New Zealand's Immigration Minister Erica Stanford has revealed that a further $6 million was spent on a failed immigration IT project, pushing the known cost of the abandoned programme to nearly $40 million, while officials remain uncertain about the project's final price tag.
According to a report by the New Zealand Herald, the troubled project, which formed part of a broader biometric systems upgrade, began in 2018 but was cancelled in late 2025 after years of delays, escalating concerns and questions over its viability.
Earlier this year, Stanford disclosed that the project had already cost taxpayers $33 million before it was scrapped. A report released by the minister alleged that project staff had misled her and previous ministers, avoided Cabinet scrutiny and sidelined staff who raised concerns about the project's future. Those findings prompted an independent inquiry led by Michael Heron KC, commissioned by Public Service Commissioner Sir Brian Roche, as reported by the New Zealand Herald.
The latest development emerged after the Ministry of Business, Innovation and Employment (MBIE) responded to questions raised by Stanford during a select committee hearing in June regarding expenditure on the project during the 2025-26 financial year, the New Zealand Herald has reported.
Although the project was cancelled in November 2025, negotiations with the technology provider continued into 2026. MBIE initially advised Stanford that no staffing costs had been incurred during that financial year and that only $236 had been spent on contractors, the New Zealand Herald has reported.
However, after further inquiries from the minister's office, MBIE Chief Executive Nic Blakeley informed Stanford that an additional $6 million had in fact been spent on the project.
Stanford said Blakeley was unable to confirm whether the newly identified amount represented the project's total expenditure.
“[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,” as quoted by the New Zealand Herald.
The minister said the matter had now been referred to both the ongoing Michael Heron inquiry and the Public Service Commissioner.
“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,” the New Zealand Herald has quoted.
Stanford has also written to Parliament's Education and Workforce Select Committee to update members on the latest developments.
According to a report by the New Zealand Herald, the disclosure comes a day after Blakeley appeared before Parliament's Privileges Committee, which is examining whether he and other immigration officials misled MPs by failing to reveal that the project had already been cancelled when questioned in March.
During the hearing, Blakeley denied that officials had intentionally withheld information.
“MBIE officials did not deliberately attempt to mislead the select committee,” Blakeley said, as quoted by the New Zealand Herald.
He argued that officials had not disclosed the project's cancellation because of “commercial and budget sensitivities”. However, Blakeley acknowledged that a different approach should have been taken. “In hindsight we should have taken a different approach.”
He added, “I agree, we got it wrong,” the New Zealand Herald has quoted.
The independent financial audit is expected to determine the full amount spent on the failed project, while separate investigations continue into both the management of the programme and the ministry's financial oversight.