Revitalizing New Zealand’s Economy: New Government Procurement Rules to Empower Local Businesses

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Government Overhauls Procurement Rules To boost Kiwi Businesses

October 9, 2025

Wellington – The New Zealand Government announced a meaningful revision to its procurement policies Today, October 9, 2025, designed to channel more taxpayer funds toward domestic enterprises. the alterations, spearheaded by Economic Growth Minister Nicola Willis, are slated to become operational on December 1st.

New Economic Benefit Test Introduced

A cornerstone of the revised rules is the introduction of a mandatory ‘economic benefit test.’ Government agencies will now be required to allocate at least 10% of their purchasing decisions to evaluating the positive economic impact a business will generate. This includes factors such as job creation, workforce training, and the wider benefits of supporting New Zealand-based operations.

Minister Willis emphasized that the adjustments respond directly to concerns voiced by the business community, who felt existing criteria inadequately valued New Zealand’s interests. “We want to see taxpayer money supporting Kiwi businesses to grow, hire, and thrive,” she stated.

Simplified Rules and Expanded Opportunities

The Government has also streamlined the procurement process,reducing the number of regulations from 71 to 47 to improve accessibility and clarity for businesses. This simplification aims to encourage broader participation in the bidding process, especially among Small and Medium-sized Enterprises (SMEs). Government contracts collectively represent over $50 billion in annual expenditure, offering significant opportunities for local firms.

The revised policies will apply to all goods, services, and refurbishment projects exceeding $100,000 in value, and also construction contracts surpassing $9 million. Contracts falling below these thresholds will be preferentially awarded to capable local businesses.

Impact on International Bidders

The changes aren’t solely focused on domestic companies. International firms vying for government contracts will now be expected to demonstrate a clear commitment to delivering value to New Zealand, fostering local employment, and contributing to the nation’s economic development.

Did You Know? According to Statistics New Zealand, SMEs account for 99% of all businesses in the country and provide employment for over 70% of the workforce.

Rule Change	Details	Impact
Economic Benefit Test	10% weighting for economic impact	Prioritizes businesses contributing to NZ economy
Rule Reduction	From 71 to 47 rules	Simplifies process for businesses
Contract Thresholds	$100k for goods/services, $9M for construction	Defines scope of new rules

The Broader Context of Government Procurement

Government procurement is a powerful economic lever. By strategically directing public funds, governments can influence job creation, innovation, and regional development. The move toward prioritizing local businesses reflects a global trend gaining momentum,especially in the wake of recent economic disruptions and supply chain vulnerabilities.

Pro Tip: Businesses seeking to capitalize on these changes should proactively quantify their local economic impact – including employment figures, regional sourcing, sustainability initiatives, and supply chain resilience – to effectively showcase their value proposition in tender submissions.

According to a recent report by the OECD, strategic procurement practices can add up to 2% to a country’s GDP. OECD Procurement Portal

Frequently Asked Questions

• What is the economic benefit test? It’s a new requirement for government agencies to consider the economic impact of a business when awarding contracts, with a weighting of at least 10%.
• How will these changes affect international businesses bidding for contracts? International firms will need to demonstrate a clear commitment to creating value within New Zealand.
• what types of contracts are covered by these new rules? The rules apply to goods, services, and refurbishment contracts over $100,000, and construction contracts exceeding $9 million.
• what is the Government hoping to achieve with these changes? The goal is to boost the New zealand economy by supporting local businesses and creating jobs.
• Are there resources available to help businesses navigate the new rules? The Government is expected to provide guidance and support to help businesses understand and comply with the new procurement policies.

What impact do you think these changes will have on New zealand’s economic landscape?

How can local businesses best position themselves to win government contracts under the new rules?

Share your thoughts in the comments below and join the conversation!

What specific steps can businesses take to effectively highlight their local advantages within government bids, beyond simply stating their New Zealand origin?

Understanding the Shift in Government Procurement

New Zealand’s economic landscape is poised for a critically important boost thanks to recently implemented changes in government procurement rules. These reforms, effective October 2025, prioritize local businesses, aiming to stimulate economic growth, create jobs, and foster innovation within the country. For years, concerns have been raised about the leakage of government contracts to overseas companies, hindering the potential for domestic economic development. This new approach directly addresses those concerns, shifting the focus towards New Zealand businesses and local suppliers.

Key Changes to the Procurement Rules

The updated rules aren’t simply about preference; they represent a fundamental restructuring of how the government evaluates bids.Here’s a breakdown of the core changes:

* Increased Weighting for Local Benefits: Government contracts will now explicitly consider the broader economic and social benefits of awarding the contract to a New Zealand-based business. This includes factors like job creation, regional development, and skills training.

* Local Content Requirements: While not imposing strict “buy local” mandates, the new rules encourage agencies to consider the proportion of New Zealand made products and services included in bids.

* Simplified Tender Processes for SMEs: Recognizing the challenges faced by small and medium-sized enterprises (SMEs), the government is streamlining the tender process, reducing bureaucratic hurdles and making it easier for smaller businesses to compete. This includes clearer guidelines and reduced tender documentation requirements.

* Focus on Value for Money – Beyond Price: The emphasis is shifting from solely focusing on the lowest price to evaluating bids based on overall value for money, considering quality, innovation, and long-term benefits. Government contracts will be awarded based on a holistic assessment.

* Indigenous Procurement: A dedicated focus on supporting Māori and Pasifika businesses through targeted procurement opportunities.

Benefits for New Zealand Businesses

The implications of these changes are far-reaching. Local businesses stand to gain considerably from the new procurement landscape.

* Increased Revenue & Growth: Access to government contracts provides a stable revenue stream, enabling businesses to invest in expansion, research and development, and job creation.

* Enhanced Competitiveness: The opportunity to compete on a more level playing field will empower New Zealand businesses to innovate and improve their offerings.

* Job Creation: Increased economic activity driven by government spending will lead to the creation of new jobs across various sectors. New Zealand jobs will be a direct result of these policies.

* Regional Economic Development: Prioritizing local suppliers will help distribute economic benefits more evenly across the country, supporting regional economies.

* Strengthened Supply chains: Encouraging the use of local content will strengthen New Zealand’s supply chains, making them more resilient and less vulnerable to global disruptions.

Navigating the New Procurement System: A Practical Guide

For businesses looking to capitalize on these opportunities, here’s a step-by-step guide:

1. Register on the Government Electronic Tender Service (GETS): GETS (https://www.gets.govt.nz/) is the central platform for all government tenders. Registration is essential.
2. Understand the New Evaluation Criteria: Familiarize yourself with the updated evaluation criteria, paying close attention to the weighting given to local benefits and value for money.
3. Highlight Your Local Advantages: clearly articulate your company’s local benefits in your bids, including job creation, skills development, and contribution to regional economies.
4. Network with Government Agencies: Build relationships with relevant government agencies to understand their needs and upcoming procurement opportunities.
5. Seek Support from Business Growth Advisors: Organizations like the New zealand Trade and Enterprise (NZTE) and Regional Business Partners offer support and guidance to businesses navigating the procurement process.

Case Study: The Impact of Local procurement in Australia

Australia implemented similar local procurement policies in recent years, particularly in infrastructure projects.A 2023 report by the Australian Industry Group found that these policies resulted in a 15% increase in local content in major projects and a significant boost to employment in regional areas. This demonstrates