Erica Stanford Blames Flawed Assumptions for Immigration NZ Tech Upgrade Failures

Immigration Minister Erica Stanford said flawed assumptions in Immigration NZ's Our Future Services business case helped derail the agency's tech overhaul, after officials put forecast benefits $134 million too high. The overestimate was more than a quarter of the project's $453 million expected savings. The gap was large.

She said the model wrongly assumed that cutting staff would produce similar savings in ICT, property, corporate services and stewardship. Those costs are largely fixed. They do not fall with headcount.

The plan also assumed 118 full-time equivalents would go and that productivity would rise by 30 percent. Stanford said both calls were too optimistic. That did not happen.

The programme was billed as a $336 million system overhaul meant to modernise visa processing and move older systems onto one platform. It had other cost worries, including cost blowouts, vendor exposure and a possible visa-account deficit. The project already carried strain.

The Cabinet paper said the benefits were unlikely to materialize "in the way, amount or timeframe assumed in the detailed business case." Moving visa types onto the Adept system took longer than expected, leaving legacy technology in use longer than planned. The schedule slipped.

Fixed overheads did not fall with the headcount

The core error was simple. Officials treated background costs as if they would shrink with the workforce, even though the support bill behind visa processing does not behave that way. Stanford said the assumptions were wrong on both overheads and productivity. The math was too neat.

"largely fixed and do not reduce proportionately to workforce reductions."

That left the project exposed to a financial gap and to scrutiny over whether its benefits were ever reachable on the timetable written into the case. Separate reporting also raised a possible $90 million shortfall in visa accounts and a possible $12 million liability to vendor NEC. The balance sheet got worse.

A separate biometric failure still shadows the agency

The trouble sits on top of an older failure. A biometric upgrade was cancelled in December 2025 after seven years of development, and an independent review was to be led by Michael Heron KC, appointed by the Public Service Commission. The project began in 2018, was first worth $10 million, and was supposed to finish in September 2020.

It went through at least six formal change processes and had 15 different managers in seven years. Costs later reached a highest estimate of $53 million, with sunk spending around $40 million. It sprawled.

Parliament later found top officials in contempt for misleading MPs after they failed to disclose in March that the biometric project had already been cancelled. The finding concerned Blakeley and McDonald, who appeared before a select committee in March. The committee said MBIE "knew that the information it provided . was incomplete" and that its "limited manner" of answering was intentional. Stanford said in June 2026 that officials had "deliberately withheld" information on the failed upgrade. Nic Blakeley, chief executive of the Ministry of Business, Innovation and Employment, later said, "I agree. We got it wrong." Finance Minister Chris Bishop called the episode "a disaster."

The next digitisation push is already on the calendar

Digitisation is still moving ahead.

The first cutover lands on 24 September 2026, leaving less than two weeks before paper applications for certain visitor and transit visas stop on 1 October 2026 and old drafts are deleted on 8 October 2026. The rollout stays on the calendar.