We Help New Zealanders Buy Houses. Why Not Help Them Buy Businesses?
We have become very good at asking: “How do we help more New Zealanders own a home?” Perhaps the next economic question should be: “How do we help more New Zealanders own the businesses that create our jobs, incomes, exports and future wealth?”
A house can build personal wealth. A successful business can build personal wealth and create wealth for an economy. Public policy should recognise the difference.
New Zealand spends a great deal of time thinking about how to help people into their first home. That is understandable. Home ownership provides security, encourages saving and remains an important aspiration for many New Zealanders.
But there is another form of ownership that deserves considerably more attention: business ownership.
Consider the difference.
A New Zealander wanting to buy their first home may be able to withdraw most of their KiwiSaver balance after three years. They may also qualify for a Kāinga Ora First Home Loan, under which the Crown underwrites lending that can reduce the required deposit to as little as 5%.
The scale of the support is significant. In July 2026 alone, approximately $214.9 million was withdrawn from KiwiSaver for first-home purchases.
Now consider someone wanting to buy an established New Zealand business.
They might be looking at a company employing ten people, generating $2 million in revenue and producing $350,000 of annual earnings. The owner may be approaching retirement and looking for someone capable of taking the business forward.
The prospective purchaser could have industry experience, management capability, some capital and a credible plan to grow the company.
But financing the acquisition can be considerably harder than financing a house.The irony should not be lost on us.
We have developed mechanisms to help a person borrow hundreds of thousands of dollars to acquire a residential property, but comparatively little machinery to help that same person acquire a productive asset that employs people, pays tax, invests in equipment, exports, trains staff and potentially creates considerable additional economic value.
That deserves reconsideration.
Business ownership should be part of the productivity debate
New Zealand’s productivity problem is well documented.
Treasury research has found that New Zealand has relatively low capital intensity and describes the economy as “capital shallow”, while the OECD has identified deeper capital markets and greater access to long-term finance as important ingredients in improving New Zealand productivity.
MBIE made essentially the same point in July 2026 when announcing the next phase of its capital-markets reforms, noting that New Zealand’s business sector has low capital intensity compared with OECD peers and that this contributes to weaker productivity and wage growth.
Increasing investment in machinery, technology and infrastructure is certainly part of the answer.
But there is another form of capital allocation that receives surprisingly little attention:
getting productive businesses into the hands of people capable of growing them.
Thousands of established SMEs contain accumulated intellectual property, customer relationships, brands, equipment, systems, skilled employees and market knowledge.
When those businesses successfully transfer from one owner to another, that productive capability is preserved.
More importantly, a new owner frequently brings something additional: fresh capital, greater ambition, new technology, better management systems, additional sales capability or the willingness to expand into new markets.
A successful business acquisition can therefore be considerably more than a transfer of ownership.
It can be an economic growth event.
We have created a financing mismatch
The problem is partly structural.
Banks can readily understand residential property. There is a physical asset, an established market and easily comparable sales evidence.
A business is different.
Some of its value may lie in equipment and stock, but much of it often lies in goodwill, customer relationships, intellectual property and future cashflow.
Those assets can be highly productive, but they do not provide a bank with the same security as a house.
The consequence is that a perfectly viable business can generate enough cashflow to support acquisition debt while an otherwise capable purchaser struggles to provide the security required to obtain it.
This is not a new issue.
MBIE’s own Small Business Strategy previously identified the need to provide businesses with more financing options and to reduce reliance on property as collateral. It specifically recommended consideration of a credit guarantee scheme to facilitate lending to small businesses.
That principle could now be applied much more deliberately to business ownership and succession.
A New Zealand Business Ownership Loan
The first policy I would introduce would be a Business Ownership Loan Guarantee Scheme.
It would not involve the Government lending money directly.
Banks would still assess the borrower, examine the business, determine its sustainable earnings and decide whether the acquisition represented an acceptable lending proposition.
The Crown would simply guarantee a portion of qualifying acquisition lending.
There is already an international precedent.
The United States Small Business Administration’s 7(a) programme provides guarantees to private lenders and specifically allows the financing to be used for complete or partial changes of business ownership.
New Zealand could develop its own, considerably more tightly targeted version.
For example, qualifying acquisitions might require:
- an established New Zealand business with at least three years’ trading history;
- independently supportable sustainable earnings;
- a purchaser contributing meaningful equity, perhaps 15–25%;
- demonstrated industry or management capability;
- independent valuation;
- normal commercial bank credit assessment;
- a defined maximum Crown exposure; and
- the purchaser to remain actively involved in operating the business for a minimum period.
The Crown might guarantee, for example, 50% of the bank’s acquisition loan rather than the much higher guarantees sometimes used overseas.
The buyer would still have substantial capital at risk. The bank would still carry risk. The vendor would still have to justify the price.
There would therefore be no reason to abandon normal commercial discipline.
The purpose would simply be to bridge the gap created because a profitable operating business may be worth far more economically than the tangible security sitting on its balance sheet.
Interestingly, New Zealand is already using precisely this policy mechanism elsewhere. The Government’s 2026 Gas Transition Loan Guarantee Scheme allows the Crown to assume up to 80% of the default risk on qualifying bank loans so that banks can offer businesses more favourable financing terms for approved capital investment.
If Crown guarantees can be justified to help businesses change their energy systems, it is reasonable to at least ask whether a carefully designed guarantee could also help capable New Zealanders acquire productive businesses.
Create a Business Ownership Savings Scheme
I would go one step further.
Rather than allowing people to raid their retirement savings indiscriminately, New Zealand could establish a Business Ownership Savings Account alongside KiwiSaver.
People intending to acquire or establish a business could contribute to an approved account for perhaps five years.
