Tax cuts are possible if the Government changes the way it buys goods and services, a report shows.
The Sustainable Procurement in Government: New Opportunities for Business report by the New Zealand Business Council for Sustainable Development says the Government could save up to $1.6 billion a year.
The savings would come from buying goods that were cheaper over their whole life, not just on the day of purchase, the report says.
The practice is known as "sustainable procurement".
Other governments and businesses, including in Denmark, Finland and Britain, that have adopted sustainable procurement save between 8 and 30 per cent, the report says.
The New Zealand Government spends between $12 billion and $20 billion a year and local and regional councils $5.6 billion, the report says.
"Billions are at stake," council chief executive Peter Neilson said. "There's a major shift happening here and internationally.
"The savings are so compelling if this practice were applied to all central Government buying, the country could afford another round of tax cuts."
Most New Zealanders agree with the importance of sustainable procurement. A survey found 67 per cent of New Zealanders believe Government agencies should buy goods based on value for money over the whole life.
Forty-five per cent said it should be considered for all Government contracts for goods and services and 41 per cent said it should be considered for certain purchases.
Of those, 75 per cent said local and regional governments should also use sustainable procurement.
Mr Neilson said companies not using sustainable procurement were "putting themselves at risk".
Environment Minister Nick Smith and The Warehouse founder Sir Stephen Tindall were among guests invited to the report's launch in Auckland last night.
- NZPA
Recipe for affordable tax cuts
The report suggests that with the right strategy, the Government could afford another round of tax cuts. Photo / Richard Robinson
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