2026-07-25

NZ R&D Tax Incentive Passes $10 Billion, Supporting Software Innovation

Summary

New Zealand’s R&D Tax Incentive has supported more than $10 billion in business research and development. The latest application round attracted record participation, particularly from small businesses. The milestone could support greater investment in Auckland-developed software, enterprise applications and technology products.

Our Analysis

• We see this milestone improving the business case for proprietary software and product development.
• Earlier tax-credit payments could ease cash-flow pressure for smaller Auckland engineering teams.
• Our sector should translate R&D support into exportable platforms, not only client-specific implementation work.

Full Story

New Zealand’s Research and Development Tax Incentive has supported more than $10 billion in business R&D activity, marking a significant milestone for the country’s innovation economy.

Announced by Science, Innovation and Technology Minister Penny Simmonds on 21 July, the milestone highlights the growing role of public support in helping companies develop new products, technologies and commercial capabilities. The latest application round also recorded the highest number of new businesses joining the scheme since 2021, with small businesses accounting for most new enrolments.

For Auckland’s custom software development sector, the development strengthens the funding environment for firms building proprietary platforms, workflow systems, data products and enterprise applications. It may also encourage more businesses to move beyond software implementation and invest in technology development that creates defensible intellectual property and export potential.

The Government said an independent evaluation found that every dollar of R&D support generated an estimated $1.40 in additional business R&D investment. As part of Budget 2026, in-year payments will be introduced to give eligible R&D businesses earlier access to tax credits and improve cash flow.