Last week, the New Zealand Government announced an amendment to its procurement rules, in a move that aims to provide greater opportunities for local sheep farmers and wool producers.
Around 130 government agencies will be expected to use woollen fibres where practical and appropriate in the construction of government-owned buildings, with potential uses including flooring, insulation, acoustic panels and furnishings.
The new procurement requirement will take effect from 1 July 2025 and will apply to the construction of government-owned buildings that cost $9 million and more, and to refurbishments of $100,000 and more.
Economic Growth Minister Nicola Willis said the move delivers on a New Zealand First and National Party coalition agreement to preference the use of woollen fibres in government buildings.
“We’re showing our commitment to woollen fibres by leveraging government spending, to provide more targeted opportunities for wool producers. This will help to increase jobs, employment and drive economic growth,” she said.
“The new requirement will encourage innovation in the building materials industry, which will lead to more investment and new markets opening up.
“There are also sustainability and health benefits to using wool. Wool’s natural qualities allow it to dampen sound and absorb pollutants, and woollen fibres contribute to healthier indoor environments by naturally regulating humidity and improving air quality.”
Reflecting Willis’s statement, Associate Agriculture Minister Mark Patterson said the new requirements go beyond procurement’s immediate aim of purchasing goods and services.
“We’re walking the talk. This move will hopefully inspire private businesses to follow suit. We are acting to get even greater value from our investments. It is the government’s role to create the conditions for businesses to grow the economy and invest in creating more jobs,” he said.
“Wool has been synonymous with New Zealand since the early settlers bought sheep here 200 years ago. New Zealand remains the world’s third-largest wool producer, after China and Australia, and accounts for about nine percent of total world wool production.
“Supporting the New Zealand wool industry is a key part of the positive steps the government is taking to add value to the economy.
“Our wool industry has recently been through a tough time with competition from synthetic fibres in global markets and a decline in both sheep numbers and the volume of wool produced. The sector is turning the tide with wool prices now covering the shearing costs, but we know there is more to be done.
“There’s a real swing back to natural fibres, with consumer interests moving back to renewable fibres such as wool.”
Local wool producers have welcomed the government’s directive, saying the decision will help to transform New Zealand’s wool industry.
Kate Acland, Chair of Beef + Lamb New Zealand, said the announcement is great news for the country’s sheep farmers, the many thousands of people who work in the wool industry – from shearers to wool processors – and rural communities across the country.
“The decision demonstrates clear leadership from the government in backing New Zealand’s world-leading farmers on the global stage,” she said.
“Creating demand for New Zealand wool supports farming families, strengthens rural economies and helps build resilience across the sector. It’s also a reminder to global markets that New Zealand farmers are at the forefront of producing sustainable, high-quality wool.
“This decision will help reinvigorate the wool industry, which will benefit not just rural communities but the New Zealand economy.
“Wool in public buildings will showcase to New Zealanders the many benefits of this natural high-performing fibre over synthetic alternatives. Wool is sustainable, renewable, biodegradable, warm and comfortable.”
However, other industries have expressed their disappointment, urging the government to consider their materials for construction purposes.
Mark Ross, Chief Executive of the Wood Processors and Manufacturers Association of New Zealand, said using wool fibres over synthetic options is a sensible decision, but it is disappointing that wood fibres have been overlooked.
“The wood products that we are talking about are not only renewable but have economic and environmental advantages when it comes to carbon storage and supporting our rural communities,” said Ross.
“With New Zealand’s sustainable forestry model, using locally-grown wood products incentivises our circular bioeconomy, boosts New Zealand’s domestic wood processing industry and supports our drive to meet our climate change targets.”
The local wool sector contributed $549 million to the New Zealand economy in the 2024 financial year, from exporting processed and unprocessed wool products.
A wider review of the New Zealand Government’s procurement rules is currently taking place, to remove red tape and promote responsible spending and competition, as reported previously by PASA. Watch this space for updates.
