Review calls for urgent reset of Government's digital projects

Thursday, 2 July 2026

The Government should urgently review all major digital projects across the public sector, pause lower-value work and concentrate on funding a small number of priority programmes, a review ordered by the Public Service Commission suggests.

The commission’s chief executive, Sir Brian Roche, who also became the Government’s chief digital officer in April, said the review had given “a clear picture of what’s working and what’s not” and the PSC would consider the findings before making decisions.

The review was conducted by former Auckland Airport chief executive Adrian Littlewood, former Datacom managing director Justin Gray and consultant Matt Crockett.

Central agencies had limited visibility of what agencies were actually spending on technology, with “skunk-works” projects hidden in budgets and financial reporting, which made it hard to hold leaders accountable for outcomes, they said.

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The review was ordered before it was confirmed that a $33 million IT project at Immigration NZ had failed, sparking separate inquiries, including one being conducted by the commission.

It said important projects that could create system-wide changes in the public sector, including “digital identity” and AI projects, were “drifting, lack strong strategy and are poorly supported/coordinated”.

One lesson from Australia was that systems should be designed from “day one” so they could be shared, serving the whole of government, rather than that being an afterthought, it said.

The processes for funding and approving investments were “slow and cumbersome and can drive the wrong behaviours”, the report also concluded.

Surveys suggested only about 13% of digital plans involved technology that was suitable for use across more than one agency, it said.

Roche appeared to hint last month that some consolidation of less-complex government payroll systems might be on the cards.

The reviewers pointed to Inland Revenue’s $1.5 billion business transformation programme as an example of what could be achieved when funding, leadership and accountability were aligned.

Overseas governments were increasingly reorganising services around AI and New Zealand was falling behind and needed to improve how it planned and delivered digital investment, their report said.

Success, they said, would depend on “ruthlessly prioritising” where to focus attention and investment and ensuring the right organisational and financial settings were in place before pursuing an ambitious programme of digital reform.