New procurement rules introduced by Christopher Luxon’s government are a missed opportunity to revive New Zealand’s wood processing sector, industry leaders say, after ministers stopped short of a directive to favour local timber.
The measures, which take effect on 1 December, require agencies to apply a minimum 10 per cent “economic benefit to New Zealand” weighting to procurements and give preference to domestic firms for construction contracts under $9 million. However, while the Wood Processing and Manufacturing Association (WPMA) welcomed the principle, it says the details are too weak to shore up regional mills and jobs.
“A directive in the new rules, like with wool, to government agencies to use locally produced wood where practical in the construction and refurbishment of their buildings is what we need to genuinely grow domestic timber and lumber sales,” said Mark Ross, WPMA’s CEO today. “That kind of clear government leadership would help stop the significant job losses in our small communities due to recent mill closures.”
Ross warned that the 10 per cent weighting is a blunt tool that could not reliably be used to tip contracts to timber against entrenched alternatives such as concrete, steel and imported products: “With mills in our regions shutting down and a flat domestic market, the Government has overlooked a clear means to leverage its spending in these new rules to provide direct support to boost the wood processing sector,” he said.
As it stands, the wood processing industry sector employs more than 30,000 New Zealanders and “contributed $7.2 billion to the economy” in the financial year ending 2024 from domestic sales and exports of value‑added wood products and derivatives. Industry leaders say a wool‑style procurement directive or clearer social‑value scoring that rewards local jobs and lifecycle benefits would deliver an immediate demand signal to preserve processing capacity.
A Ministry of Agriculture and Procurement spokesperson defended the new framework as deliberately technology‑neutral, saying it gives agencies scope to weigh a range of economic‑benefit factors rather than imposing categorical product preferences. The ministry declined to set out any immediate plans to add a timber‑specific directive.
It comes as procurement specialists and builders caution that mandatory product preferences can raise costs and complicate supply chains where local capacity is limited, and they urge that any preference be phased in to avoid project delays or price spikes. The debate comes as regional mill closures and international competition have reduced domestic capacity, prompting calls for immediate policy action to sustain the local industry.
The WPMA said it will press ministers and procurement officials to align the new rules with the wool directive, adopt social‑value scoring that favours local jobs and lifecycle benefits, and phase implementation to give domestic suppliers time to scale. “If the Government wants to back regional communities and maintain a viable wood processing industry, it can do so through procurement rules that recognise the broader economic and environmental benefits of locally produced timber,” Ross said.
