Can the Government digitise its way to a smaller public service?
Friday, 19 June 2026
The failure of a $33 million IT project at Immigration NZ doesn’t appear to bode well for the Government’s hopes of leveraging technology to streamline the public service, the minister in charge of the department, Erica Stanford, agreed last week.
On the same day the fiasco at Immigration was revealed, Finance Minister Nicola Willis was telling MPs that digital technology — including AI — would be one of the tools that would allow the public service to shed 8700 jobs over the next three years.
“We see no reason why, in a modern age with great digital tools available, we shouldn’t be able to have a core public service similar to the size it’s been in the past,” Willis said, referring to the Government’s new target of ensuring core agencies employ no more than 1% of the population.
Sir Brian Roche, chief executive of the Public Service Commission, says he agrees with Stanford the project failure at Immigration NZ was “at best unhelpful”.
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“It raises a number of questions — not just about integrity and culture — but the way we manage projects. That’s part of why I want to investigate it,” he said, in regard to the investigation instigated by the minister.
Roche is also the Government’s chief digital officer (GCDO), now in charge of overseeing its IT agenda following a transfer of functions from the Department of Internal Affairs in April.
What is being envisaged is a combination of structural and technological reforms, he says.
“There is bringing agencies together, there’s simplifying systems and processes, removing corporate functions, removing duplication, adopting technology and AI.
“It would be the biggest change in the public sector since the late 1980s, a very significant change.”
The race for results
But he has his work cut out if the adoption of more technology is to play a significant role in helping the public sector cope with the 12% baseline funding cuts that many agencies will be expected to achieve over the next three years.
“We can’t cost cut our way out of this fiscal challenge, we have to effectively reinvent ourselves,” Roche says.
But the steepest cuts start in just a year’s time, when agencies face the first of two 5% annual cuts.
That leaves little time to set priorities and approve business cases from what appears to be, at least from the outside, a standing start.
Former minister for digitising government Judith Collins tasked the GCDO with reporting back by December last year on “a digital government target state, supported by a three-year programme of annual priorities, targets and milestones”.
Former GCDO Colin Macdonald said at the time he would be looking for whether there was a clear target state, a programme of work in place, agency buy-in, and clarity on who was responsible for delivery.
However, the target state — at least what has been publicly released to date — essentially amounts to a one-page diagram.
One technologist described that as simply depicting a digital nirvana, where agencies were supported by shared core services that fitted into a common architecture, but without any clear work programme.
Industry insiders say more flesh has been put on those bones behind the scenes.
But Roche doesn’t push back on the suggestion the “target state” is a bit thin, while playing down the suggestion the public service is up against an impossible deadline.
Agencies have got until October to come up with plans, so the PSC can give advice to whichever government takes office after the election, he says.
“We need to use the next six months really wisely.
“We’re going to have to be really smart about sequencing, because we have to maintain the services at the same time as we change them, and that’s not always been a hallmark of success.”
Déjà vu?
“I look at the fact that we’ve got, I think, more than 40 payroll systems, we’ve got multiple enterprise systems,” Roche says from his Bowen House office, commenting on the potential for consolidation.
“We’ve got some complicated payrolls, but they’re by exception. In this building, we’ve got eight or nine government agencies and we’ve all got our own corporate function — from a taxpayer perspective is that good value for money?”
Cynics may note policy-makers have “been there, but not really done that”, at least once before.
Roche’s words are eerily similar to those uttered by former Labour minister Trevor Mallard a full 27 years ago, in 1999, when he was masterminding a similar drive for efficiencies.
Mallard told The Post then that he wanted to see the creation of a new body to oversee public sector IT projects and seek economies of scale in purchasing, complaining agencies were acting as “silos that never talk to each other, other than right at the top”.
“We seem to have scores of payroll systems, for example, some of them servicing very small units, and it occurs to me that we should be using economies of scale to get better and cheaper services,” Mallard said — just before the turn of the century.
Different, this time?
Mallard’s bid to break down the silos floundered in part due to pushback from public service chief executives, some of whom advanced the view that in order to be truly accountable for their departments they needed to control everything that went on within them — including IT.
Collins appeared to remove that obstacle last year when she announced most IT procurement would be centralised in the hands of the GCDO.
Her portfolio, now held by Paul Goldsmith, and Willis, would get veto rights over agencies’ investment proposals, she also announced.
Just how quickly change can be driven from the centre may be a moot point though.
Knowledge of agencies’ functions and technical skills are dispersed across the public service among staff many of whom feel increasingly overworked and undervalued, according to engagement surveys.
One senior figure in the capital’s IT sector voices concern over the degree to which agencies’ planning functions have been hollowed out over the past two years, when the focus has been on keeping services running.
But he also warns it is not realistic to expect different results from the same people, and argues there is a need for fresh blood.
Roche says he has more powers than his predecessors in the GCDO role “and will exercise those powers if I need to”, but reveals there is still ongoing dialogue over what that may mean in practice.
“What we want to avoid is the ‘centre’ having all of the power. I think we want a strong centre, but it doesn’t have to be a controlling centre on every single thing — so that's the bit that we're working through,” he says.
Spend to save?
Roche accepts a desire to maintain departmental fiefdoms isn’t the only reason the public sector hasn’t ended up on, say, one payroll system.
In the case of some agencies, they may be part of a wider software system, and each will have a contract with an existing vendor that expires at different times, he agrees.
Macdonald suggested last year that meant consolidation might require an agency spending money upfront to provide a common platform for others, a potentially big ask given the baseline funding cuts.
Roche says he feels strongly “that you need to ‘invest to save’.”
“The Minister of Finance agrees with that proposition,” he adds.
“We haven’t worked through exactly what that means, but if we accept that we need to have a different operating model or a different service model, then we are going to have to innovate our way out of that.
“That is going to require really good human leadership and good technology, and money.”