Making Sense of Budget 2025: What It Means for Your Money

Budget 2025 has landed, and with it, a sharp focus on doing more with less. Branded as a back-to-basics budget, this year’s announcement signals a disciplined approach to spending, with targeted support in areas that matter most: healthcare, education and the economy.

Whether you’re planning your next career move, growing a business or making sure your retirement savings are working hard, the Budget can have a flow-on effect. Let’s unpack what’s changed, what it means for you, and how to stay financially confident in the year ahead.

Budget 2025: The Key Moves

Here are the big takeaways:

• Education receives $747 million focused on learning support and helping kids with additional needs get the resources they need.
• KiwiSaver contributions are on the move with both employer and employee rates gradually increasing from 3% to 4% between 2026 and 2028.
• KiwiSaver government contributions are being reduced halving from $521 to around $260 annually and will no longer be available to individuals earning over $180,000.
• Tax relief for businesses new asset investments can now qualify for a 20% tax deduction to encourage productivity and growth.
• Healthcare receives a $5.5 billion funding package but much of it is targeted, with expanded urgent care, aged care transitions, infrastructure upgrades and cancer treatment funding, rather than universal access improvements.
• Overall operating spending is tightly capped at $1.3 billion the lowest new spend in over a decade.

What It Means for You

For Families

While broad new benefits are limited, targeted investment in education could make a real difference, particularly for families with children who need extra support.

There’s also great news for teens. 16- and 17-year-olds are now eligible for the annual KiwiSaver government contribution, provided they’re enrolled and contributing. If you’ve got young people starting their financial journey, this is a powerful way to get them into good savings habits early, with a bit of help from the government to boot.

For Business Owners and the Self-Employed

This year’s Budget includes a standout incentive for growth. Businesses can now deduct 20% of the cost of new asset purchases like machinery, tools or tech directly from their tax bill. It’s a smart move to encourage reinvestment and productivity, especially helpful for those ready to expand or modernise.

If you’re considering commercial property, tread carefully. While the 20% deduction might look attractive, it’s likely to be clawed back later through depreciation recovery on sale. In other words, the benefit is only temporary unless you hold the asset long term.

It’s worth checking in with your accountant or adviser to understand how this applies to your specific situation and whether the timing stacks up.

It’s also worth checking whether this changes how and when you make business purchases or upgrades.

For Retirees

Superannuation remains unchanged. However, enhanced healthcare funding might mean faster access to treatment and better services, which could be a meaningful shift for many.

For Young Adults and Students

Improved support in education may help open doors, especially for those with learning challenges. Over time, this could lead to better opportunities in work and training. And with KiwiSaver contribution rates set to increase from 2026, it’s a good time to take stock of where you’re at and where you want to go.

A Real-Life Look: Meet Jordan

Jordan, 45, is self-employed with two teenagers and a growing trade business. He’s got one eye on his retirement plan and the other on his monthly expenses.

After the Budget, Jordan notices:

• KiwiSaver contribution changes coming down the line
• A new opportunity to claim a 20% tax deduction for business assets

He checks in with his adviser and ticks off a few smart moves:

• Updates his income projections and tax settings
• Considers early KiwiSaver contribution changes
• Reassesses business investment plans in light of the new tax break

It’s a quick check-in but gives Jordan peace of mind and a clear plan for the year ahead.

Your Post-Budget Plan: Five Things to Do Now

Here’s a simple checklist to help you stay on track:

• Check your tax settings - Are you on the right code? Could you benefit from new credits or deductions?
• Review your KiwiSaver - With rates changing soon, this is a great time to ensure your KiwiSaver is aligned with your financial goals.
• Revisit your budget - Update your figures based on any changes to income, spending or entitlements.
• Speak with your adviser - Especially if you’re self-employed, investing or approaching retirement.
• Build in some wriggle room - A financial buffer or emergency fund can make all the difference.

Let’s Navigate the Budget Together

Budget announcements might feel a bit out of your control, but what you do next isn’t. With the right advice, you can turn policy changes into financial opportunities.

Want to see what Budget 2025 means for your plans? Book a 15-minute check-in with a Lifetime adviser and we’ll help you focus on what matters most.

Get in touch today and we can help you take the next step with confidence.

Disclaimer: This article has been prepared for the purpose of providing general information, without taking into consideration any particular person's objectives, financial situation or needs. Any opinions contained in it are held by the author as at the report date and are subject to change without notice.