Minister reveals $6m more wasted on immigration IT project, ministry unsure of total cost

Author: Adam Pearse,
Publish Date: Wed, 29 Jul 2026, 3:14pm

Immigration Minister Erica Stanford revealed the latest information today at Parliament. Photo / Mark Mitchell

Immigration Minister Erica Stanford has revealed another $6 million was wasted on a botched immigration IT project, bringing the known sunk cost to almost $40 million.

However, the Ministry of Business, Innovation and Employment (MBIE) has been unable to guarantee that is the project’s final cost and is engaging an independent financial auditor to try to establish how much was spent on the failed project.

Stanford has written to Public Service Commissioner Sir Brian Roche, asking whether the scope of his current investigation into the project needed to be widened to incorporate MBIE’s financial management.

Earlier this year, Stanford revealed that a $33m IT project, which was part of a wider biometric systems upgrade, was terminated late last year after about seven years of delays and issues.

A report released by Stanford alleged project staff misled her and previous ministers, avoided Cabinet scrutiny and moved on staff who questioned the venture’s viability. That prompted Roche’s investigation, which is ongoing, led by Michael Heron KC.

Today’s revelation came after MBIE officials responded to questions about the project, posed in June when Stanford released her report at a select committee, which included how much was spent on staff and contractors associated with the project in the 2025-26 financial year.

MBIE chief executive Nic Blakeley appeared before Parliament's Privileges Committee yesterday. Photo / Mark Mitchell

The project, which began in 2018, had continued late into 2025 despite multiple red flags being raised about its viability. It was eventually cancelled in November of that year, however, the ministry remained in negotiations with the project’s provider into 2026.

Despite this, MBIE told Stanford last week that staffing costs for that year were zero and just $236 had been spent on contractors.

After being challenged by Stanford’s office, MBIE chief executive Nic Blakeley returned to inform Stanford he had discovered another $6m that had been spent on the project.

However, Blakeley couldn’t give a guarantee there hadn’t been other funding spent on the project that MBIE wasn’t currently aware of.

“[Blakeley] informed my office today that he cannot be confident this further $6 million represents the full extent of expenditure on the BCU [project] and he has made the decision to commission an independent financial audit.

“In close consultation with Economic Growth Minister Nicola Willis, we have referred this matter to both the Michael Heron inquiry into the BCU project and the Public Service Commissioner, as we consider it raises significant questions regarding MBIE’s financial controls more generally.”

In addition to writing to Roche, Stanford has also written to the Education and Workforce select committee to inform members of the development.

Yesterday, Blakeley fronted Parliament’s Privileges Committee, which is assessing whether he and other immigration officials deliberately misled select committee members in March when they were asked about the project’s issues and officials failed to disclose the project had been cancelled last year.

“MBIE officials did not deliberately attempt to mislead the select committee,” Blakeley said.

He claimed officials hadn’t addressed the project’s status due to “commercial and budget sensitivities”.

However, he later conceded MPs could have been told the IT project was not continuing or officials could have briefed the committee in a private session.

“In hindsight we should have taken a different approach.

“I agree, we got it wrong.”

Adam Pearse is the Deputy Political Editor and part of the NZ Herald’s Press Gallery team based at Parliament in Wellington. He has worked for NZME since 2018, reporting for the Northern Advocate in Whangārei and the Herald in Auckland.