MBIE Admits It 'Got It Wrong' Over Secretly Cancelled $35 Million IT Project
New Zealand's Ministry of Business, Innovation and Employment (MBIE) has acknowledged serious failures in transparency after failing to inform Parliament that a $35 million IT project had been scrapped. Chief Executive Nic Blakeley told the Privileges Committee on Tuesday that the ministry 'got it wrong' but denied any deliberate attempt to mislead Parliament.
The project, known as the Biometric Capability Update (BCU), was intended to upgrade Immigration New Zealand's biometric systems. But by March this year, it was already dead. Yet when Labour MP Phil Twyford and the Education and Workforce Committee asked about its progress, MBIE told them there was no public review — effectively concealing the cancellation.
What Went Wrong at MBIE?
Blakeley explained that the ministry believed Budget and commercial sensitivities limited what it could say publicly. At the time, MBIE was still negotiating a final payment with Japanese tech company NEC over the project. 'In hindsight, we should have taken a different approach,' he said.
Committee chair Chris Bishop pressed Blakeley on why he couldn't simply state the project had been terminated. 'I agree. We got it wrong. I accept that and we should have said differently,' Blakeley replied.
The chief executive also admitted the ministry could have requested a secret hearing with the public removed from the committee room — a step it did not take.
Was Parliament Deliberately Misled?
Blakeley insisted the decision not to disclose the cancellation was not an active one, but rather an understanding between himself and then-Immigration New Zealand boss Alison McDonald that sensitivities limited what they could say. He acknowledged that was a failing.
McDonald, now retired and appearing via Zoom from the United Kingdom, told the committee that in her mind the programme had not stopped. 'The biometric capability IT project wasn't managed by me or Immigration New Zealand. It was managed by another part of MBIE,' she said.
She accepted that when Twyford was asking about milestones, she should have 'paused a bit' and realised he was asking about the IT project specifically. 'I had no intention whatsoever to mislead the select committee,' she said.
A 'Disaster' That Beggars Belief
An audibly frustrated Bishop told Blakeley the situation 'beggars belief'. 'The project was a disaster. The fact that no-one bothered to prepare to explain why it was a disaster, that's both terrible and good for you, bad for the public service,' he said.
National's Scott Simpson noted that Twyford had been asking questions and filing Official Information Act requests before the meeting, which should have been a sufficient flag. Blakeley agreed: 'It's surprising, in hindsight, that there's no written material on BCU that shows that we weren't well enough prepared.'
ACT's Parmjeet Parmar questioned whether there were discussions after the hearing about what was said. Blakeley replied that the ministry felt it had raised questions as best it could given the limitations.
What Does This Mean for Public Trust?
Immigration Minister Erica Stanford has accused the ministry of deliberately withholding information from her and the previous Labour government about the project. On Tuesday morning, she said she hoped officials would 'tell the truth' before the committee.
The Privileges Committee is now considering its findings. Blakeley declined to answer questions from media after the hearing, saying he would wait for the committee's report.
This case raises fundamental questions about transparency in the public service. When a $35 million project fails, the public has a right to know why — and Parliament has a duty to hold officials accountable. The fact that it took a privilege referral to uncover the truth suggests deeper systemic issues at MBIE.
Frequently Asked Questions
What was the Biometric Capability Update project?
The BCU was a $35 million IT project intended to upgrade Immigration New Zealand's biometric systems. It was cancelled earlier this year after being deemed a failure.
Why didn't MBIE tell Parliament about the cancellation?
MBIE says it believed Budget and commercial sensitivities limited what it could say publicly, particularly as it was still negotiating a final payment with NEC. The chief executive admits this was a mistake.
What happens next?
The Privileges Committee will report its findings. The case has already been referred by Speaker Gerry Brownlee, and the committee will decide whether MBIE breached parliamentary privilege.
How does this affect public trust?
The incident undermines confidence in the public service's commitment to transparency. It also highlights the need for clearer protocols around informing Parliament about major project failures.