The head of one of the government's biggest ministries has denied trying to mislead Parliament over a cancelled $35 million technology project. Nic Blakeley, the chief executive of the Ministry of Business, Innovation and Employment (MBIE), told a parliamentary committee that the ministry stayed quiet about the project's cancellation because of budget and commercial concerns, not because it wanted to deceive anyone.

Blakeley appeared before a group of MPs called the Privileges Committee on Tuesday evening. The committee, chaired by National MP Chris Bishop, investigates when Parliament's rules may have been broken. The question was why MBIE did not tell another committee, the Education and Workforce Committee, back in March that the project had been cancelled. The project, run with Japanese technology company NEC, was meant to upgrade the systems Immigration New Zealand uses to identify people through things like fingerprints and facial scans. RNZ

In June, the Speaker of the House, Gerry Brownlee, sent the matter to the Privileges Committee after Labour MP Phil Twyford and the Education and Workforce Committee raised it as a breach of Parliament's rules. This followed reporting by RNZ journalist Gill Bonnett, who revealed in a 23 June article that the committee had not been told the project was cancelled. RNZ

Blakeley told the committee that MBIE genuinely believed budget and commercial concerns limited what it could say in a public setting. He said the ministry was still negotiating with NEC over a final payment at the time of the March appearance, which contributed to the decision not to disclose the cancellation. RNZ

When pushed, Blakeley acknowledged MBIE got it wrong. He said that, looking back, the ministry should have handled it differently. He admitted MBIE could have asked for a private session where the public is removed from the room, so the committee could be told about the cancellation without the sensitive commercial details becoming public. RNZ

Blakeley said the decision to stay quiet was not a formal decision but an understanding between himself and the then-head of Immigration New Zealand, Alison McDonald, who has since retired. RNZ

Blakeley has previously apologised to MPs over the matter. The Public Service Commissioner, Sir Brian Roche, has outlined a wider inquiry into government IT upgrades that includes the failed MBIE project. RNZ

RNZ also published a follow-up investigation on 21 July, titled "From achievable to unlikely in nine days: Immigration NZ's botched $35m project," which traced how quickly the project fell apart. RNZ

After the Privileges Committee hearing, Blakeley refused to answer questions from media. RNZ

The hearing came down to a basic rule of the public service: when government agencies appear before committees of MPs, they are expected to be open and honest with Parliament. The Privileges Committee exists to make sure that happens. The argument is not about whether the project failed or about the $35 million cost. It is about whether MBIE's silence in March was a breach of Parliament's trust. Blakeley's defence is that this was a misjudgment born of genuine concern about commercial confidentiality, not a deliberate attempt to deceive.

The broader context here is a tension that comes up again and again for government agencies: the pull between keeping commercial details private and being answerable to Parliament. It is similar to being in the middle of a sensitive contract negotiation and being asked to talk about it openly in a meeting — there is a genuine tension between being transparent and protecting your position. Blakeley's admission that MBIE could have used a private session weakens the ministry's main defence, because Parliament's rules specifically allow for closed sessions when public disclosure is a genuine problem. The Privileges Committee will have to decide whether the difference between what MBIE could have said privately and what it chose not to say at all is serious enough to count as a breach. The fact that the decision to stay quiet came from an informal understanding rather than a documented, formal decision is unlikely to help the ministry's case. The committee will also have to think about the example it sets for other agencies in similar situations. With the Public Service Commission running a wider inquiry into government IT projects at the same time, the BCU case is being looked at on two fronts, and whatever the committee decides will likely affect how open public servants are expected to be when projects fall apart.