From NZ Manufacturer, September 2025 edition

 

By Sean Doherty

Following on from my article, “New Zealand is Poor Because It Chooses To Be,” I have had numerous conversations with friends and manufacturers about the Government’s role in innovation, productivity, and manufacturing.

I would like to note that I have left Government service, and the views and guidance I share below are my own. However, they are informed by over 20 years of experience working closely with manufacturers, including the last five years within Government, and the good fortune of gaining a global perspective on interventions other Governments have made to increase manufacturing productivity and longevity.

Should the Government take action to help manufacturing?

One could argue that the Government already has a lot on its plate, with health, education, police, and infrastructure dominating the headlines, while investing in the future prosperity of the country often seems more challenging.

However, it is globally recognised that a strong manufacturing sector is a cornerstone of a dynamic, resilient, and competitive economy. It underpins employment, exports, productivity, and innovation.

To put this in the New Zealand context: manufacturing directly employs about 11% of the workforce and contributes approximately 10% to GDP.

In 2024, business spending on Research and Development (R&D) reached a record high. However, despite this investment, we are seeing productivity flattening, which squeezes business margins and makes it difficult for businesses to invest in growth and their people.

What does the Government support today?

While the Government supports numerous business programs, below are some recommendations for manufacturers.

I suggest engaging with these initiatives and understanding how they might fit into your plans, so you can invest your time wisely and potentially benefit both your business and the wider industry.

Advanced Manufacturing Aotearoa (AMA)
This is the only direct investment from the 2025/26 budget focused on manufacturing. AMA is a small, industry-led nationwide organisation dedicated to the success of manufacturers.

It plays an important role as a connector and facilitator by offering practical advice to manufacturers and acting as a conduit between Government and industry.

Regional Partner Network (RBP)
Available to all registered businesses, this service offers free advice and is well worth connecting with if you have fewer than 50 full-time employees.

The network is also known for its Management and Capability Development Subsidy Grant, which can cover 50% of training costs up to $5,000 in areas such as lean manufacturing, business operations, business planning, finance, and other management training.

Business.govt.nz
This is the Government’s one-stop online hub for business advice, especially useful for small business owners. It offers excellent resources such as e-learning modules and guides on how to write a business plan or optimize a business process by mapping it end-to-end.

Investment Boost tax deduction 

Introduced as part of Budget 2025, the Investment Boost is a new tax deduction aimed at encouraging business investment.

It provides an upfront tax benefit, allowing businesses to claim an immediate 20% deduction on qualifying new assets put into use on or after May 22, 2025. The remaining 80% is depreciated over time. Most new depreciable business assets qualify, including commercial and industrial buildings.

R&D funding
Although Callaghan Innovation is being disestablished, all R&D grants and funding are moving to the Ministry of Business, Innovation and Employment (MBIE).

Popular schemes such as the Ārohia Evidence Grant, New to R&D Grant, R&D Tax Incentive (RDTI), and student grants continue to exist.

Notably, the Callaghan Innovation Biotech team is being integrated into the Bioeconomy Science Institute, a collaboration with AgResearch, Landcare Research, Plant & Food, and Scion.

However, the applied sciences teams at Callaghan Innovation have been disbanded.

EECA (Energy Efficiency and Conservation Authority)
EECA provides industry-specific support focused on improving energy efficiency, sustainability, and lowering operational costs.

New Zealand Trade and Enterprise (NZTE)
If you are entering the export marketplace, you are likely aware of NZTE’s strengths. Their services range from online upskilling resources to personalised support from customer managers with expertise on target export countries.

My challenge to all manufacturers is to pick one or two of the entities mentioned above and reach out to them this month. Find out what they do and how they might help free up your time so you can focus on working on your business, not just in your business.