Can You Trust The System?
What MBIE’s failed biometric project means for migrants, employers and confidence in Immigration New Zealand.
Trust is a fairly important ingredient in an immigration system. Applicants trust that the rules published by Immigration New Zealand mean what they appear to mean (assuming they can interpret them). Employers trust that if they follow the process, pay the fees and provide the evidence requested, somebody at the other end will deal with it properly. Migrants hand over passports, medical information, police certificates, employment histories, financial records and increasingly biometric information, on the assumption that the government agency receiving all of this is competent, secure and properly managed.
Most of the time, we simply assume that it is, however revelations concerning Immigration New Zealand’s failed Biometric Capability Upgrade (BCU) project make that assumption worth looking at a little more closely. The BCU project began eight years ago, in 2018 and was intended to modernise the technology INZ uses to manage and match biometric information. After seven years of development, delays and mounting concerns, it was discontinued in December 2025 without delivering the intended new system or anything even remotely close to one.
Initially, MBIE advised Ministers, Parliament’s Education and Workforce Committee and the public that around $33 million of project costs would need to be written off. That was already a substantial amount of money for a project that ultimately delivered nothing. Then things became slightly more uncomfortable.
At the end of July, Immigration Minister Erica Stanford announced that her office had identified apparent problems with financial information MBIE had supplied to the Select Committee. After further checking, MBIE advised that another $6 million in associated project costs had been identified.
Importantly, MBIE’s Chief Executive then told the Minister that he could not be confident that this additional $6 million represented the full extent of expenditure on the project. The costs and estimates just keep mounting up.
The financial issues however, sit alongside a separate and potentially more serious question about what Ministers were told while the project was unfolding. An independent review identified significant problems with governance, project oversight and the accuracy of advice provided to the Minister. The Public Service Commission has now appointed Michael Heron KC to investigate the conduct of officials, including whether information may have been withheld and Ministers misled. That inquiry has not yet been concluded, so there is still plenty of water to flow under this particular bridge.
There is a difference between identifying serious failures in the way information was handled and concluding that public servants deliberately misled their Minister or course. The latter is now being investigated and we should probably allow the investigation to do its job before pointing too many fingers. However, there is already enough established information to ask a much broader question and a question that impacts on the users of the very system being scrutinised.
For migrants and employers dealing with Immigration New Zealand every day, how much confidence should we have in the system that delivers the final and often life-changing outcome?
When The Numbers Don’t Add Up
Government technology projects occasionally go wrong…in fact they probably go wrong more often than they go right. That statement is unlikely to shock anyone who has encountered a government agency website on a Monday morning.
Large IT projects are also difficult to manage and deliver, particularly when it comes to something as complex as biometrics. Requirements change, technology changes, contractors change and projects designed several years earlier can very quickly become outdated - particularly given the rapid rise in the use of AI. A government agency abandoning a technology project, even an expensive one, does not automatically indicate misconduct or institutional failure and sometimes it makes financial sense to do so in the longer-term. The problem with the BCU project is that the concerns extend beyond the fact that the technology did not work or was not delivered.
The independent review identified failures in governance, oversight and decision-making. It also raised questions about how the costs of the project were managed around an important $35 million threshold.
Counting Pennies
MBIE’s investment in IT systems has been significant, however not all of the money has resulted in workable outcomes, despite a push to digitise the entire system.
The BCU had an approved whole-of-life cost of up to $35 million. Under government investment rules, exceeding that level would have required Cabinet-level scrutiny and approval.
By early 2024, however, MBIE officials were already discussing the likelihood that the project would need to exceed that amount by a fairly substantial margin. Documents subsequently released show work being undertaken around increasing the whole-of-life cost towards $40 million. The independent review later raised concerns about whether accounting decisions and changes to the way costs were allocated and recorded, had the effect of keeping BCU below the $35 million threshold (perhaps on purpose). Those issues are now specifically within the scope of the Heron inquiry, including allegations of what has been described as “creative accounting”. Again, allegations are not findings.
But there is a legitimate governance question here that feeds in to the level of trust users can expect to have in a system they are relying on. Approval thresholds exist for a reason. When spending reaches a certain level, additional scrutiny is supposed to occur. A system where costs can simply be moved around until the number fits under the approval limit would make that limit fairly pointless.
There were also problems with the information being provided to the Minister. In March 2024, Minister Stanford was advised that independent quality assurance work supported the project approach and indicated that delivery was achievable. The underlying independent reporting was considerably less reassuring and questioned whether the project would deliver at all. Ministers do not personally run government departments, instead they rely on officials to provide accurate information, including information that is inconvenient, embarrassing or likely to result in difficult questions being asked. That is how our public service model is supposed to operate.
It is also important, however, to separate problems at the governance level from the wider operation of Immigration New Zealand.
I deal with INZ regularly and often with very senior officials, and there are many capable and conscientious people working inside the organisation. In fact over recent years, I have seen more engagement and more transparency from those senior officials than ever before and I have been around for a while. Visa officers process large numbers of applications, technical teams deal with complicated immigration instructions and policy officials operate in an environment where Ministers have a habit of changing the settings just as everyone has finally worked out how the previous ones were supposed to work.
It can be a pretty complicated organisation to run, manage and steer, when you never know what policy change or update might be around the corner, and need to be rolled out, often in a hurry. Most of the day to day work continues perfectly normally and visas are decided and outcomes delivered.
Nothing in the BCU story suggests that an Immigration Officer assessing a partnership visa or work visa cannot be trusted to do their job properly. The issue is higher up the chain. Can Ministers rely on the information they receive? Are major projects being properly governed? Are financial controls robust enough? When something starts to go wrong, does the bad news travel upwards quickly, or does it become progressively more optimistic as it moves through the organisation - those are all questions that MBIE will be having to answer and while they do, Visas still have to be processed.
