I have seen cheap Italian merino, I think it was in Muji or maybe that shop on Regent Street (corner of Air Street?), name evades me... anyways, I didn't bother.
Some things can only be so cheap, and I reckon NZ/Aussie merino falls into that category. You get what you pay for and, imho at least, Icebreaker is (or certainly was) worth paying for.