New Zealand’s economy grew faster than expected in the first quarter of 2025, firming up the recovery from last year’s recession. New Zealand’s GDP decline in 2024 represented the worst economic downturn since 1991. But there have been hopeful signs of recovery in 2025, when gross domestic product (GDP) rose 0.8% in the March quarter from the previous three months, according to Statistics New Zealand data. That was faster than analysts’ forecasts of a 0.7% increase and the Reserve Bank of New Zealand’s forecast of 0.4% growth.
There are fears, however, that international events, such as a trade war with the US and conflict in the Middle East, will bring a freezing blast to bear on these delicate shoots of growth. For a country that has the same land mass as the UK, but a population 13 times smaller, it needs to be inventive to keep the economy growing. That means investors, in all shapes and sizes.
Crucial to a host of regulations passed by the New Zealand government are changes to what is being called the Golden Visas, designed to be honey traps for foreign investors. “The government is fuelling overseas investment into New Zealand with investor visas with two categories – NZD 5 million into a growth category or NZD 10 million under a balanced category,” said Adam Coleman, managing director at Neovia, a Russell Bedford International member firm. “Investment properties have had their tax incentives increased to allow for 80% of interest on residential rental properties. This is to go to 100% deductible from 1 April 2026. The prior government had reduced this to 50% tax deductible on interest on residential properties. There is also a new tax incentive boost to encourage capital purchases – a 20% one off depreciation claim on new business assets purchased from May 2025.”
It seems to be working – New Zealand’s Immigration Minister Erica Stanford has said that there has been a flood of formal interest in the new ‘golden’ visa, and that new applications under the scheme represent a potential NZD 845 million (USD 503 million) of new investment in New Zealand business.
Stanford said that there had been 189 applications in less than three months, compared to 116 submissions reported in the previous two-and-a-half years.
While a recent survey from the New Zealand Institute of Economic research indicates that overall business confidence is low, demand for accountancy services is at an all-time high. Accountants have benefited from private sector capital expenditure growth and the rising number of businesses. Despite broader economic uncertainty, demand for accounting services has remained robust in recent years, according to Ibis World research. Overall, industry revenue is expected to expand an annualised 2.2% over the five years through 2025-26, to USD 5.1 billion. This trend includes a 1.3% rise in 2025-26 as business confidence improves.
Demand has been pushed high by changes such as Mandatory Climate-Related Disclosures. “The most significant development is the implementation of the Aotearoa New Zealand Climate Standards,” said Nikita Tomlinson, director of Sudburys, a PrimeGlobal member firm. “The first reporting period for around 200 large, publicly listed companies and financial institutions began on 1 January 2024. This has created a new complex assurance and advisory field, requiring specialised skills in sustainability reporting and greenhouse gas emissions accounting.”
There have also been changes to Property Tax Rules. The current government has enacted key changes impacting property investors, which directly affect client advisory and compliance work. These changes include the phased reintroduction of interest deductibility for residential investment properties and the reduction of the bright-line test for taxing gains on property sales from ten years back to two years.
“While not new, the Department of Internal Affairs (DIA) has also maintained stringent oversight of Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) compliance for accountants.,” said Tomlinson. “Audits and reviews remain rigorous, forcing firms to continually invest in and update their compliance programmes and staff training.”
Public perception of accountants is good within the local business community. “Accountants are very much seen in New Zealand as business advisors and the demand for project work, due diligence and general advice has strengthened in the last five years,” said Coleman.
Coleman has seen greater demand for virtual CFO related work in the last 12 months, particularly from mid-market businesses that are looking to outsource a part of their finance function including advisory related work that might have previously been internally filled via a CFO or finance manager. “Businesses are seeing value in Chartered Accounting firms doing this with the skill set and being able to turn on and off the ‘tap’ as required as opposed to having full time equivalent finance staff even through the slow or lower volume season,” he said.
Accountants are shifting to more of a quality assurance role, according to Dan Henderson, CEO of MGI+MORE, an MGI Worldwide member firm. “Ultimately, we see this evolving into full advisory within the next five years,” he said. “There is an increasing need for deeper, more strategic client relationships, which calls for a team with stronger advisory capability and commercial awareness.”
Compliance fees, in general terms, are not under pressure, according to Henderson, but expectations are shifting. Clients are expecting faster turnaround times, fewer queries, and more insight – not just a set of accounts.
Of course, the dreaded skills shortage stalks New Zealand firms as well, which makes it hard to meet those client expectations. “It has been incredibly competitive to hire accounting staff, with wages in some cases increasing by 12% to 20% in a short space of time,” said Coleman. “Last year we noticed a reprieve, which has followed into this year with high calibre accounting staff looking for opportunities again with more realistic market salary expectations.”
According to Tomlinson, there are two types of accountant coming through. “We find that candidates are either those that are traditional or those that are wanting more strategic involvement with clients,” she said. “Firms who want to deliver strategic services must have a model that allows for development of these individuals, and that allows them to be constantly challenged and engaged.”
Despite, this Tomlinson said that recruitment is a challenge regionally – one third of Sudburys accountants work remotely because it is so hard to find appropriate talent locally.
Henderson finds that to fill roles, local accountancy firms have to be prepared to consider recruits from other industries. “Graduate numbers are still low, and there is a shortage of senior, qualified accountants,” he said. “To help bridge the gap, we are looking beyond the traditional, and welcoming skill sets from banking, finance and commerce to support our growing advisory work.”
Brain drain is also a problem. Salt Recruitment, which has a specialist accounting and finance section, is hopeful that in 2025 a more buoyant economy will mean New Zealand will begin to retain more of its skilled professionals, reducing the outflow of talent abroad.
Until the flow of skills abroad starts to abate, there will still be a gap in the market for 20 to 30 something qualified professionals. As previously pointed out, business confidence is low, but Salt predicts that once companies start to feel more confident and zero in on where their opportunities are, the war for talent will start again.
It is not surprising that merger and acquisition activity is beginning to pick up in New Zealand, with many firms seeing acquisition as a method for growth and acquiring skills. “That includes our firm, which has acquired five firms in the last four years,” said Coleman. “The key learnings being ensuring the right people in the right seats and having a practice manager with the skill set to run a practice. It is also vital to have the soft and relationship skills to successfully manage client relationships. Finding the balance with the right people is so important and even more important than the fee base acquisition itself.”
Consolidation is also on the increase, according to Jason Edwards, partner at HLB Mann Judd. “We are seeing two main trends,” he said. “The consolidation of smaller firms, and significant outsourcing of work to overseas companies.”
Tomlinson has seen the areas of strategic advisory, banking support, restructuring, business transformation and dynamic insights grow over the last 12 months, while according to Edwards, advisory services are in demand due to the more complex tax and business environment. Edwards has also seen the demand for auditing increase.
In the coming year, Coleman predicts that firms will start to provide more integrated services and adopt a ‘one stop shop’. “Aside from integration, specialising in industries is becoming a real key to grow practices,” he said. “Having key staff with expert industry experience is the way to win new, profitable work.”
The recession of 2024 wounded New Zealand deeply and the effects on the confidence of both consumers and businesses is still lingering. While demand may be strong and growth for the local accounting industry is predicted to be good, 2025 might need to be a quiet year. A year to focus on the building blocks for growth and getting ready for far better days in 2026.
“New Zealand braces itself for bitter international climate” was originally created and published by International Accounting Bulletin, a GlobalData owned brand.
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