While the Auckland Business Chamber celebrates the government backing away from banning surcharges, here's what they're not mentioning: Kiwis created just 914,266 new businesses in 2025. That's the lowest number since the pandemic year of 2020. (Source: Stats NZ, business-births-deaths)

To understand how we got here, you have to rewind five years. In 2020, during COVID lockdowns and a frozen economy, New Zealand still managed to birth 915,558 businesses. People started side hustles, online stores, consultancies. Anything to survive.

Then came the recovery boom. In 2021, new business formation jumped to 925,089. By 2022, it exploded: 1,032,893 new businesses in a single year. That's the high-water mark. Every industry was hiring. Property was soaring. The government was spending. If you had an idea and a laptop, you could probably make it work.

The cracks appeared in 2023. Business births dropped to 936,657. Still healthy by historical standards, but the momentum was gone. Interest rates were climbing. The cost-of-living crunch was biting. Starting a business meant taking on debt in an economy where everything, suddenly, cost more.

2024 brought a brief rally: 988,445 new businesses, a 5.5% jump. Maybe the worst was over. Maybe the landing would be soft.

It wasn't. This year, business formation collapsed by 7.5%. We're back to COVID-era numbers, except this time there's no lockdown to blame. No pandemic forcing people into entrepreneurship. Just an economy where fewer Kiwis are willing to take the risk.

Here's what that means in practice: every week in 2025, New Zealand created about 17,600 new businesses. In 2022, at the peak, that number was 19,900. We've lost 2,300 new businesses per week. That's 2,300 fewer cafes, consultancies, construction firms, cleaning services. Fewer people backing themselves.

And while existing businesses lobby to keep payment surcharges and struggle to survive infrastructure failures, the pipeline of new entrants has dried up. The economy isn't just shedding jobs faster than it creates them. It's also losing the businesses that might have hired people in three years' time.

The 2022 boom now looks like the exception, not the rule. We've returned to the pandemic baseline, but this time without the stimulus, the optimism, or the belief that taking a punt on yourself will pay off. Business formation is a leading indicator. It tells you whether people think the next few years will be better than the last. Right now, 118,627 fewer Kiwis than in 2022 are saying yes.