I've been thinking a bit about National's "investment boost", the centrepiece of its dogshit budget. Its pitched by the government as encouraging big capital investments which will create jobs for the future. But I don't think there's much chance of that. The problem is that the policy just won't last long enough for that sort of investment.
The first reason for this is politics. We're due an election in the next 18 months - maybe sooner if the increasingly irritable Winston throws a tanty when Rimmer takes his job - and at best its a crap-shoot for National (and those odds will only have gotten worse after they stole $13 billion from women). A future Labour-Green government may toss the whole policy simply to make fiscal space for their own policy choices. At the least, they'll limit it to promote better investment, and rip out the bits promoting mining, fossil fuels, and farming, because they don't want to subsidise them. The second is that poor policy design means there is no cap to government exposure for this depreciation, meaning it runs the risks of a huge cost blowout and turning into another film subsidy disaster. So even if National somehow clings to power, they'll need to change it to stop the financial bleeding. They'll be slow about it, because they won't want to admit they made a mistake, but eventually it'll have to be limited, probably after three or four years.
What does that mean for the policy? Most obviously, it is not going to result in the sorts of big new capital investment National is talking up, because there's simply no time to get something conceived, designed, consented, and built (and so paid for) before the tax break gets changed. Planning a big, multi-year project around this tax break is a great way to lose money (though people may plan in hope, then shelve projects and whine for a handout when the inevitable happens. NZ businesses apparently love whining, and its almost as if that is their real business model).
So what will we get? Small, quick, cheap stuff. Utes and computers, obviously, which don't really do shit to boost productivity, and are effectively consumer spending for businesses. National is probably hoping that that might give them a quick economic juice before the next election so they can say "things are getting better". For bigger projects, it'll be either short planning cycle stuff - again, small and quick - or stuff which is already consented and planned for, which can be brought forward. And on that front, there's an obvious type of project which has plenty of pre-consented stuff sitting around, and which can be built in two years from saying "go": solar farms. Yes, National may just have strengthened our solar boom. Their farmer-cronies (who want rural land "protected" from more productive uses so they can instead use it to pollute) will be spitting.
(It may also help with wind farms - which again have a lot of projects pre-consented and waiting - but they take longer to build).
Which also brings me to how a future government could use this policy: use it solely to push decarbonisation. Building a renewable energy project, electrifying a factory and getting it off gas, switching your fleet of delivery trucks to EVs? Have a depreciation break. Want to keep buying old, fossil infrastructure? Fuck you. We need to decarbonise quickly, and this seems like an excellent way to bring that investment forward and make it happen.