The Migrant Component
There is another part of this story that deserves considerably more attention from an immigration perspective. When it comes to discussing costs, migrants and employers fund a very substantial proportion of New Zealand’s immigration system. Following the immigration fee and levy review in 2024, the funding model was deliberately shifted further towards users of the immigration system meeting its costs in a much bigger way. The proposed funding mix for 2024/25 was approximately 50 percent from immigration fees, 40 percent from immigration levies and about 9 percent from Crown funding.
In other words, roughly nine dollars in every ten used to fund the wider immigration system was expected to come from the fees and levies that migrants and employers paid, rather than general Crown funding. That makes this story rather more relevant to migrants than an ordinary tale of government IT expenditure blowing out.
Even more directly, when INZ was discussing the biometric upgrade publicly in 2024, it confirmed that the costs associated with running and upgrading its biometric capability system were fully funded through immigration fees and levies.
Splitting The Bill
The fees that migrants and employers pay to INZ, form a substantial part of the overall funding model for the system. The balance is topped up by the Crown.
Migrants applying for visas and employers using the immigration system are not simply passive consumers of a service funded by somebody else as might be the case with other government agencies. Collectively, they are paying for a substantial amount of the machinery required to operate it.
Of course, paying an immigration fee does not mean someone is purchasing a particular visa outcome.
Applicants pay to have an application assessed against the rules, not for the promise of a visa. Sometimes the correct answer will be a decline and no amount of fee revenue should change that. But payment does create a reasonable expectation that the system itself is being competently managed.
Migrants and other users of the system (including us LIA’s) should expect the technology supporting their applications to work. They should expect appropriate financial controls. They should expect major projects to be subject to proper scrutiny. They should expect Ministers responsible for the immigration system to receive accurate information about what is happening inside it. That expectation becomes even more significant because of the decisions migrants make in reliance on that system.
Immigration is not an ordinary government transaction. People resign from jobs overseas, sell houses, move children between schools and commit substantial amounts of savings because they believe a New Zealand immigration pathway offers them a realistic future. Employers make similar decisions. Businesses invest in accreditation, recruit internationally, restructure teams and make commercial commitments based on the assumption that immigration policy and administration can be relied upon.
There is always some risk in that process. Immigration policy changes and no government can guarantee that every setting will remain untouched forever. But administrative competence should not be one of the larger risks applicants are required to price into the equation. This is why the BCU story is an important one in ensuring that the users of the system can still maintain a degree of trust.
It does not prove that Immigration New Zealand is institutionally untrustworthy. That would be an enormous and, unjustified leap. What it does show is that something went badly wrong in the management of a significant immigration project and that the existing systems did not identify or correct those problems quickly enough.
To MBIE’s credit, its current Chief Executive has publicly accepted that the Ministry fell short of the standards expected of it. MBIE has supported the Public Service Commission investigation and commissioned further work to establish the true financial position.
There is also now independent scrutiny of INZ’s much larger Our Future Services transformation programme, which was aimed at modernising the entire system. On 19 August, the Public Service Commissioner appointed an independent reviewer to examine that programme’s costs, governance, management, reporting and expected benefits. That programme is intended to modernise INZ’s wider systems over several years, so getting the governance right this time is really important.
Some will inevitably respond by asking whether another review is simply Wellington prescribing itself another review, and that might be an appropriate stance to take. However independent scrutiny is also how confidence is rebuilt. A public service should not be judged on whether it ever makes mistakes. With organisations the size of MBIE, mistakes are inevitable. It should be judged on whether problems are exposed, investigated properly and fixed - and I know there are a lot of people within the organisation who genuinely want to see those issues fixed. There are good people inside the organisation, keen to see it work properly, and to deliver the right outcomes from migrants, employers and New Zealand generally.
Trust Has To Be Earned
So, can migrants and employers still have confidence in Immigration New Zealand? The BCU failure does not mean ordinary visa decisions are unreliable or that the wider immigration system has suddenly stopped functioning. Thousands of applications continue to be processed and there are many professional and committed people inside INZ doing difficult work in an incredibly complicated system. A system about to become even more complicated with 24 August SMC changes.
I certainly would not suggest that migrants should now approach every INZ decision on the assumption that something sinister is occurring behind the scenes. That would be both unfair and unhelpful. But equally, this cannot simply be dismissed as another IT project that went a bit sideways.
Around $33 million was initially identified for write-off. Another $6 million in associated costs was then discovered. At the time of writing, MBIE cannot confidently say that represents the full expenditure. There are also unresolved questions about the quality of advice provided to Ministers, how project costs were managed around the $35 million Cabinet approval threshold and whether relevant information was withheld.
For migrants, the funding model adds another dimension. If the Government chooses to operate an immigration system where the great majority of costs are recovered from applicants and other users through fees and levies, those users are entitled to expect the money to be managed properly. That does not mean migrants get to dictate immigration policy simply because they pay application fees, however it does mean MBIE cannot treat them as entirely detached from questions about how the immigration system is run - they are ultimately invested in it.
If the pending investigations conclude that this was primarily a very badly managed technology project, then MBIE will have some uncomfortable lessons to learn and hopefully stronger systems will follow. If they conclude that officials knowingly withheld important information or manipulated financial reporting to avoid scrutiny, the consequences should be considerably more serious.
Until those investigations are complete, there is little value in reaching the verdict before hearing the full evidence, however there is also nothing wrong with expecting better. Confidence in our public service does not require blind faith. In fact, healthy institutions should survive scrutiny rather than resist it.
For migrants and employers who depend on Immigration New Zealand, that is probably the best stance to take.
Trust the system, absolutely.
Just keep the receipt.
Until next week.
