The Budget’s Investment Boost is  a tax incentive for businesses to invest in productive assets such as machinery, tools and equipment.

This means business can deduct 20 per cent of a new asset’s value from that year’s taxable income, on top of normal depreciation.

Because the cashflow from investment improves, more investment opportunities become financially viable and therefore more take place.

Business investment can raise the productivity of workers, lifts incomes and drive long-term economic growth.

However, businesses, following this path, need some predictability. That a reasonable investment will bring about a return. That their equipment  purchases will help their businesses grow.

I take it that by increasing the stock of capital in New Zealand, Investment Boost is expected to lift GDP by 1 per cent per year and wages by 1.5 per cent per year  over the next twenty years, with half these gains in the next five years.

Investment Boost makes New Zealand a more attractive place to invest. It gives businesses facing global uncertainty a reason to keep investing in themselves and in the future of New Zealand.

It seems that large-scale businesses with established markets can continue to build their markets.

There is also Invest New Zealand to encourage investment in infrastructure. This would be a welcome change from investment in property …let’s keep making and growing things!