The head of one of New Zealand's biggest government ministries has admitted it "got things wrong" by not telling MPs that a $35 million technology project had been cancelled. Nic Blakeley, the chief executive of MBIE (the Ministry of Business, Innovation and Employment), made the admission to a parliamentary committee that investigates whether Parliament's rules have been broken. RNZ

The project was called the Biometric Capability Update, or BCU. It was meant to build a new system for handling biometric data — things like fingerprints and facial recognition. The project was axed after costs ballooned beyond its original $35 million budget. RNZ

Here is how the problem started. In March, MBIE appeared before a group of MPs called a select committee. Select committees are small cross-party groups that check up on what government agencies are doing. MBIE told the committee there was no public review of the BCU project's progress. But the project had already been cancelled at that point. In June, the Speaker of the House, Gerry Brownlee, sent the matter to the Privileges Committee — a body that looks into whether Parliament's rules have been breached — after Labour MP Phil Twyford and the committee itself raised concerns. RNZ

Blakeley told the committee the ministry believed Budget and commercial sensitivities limited what could be said publicly. At the time, MBIE was still negotiating final payments with NEC, a Japanese technology company hired to build the system. But Blakeley conceded those constraints did not prevent the ministry from sharing the information privately with MPs. He acknowledged MBIE could have asked for a hearing with the public removed — sometimes called a "secret hearing" — to tell the committee about the cancellation while protecting the commercial negotiations. He accepted that not doing so was a mistake. RNZ

Blakeley said the decision not to disclose the cancellation was not an "active decision" but an understanding between himself and then-Immigration New Zealand head Alison McDonald that commercial sensitivities limited what they could say. RNZ

McDonald, who has since retired, gave evidence to the committee by video call from the UK. Her account differed from Blakeley's. McDonald told MPs that in her mind the BCU programme "had not stopped" — a striking thing to say, given the project had been terminated and final-payment negotiations were underway. The exchange revealed that the two senior officials had different understandings of whether the programme was still going. RNZ

The chair of the Privileges Committee, Chris Bishop, did not hold back. He told Blakeley the situation "beggars belief" and described the BCU project itself as "a disaster." His words reflect the frustration among committee members that a government agency appeared to fall short of its basic duty to be straightforward with Parliament. RNZ

An MBIE review published on its website in April set out the scale of the problems. The review found the project was "largely treated as an IT project rather than a business-driven" one. In plain terms, that means the people who would actually use the system were not driving it — and the ministry was leaning too heavily on technology to solve operational problems. MBIE

That review also confirmed the financial picture. Estimated costs for the BCU were expected to exceed the $35 million figure, reinforcing what was at stake financially when MBIE failed to tell the committee in March. MBIE

The broader context here is about how government agencies balance keeping commercial details private against their duty to be open with Parliament. The Privileges Committee process is what tests that balance. Blakeley's concession that a confidential hearing was available, and that MBIE failed to use it, is the heart of the matter. The tools exist for agencies to share sensitive information with MPs without compromising commercial negotiations. MBIE did not use them, and the ministry's chief executive has now admitted that was wrong.

McDonald's evidence adds another layer. If two senior officials genuinely disagreed about whether a programme had stopped, that suggests poor internal communication at exactly the moment when accountability to Parliament was on the line. Bishop's blunt language signals the committee is unlikely to see this as a minor administrative slip-up.

The wider issue is the long-standing expectation that government departments must give select committees truthful information. When an agency withholds an important fact, it can cite commercial sensitivity as a reason — but that defence is not absolute. The Privileges Committee polices that boundary, and MPs from all parties have shown little patience for agencies that fall short. The BCU case will test what consequences, if any, follow from a chief executive's admission of error.