NZ Manufacturer magazine, November 2025

By Hon Chris Penk, Minister for Small Business and Manufacturing

You may have seen the Finance Minister’s recent announcement about changes to how the Government buys goods and services.

I want to make sure Kiwi businesses hear the good news because the new procurement rules, coming into effect on 1 December 2025, are designed to give small and homegrown firms a real chance to win government work.

If landing a government contract has ever felt out of reach, now is the time to take a closer look.

Government procurement is big business. Each year, agencies spend over $50 billion on goods, services, and infrastructure. That is a huge opportunity for local manufacturers, suppliers, and service providers.

Until now, feedback from the business community showed that too many local manufacturers and small and medium-sized enterprises found the process complex, time-consuming, and costly to engage with.

The Government has responded to that challenge with reforms aimed at making the system simpler and fairer.

The number of procurement rules will reduce from 71 to 47, cutting duplication, streamlining processes, and making it easier for businesses to understand what is expected when bidding for government work.

One of the most significant changes is a new rule requiring agencies to consider the economic benefit to New Zealand in every procurement.

When evaluating bids, agencies must now give at least 10 percent weighting to how a supplier’s proposal will benefit the New Zealand economy. That benefit could include using local suppliers, creating jobs, supporting regional businesses, or investing in skills and training.

For the roughly 20,700 manufacturers in New Zealand, this means the Government wants to work with businesses that help New Zealand thrive.

The change will support local firms directly and also encourages international companies to show how they will contribute to the New Zealand economy when bidding for government contracts.

Through partnerships, subcontracting, or local hiring, international firms will need to demonstrate their commitment to economic growth. Larger companies, both domestic and international, are encouraged to include small manufacturers as subcontractors or suppliers.

This opens up new opportunities for collaboration and growth.

The reforms also strengthen transparency and accountability. Agencies will be required to proactively publish procurement policies and contract awards, giving businesses and the public greater visibility into how decisions are made.

For manufacturers, this is a game-changer. Whether supplying components for infrastructure projects, producing goods for public services, or offering specialist expertise, the new rules make it easier to compete and succeed.

The rules also improve contract management and supplier panel arrangements, ensuring fairer access and engagement with businesses of all sizes.

That means more consistent interaction, clearer expectations, and better outcomes for everyone involved.

The new rules apply to all goods, services, and refurbishment contracts over $100,000, and construction contracts over $9 million.

Even below those thresholds, agencies are expected to award contracts to capable New Zealand businesses, creating more opportunities for small manufacturers to secure work.

The Ministry of Business, Innovation and Employment (MBIE) will run webinars and events to help agencies and suppliers understand the new rules. I encourage you to take part and find out how you can participate and benefit from the reformed system.

Let us make the most of it.