The only reference I could find to lagging in the NCC volume two is under Steel Framing:
3.4.2.6. Installation of services:
(v)
Copper and brass pipes and fittings must be prevented from coming into contact with the steel frame by one of the following methods:
(A) Where plumbing services pass through service holes, plastic grommets must be snapped into the service hole.
Explanatory information:
The use of grommets also has the effect of securely fixing the pipe to prevent water hammer.
(B) In other areas where copper pipes may come into contact with metal framing, they must be lagged or isolated with neoprene sheeting or tape
There is no other reference. Bizarre that this is recommended in building courses like the one run by RMIT but not regulated.