CPA Australia has expressed its support for the Reserve Bank of New Zealand’s (RBNZ) decision to reduce the official cash rate (OCR) by 25 basis points to 3%.

This adjustment is anticipated to alleviate some financial pressures for mortgage holders and small enterprises, according to CPA Australia.

However, CPA Australia cautioned that interest rate reductions alone will not resolve the stagnation in New Zealand’s economic recovery.

CPA Australia Regional head Rick Jones said: “Today’s OCR reduction is a positive step, easing debt costs for households and businesses already under pressure. But the underlying challenges for small business run much deeper than interest rates. Without structural reform, we risk leaving our small businesses at the bottom of growth rankings.”

According to CPA Australia’s 2024–2025 Asia-Pacific Small Business Survey, New Zealand businesses are currently underperforming compared to their international counterparts.

The survey indicated that only 36% of firms reported growth in 2024, marking the lowest figure among the 11 markets surveyed, with just 47% anticipating growth in 2025.

A significant obstacle identified is the low level of digital adoption among small businesses.

As per the survey, only 22% of New Zealand small enterprises said that investments in technology enhanced their profitability over the past year, representing the weakest outcome in the region.

The survey also highlighted a generational divide in technology utilisation, with younger business owners (under 40) more likely to leverage digital tools, as 60% of them reported generating online sales, compared to just 24% of those aged 60 and above.

Jones added: “With 64 % of New Zealand’s small business owners aged 50 or older, well above the regional average of 24%, we see a clear link between an ageing ownership profile, slower growth, and lower technology uptake.

“Younger entrepreneurs are more likely to invest in technology and achieve stronger growth, but they are the minority.”

In light of these findings, CPA Australia has urged the government to implement reforms that complement monetary policy and foster long-term productivity enhancements.

This includes providing stronger support and incentives for digital adoption, enabling small businesses to invest in and effectively utilise technology rather than merely updating outdated systems.

While the OCR reduction offers immediate relief, CPA Australia warns that the competitiveness of New Zealand’s small businesses hinges on addressing these underlying structural challenges.

Jones concluded: “Closing the digital gap is essential. If we want New Zealand’s small businesses to move from the bottom of regional growth rankings, we must help them innovate, adopt technologies, and build resilience.

“Lower interest rates can ease pressure, but only transformation will secure their future.”