen on regional revitalisation, which a lower company tax rate could help support. The political stars are not perfectly aligned, but perhaps they’re close enough?

What About Fairness?

Critics will argue that cutting the corporate tax rate helps the wrong people. But the real unfairness is leaving New Zealand businesses overtaxed and undercapitalised—and failing to create an environment that attracts foreign capital, expands our economy, and gives our young people a reason to stay here.

Fairness means creating an environment where businesses can grow and hire. Where investment is rewarded. Where we stop relying on bracket creep, GST, and rising council rates to fund our fiscal gaps.

A 17% rate isn’t about ideology—it’s about strategy.

The Bottom Line

New Zealand needs a circuit-breaker. Tinkering won’t cut it anymore. If we want to grow faster, attract more capital, and build a productive economy, we need to match our tax policy to our ambition.