Hon Nicola Willis
Minister for Economic Growth

The Government is proposing changes to procurement rules to make it easier for New Zealand businesses to win government contracts that are collectively worth more than $50 billion a year, Economic Growth Minister Nicola Willis says.

“The changes include introducing a new economic benefit test and scrapping 24 rules that put unnecessary obstacles in the path of Kiwi businesses.

“This is part of our plan to increase jobs and incomes by shifting New Zealand to a faster growth track,” Nicola Willis says.

“The new ‘economic benefit’ test will require government agencies to consider the wider benefit to New Zealand of awarding contracts to New Zealand firms when making procurement decisions.

“Doing so will create export and employment opportunities and help New Zealand businesses to grow.

“New Zealand’s businesspeople are innovative and resourceful and the Government wants to give them every opportunity to build scale so they can take on the world.

“Reducing the number of rules will streamline and simplify the process for New Zealand businesses.

“Currently there are 71 rules that agencies must follow when tendering contracts. We are proposing to reduce that number to 47 by scrapping rules that are redundant or unnecessary, duplicate content, repeat statutory and regulatory requirements or have never been applied in practice.

“I know from my conversations with businesspeople that many find the paperwork involved in bidding for government contracts daunting. This will reduce the barriers that smaller and medium-sized New Zealand businesses face bidding for government contracts.”

The Government is proposing to dispense with requirements for government agencies to:

• build new non-residential government buildings to a five-star rating standard
• purchase battery electric or hybrid electric vehicles
• purchase office supplies that produce low amounts of waste and/or are recyclable; and
• pay the living wage in contracts for cleaning, catering and security guard services

“Many of these requirements will be replaced by the new economic benefit rule,” Nicola Willis says.

“The new rule will apply to all goods, services and refurbishment contracts worth more than $100,000 and all construction works worth more than $9 million.

“For contracts below these levels, agencies will be expected to award contracts to New Zealand businesses that have the capability to deliver.

“Public consultation on the new draft rules opens today and will close on 8 April 2025 after which the proposed changes will be considered by Cabinet.”

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