Investment returns within the account could receive concessional tax treatment, with the accumulated funds ultimately available as equity toward purchasing or starting a qualifying New Zealand business.
Government might even provide a modest capped contribution comparable in principle to the incentives historically used to encourage long-term saving.
The message would be simple:
If you are prepared to save your own money to become a business owner, New Zealand will help you build the deposit.
We encourage people to save toward property ownership.
There is no obvious economic reason why we should not also encourage people to save toward productive ownership.
Help management teams buy the businesses they already run
There is another significant opportunity. Many excellent New Zealand businesses have experienced managers who understand the customers, employees, suppliers and operation better than almost anyone.
What they frequently don’t have is enough capital to purchase the company. A dedicated Management Buyout Guarantee could help address this.
It could allow management teams to combine:
- their own equity;
- bank funding;
- vendor finance; and
- a limited Crown guarantee.
That would be particularly useful in succession situations where the existing owner wants to retire.
Instead of selling to an overseas purchaser, closing the company or simply allowing it to decline because succession was never solved, capable employees could become owners.
That creates something policymakers regularly say they want:
greater participation in wealth creation.
Not through redistribution after wealth has been created, but by enabling more New Zealanders to own the assets that create it.
Reward the purchaser who invests after acquisition
Financing the purchase should only be half the policy. The real economic benefit occurs when the new owner starts investing.
New Zealand’s existing Investment Boost allows businesses to immediately deduct 20% of the cost of qualifying new assets, with normal depreciation applying to the remaining 80%.
I would enhance that for qualifying business acquisitions.
For the first two years after purchasing an established business, a new owner could receive a 40% Investment Boost on qualifying new productive assets.
That might include:
- automation;
- manufacturing equipment;
- computer systems;
- technology;
- commercial premises improvements;
- energy-efficiency investments; and
- other qualifying productive assets.
Importantly, I would not subsidise the purchase price or goodwill itself. Instead, we would reward what happens after the transaction.
Buy a $1.5 million business and simply operate it as before: no additional benefit.
Buy the business and immediately invest another $500,000 making it more productive: receive enhanced tax treatment. That aligns the incentive directly with the economic outcome we want.
Reduce the cost of becoming a business owner
A first-time business purchaser can also face significant professional costs before settlement: accounting due diligence, legal advice, finance costs, valuation and technical assessment.
For a $500,000 or $1 million transaction these costs are material.
A First Business Acquisition Credit could allow a proportion of qualifying professional acquisition costs, up to a sensible cap, to receive a tax credit where the purchaser acquires and actively operates an eligible SME.
Again, the purpose would not be to subsidise speculation.
It would be to reduce one of the barriers facing someone moving from:
employee → employer or manager → owner.
Develop a genuine market for SME acquisition capital
Government cannot and should not finance every business acquisition.
The larger objective should therefore be to encourage private capital into the market.
New Zealand could make it easier to establish professionally managed funds specialising in:
- SME acquisition finance;
- management buyouts;
- succession funding;
- search funds;
- minority growth capital; and
- vendor succession.
KiwiSaver funds and other institutional investors could then choose to allocate a small proportion of portfolios to diversified New Zealand private-business funds rather than requiring individuals to invest directly.
MBIE’s current capital-markets reform programme already recognises that efficient capital markets are essential to helping New Zealand businesses access investment and grow.
The missing piece is ensuring that the discussion does not stop with listed companies, IPOs and sophisticated capital markets.
There is a huge economy beneath that level. It consists of thousands of privately owned New Zealand SMEs.
This isn’t about choosing businesses over houses
None of this means we should stop helping people buy homes. A home provides security, community stability and an important form of household wealth.
But an economy also needs productive capital. Imagine two 35-year-old New Zealanders who have each accumulated $150,000. One wants to use it as the deposit on a house.
The other wants to use it as the deposit on a $1 million established business employing eight people.
Why should public policy regard the first ambition as worthy of an established financing and savings framework while largely leaving the second to solve the problem alone?
The person buying the business may go on to employ twenty people.
They may buy machinery. They may train apprentices. They may export. They may acquire another company. They may eventually sell a $5 million business to the next generation of entrepreneurs.
And along the way they will create salaries, supplier income, GST, company tax and personal income tax. That is how productive wealth compounds through an economy.
Make business ownership a national economic objective
New Zealand talks constantly about productivity. Perhaps we should talk more about ownership.
Capital formation does not only mean building another factory or purchasing another machine.
It also means putting capital into the hands of people prepared to take responsibility for productive enterprises.
A coherent Business Ownership Policy could therefore include:
- A Crown-backed Business Ownership Loan Guarantee
Allowing private banks to finance qualifying SME acquisitions without requiring every dollar to be supported by residential property. - Business Ownership Savings Accounts
Providing tax-advantaged saving toward the equity required to acquire a first business. - Management Buyout Guarantees
Helping capable managers and employees acquire businesses from retiring owners. - Enhanced post-acquisition Investment Boost
Rewarding purchasers who invest additional capital into productivity immediately following acquisition. - A First Business Acquisition Credit
Reducing the professional and due-diligence cost of becoming a first-time business owner. - SME acquisition and succession funds
Encouraging private and institutional capital into professionally managed funds financing established New Zealand businesses. - Better financial capability and acquisition education
Giving potential purchasers access to practical training in valuation, due diligence, financing, governance and business ownership before committing their capital.
The test for every initiative should be straightforward:
Does this make it easier for a capable person to acquire a sound New Zealand business without encouraging them to overpay or the taxpayer to absorb reckless risk?
If the answer is yes, it deserves serious consideration.
New Zealand needs more productive investment, more ambitious businesses and deeper capital markets. The Government’s current capital-deepening and capital-markets work recognises that challenge.
Business succession and business ownership should be part of that conversation.
