Immigration NZ Tech Upgrade: Flawed Assumptions Led to Overstated Savings

Immigration New Zealand’s ambitious “Our Future Services” initiative, designed to modernize visa processing, has faced significant challenges, largely due to what Immigration Minister Erica Stanford describes as flawed assumptions in its initial business case. Officials overestimated the project’s potential savings by a substantial $134 million, a figure that represented more than a quarter of the projected $453 million in expected benefits. This significant gap points to a fundamental misunderstanding of how certain costs behave within the agency.

The core of the problem, as highlighted by Minister Stanford, lies in the incorrect assumption that reducing staff numbers would automatically lead to proportional savings in areas like information technology, property, and corporate services. These types of expenses are often fixed, meaning they do not decrease significantly even when the workforce shrinks. The business case also projected a reduction of 118 full-time equivalent staff and a 30 percent increase in productivity, both of which proved to be overly optimistic and did not materialize as planned.

Overestimated Benefits and Fixed Overheads

The “Our Future Services” program was conceived as a $336 million overhaul aimed at updating visa processing systems and consolidating older technologies onto a single platform. However, the project encountered numerous difficulties, including cost blowouts, issues with vendors, and concerns about a potential deficit in visa accounts. The Cabinet paper acknowledged that the anticipated benefits were unlikely to be achieved in the manner, amount, or timeframe originally outlined. The transition of visa types to the Adept system, for instance, took longer than anticipated, necessitating the continued use of legacy technology for an extended period.

The central miscalculation involved treating background operational costs as variable when they are, in fact, largely fixed. This error meant that the projected savings from staff reductions were significantly inflated. Minister Stanford stated that the assumptions regarding both overheads and productivity were incorrect, leading to an overly optimistic financial outlook. This miscalculation left the project vulnerable to financial shortfalls and questions about the achievability of its stated benefits within the original schedule. Further complicating the financial picture were reports of a potential $90 million shortfall in visa accounts and a $12 million liability to the vendor NEC, worsening the agency’s financial standing.

A History of Biometric System Failures

The current difficulties are compounded by a previous, significant failure within the agency. A biometric upgrade project, initiated in 2018 with an initial budget of $10 million and a planned completion in September 2020, was ultimately cancelled in December 2025 after seven years of development. This project underwent at least six formal change processes and saw 15 different managers over its lifespan. Its estimated cost escalated to a high of $53 million, with approximately $40 million already spent.

This situation led to Parliament finding top officials in contempt for misleading Members of Parliament. The officials failed to disclose in March that the biometric project had already been canceled. The committee determined that the Ministry of Business, Innovation and Employment (MBIE) had knowingly provided incomplete information and intentionally responded in a limited way. Minister Stanford stated in June 2026 that officials had deliberately withheld information regarding the failed upgrade. Nic Blakeley, chief executive of MBIE, later admitted, “I agree. We got it wrong.” Finance Minister Chris Bishop described the entire episode as “a disaster.”

Ongoing Digitisation Efforts

Despite these setbacks, Immigration New Zealand continues to advance its digitisation efforts. Several key dates mark the ongoing transition to enhanced online platforms and the phasing out of paper applications. Most visitor visa applications are scheduled to move to the improved Immigration Online platform on September 24, 2026. Following this, paper applications for certain visitor and transit visas will cease on October 1, 2026. Additionally, old drafts saved in the previous system are slated for deletion on October 8, 2026, marking further steps in the agency’s digital transformation.

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