Signs of renewed energy in Plant and Equipment finance market
Plant and Equipment Finance in New Zealand: Turning the Corner in 2025 (Recent article in the September issue of Joiners Magazine)
The plant and equipment finance market in New Zealand is showing signs of renewed energy, with a unique combination of government incentives, cheaper borrowing, and a growing pipeline of work starting to shift the mood in workshops and boardrooms alike. After several years of recession and slow demand, the landscape for investment is looking far more inviting.
One of the biggest catalysts is the Government’s Investment Boost, introduced on 22 May 2025. This change allows businesses to immediately expense 20% of the cost of qualifying new—or new-to-New Zealand—assets, including woodworking machinery, vehicles, and even commercial buildings, with the remaining 80% depreciated in the usual way. For a joinery firm investing in a $150,000 CNC machine, that’s a $30,000 tax deduction straight away, plus depreciation benefits in the years ahead. The goal is simple: free up cashflow and encourage businesses to bring forward investment decisions that might otherwise be delayed.
The monetary policy environment is also lending a hand. Since August 2024, the Reserve Bank of New Zealand has made six consecutive Official Cash Rate cuts, bringing the OCR from 5.5% to 3.25%—a level last seen three years ago. This dramatic easing has flowed directly into lower commercial lending rates, making it more affordable to finance machinery upgrades, workshop expansions, and fleet replacements. For many businesses, the numbers now work where they didn’t just a year ago.
While economic conditions remain uneven, there are clear green shoots emerging. GDP growth returned in late 2024 and has carried into 2025, export prices remain healthy, and confidence indicators are showing early signs of life. For the woodworking sector in particular, there is a notable wave of work sitting in the pipeline. Architects, designers, and builders are busy with plans that are yet to hit the construction stage, meaning the real lift in orders for joiners and cabinetmakers may unfold gradually over the next 12 to 24 months rather than arriving all at once.
Regulatory change is another important factor. The Government is working to strip back elements of the Resource Management Act (RMA) that have long slowed project approvals. Easing consent requirements for small-scale builds—such as granny flats—is one of the headline reforms, and while that’s a housing story on the surface, it has a direct ripple effect into trades, cabinetry, and fit-out work. Faster consents mean more projects breaking ground sooner, which in turn brings forward demand for plant, equipment, and skilled labour.
For woodworking businesses, these shifts create a very different set of conditions compared with the leaner years just passed. Lower borrowing costs, upfront tax deductions, and fewer regulatory bottlenecks open the door for long-overdue investments in efficiency and capability. This could mean upgrading to faster cutting and edging machines, improving dust extraction and finishing systems, or expanding capacity to take on larger commercial contracts.
It’s also worth noting that the pipeline of work is unlikely to be a short-lived spike. Because much of it is still in the design or consent stage, the demand curve may be steadier—giving workshops more time to scale up in an orderly way. This reduces the risk of over-committing resources and allows for more strategic equipment purchases, often with the benefit of finance structures tailored to seasonal or project-based cashflows.
Overall, 2025 feels like a turning point. The combination of fiscal incentives, interest rates returning to three-year lows, and a government actively clearing away red tape creates a more investment-friendly environment than we’ve seen in years. While uncertainty will always be part of business planning, the balance of factors is now tilted firmly toward action rather than caution.
