Two more government IT projects hit trouble as agencies struggle to change course
Two more major government IT projects are in difficulty, with the Ministry of Justice's expansion of audio-visual links in courts rated "red" and Internal Affairs' civil registration replacement still unable to present options to Cabinet, according to RNZ.
The Justice Ministry's audio-visual links project — which would let people appear in court by video rather than in person — received a "red" rating last year, meaning the Treasury considers it "appears unachievable" on its project assurance scale. The ministry told RNZ it has since revised the project but is six to eight weeks away from revealing details. An early business case was meant to have been completed by this month.
Internal Affairs' Civil Registration project, which would replace the system New Zealanders use to access birth, death and marriage records, is delayed for years. The department's first attempt, launched in 2024, was written off at a cost of $213 million when it was scrapped. Internal Affairs is still in dispute with the Australian company DWS over that terminated contract.
A second attempt at the replacement received an amber/red rating in an independent Gateway review in January. Gateway reviews are independent assessments used across the public sector to check whether major projects are on track. The review found the need for system replacement was compelling, but more work was required before the indicative business case was ready to go to government. Internal Affairs has not yet decided what is needed for the replacement and will not lay options out to Cabinet for approval until next year.
The difficulties at Justice and Internal Affairs come as the government's own digital leadership is telling ministers that agencies are not changing their approach. The government chief digital officer told ministers that agencies' proposed digital investments continue to be siloed — meaning each agency builds its own systems independently rather than sharing — duplicative, and deliver little system benefit, according to the latest available Treasury report for the December 2025 quarter. The government chief data steward told ministers in the same report that investment initiatives submitted by agencies over the past six quarters point to continued low confidence about their capacity to deploy the internal expertise needed to support their projects.
The chief digital officer told chief executives last year to start pooling resources to build IT and stick to government standards under Cabinet's "Back-Office Transformation" initiative. The Treasury report for December 2025 indicates that message has not yet translated into changed behaviour across agencies.
MBIE, the country's largest ministry, wasted more than $30 million on a failed biometric system that sparked investigations in Parliament. Te Whatu Ora offered to pay big tech firms thousands of dollars to run tests on failing Wellington hospital IT systems, then awarded a contract to one of them, RNZ reported.
The pattern extends to infrastructure delivery. RNZ reported last year that the government's fast-track approvals regime for major projects will be a "slow track" unless the country addresses its "hotchpotch" of data systems.
A rapid review published last month found that digital investment across government is fragmented and prioritisation of digital projects is weak. The review of the public sector technology system criticised it as poorly informed, poorly coordinated and overly focused on process, prompting calls for a government digital "reset", according to iStart and Global Government Forum.
New Zealand's standing internationally has slipped. In the OECD's Digital Government Outlook 2026, published in June, New Zealand scored 0.48, below the OECD average of 0.70 and a 0.02 decrease since 2023, according to the OECD.
The government's Digitising Government Programme seeks to implement a more centralised and coordinated approach to digital investment, procurement and delivery. The Strategy for a Digital Public Service calls for integrated services instead of siloed agency services and supports investment in modern systems that enable reuse of data, rules and transactions. Moving away from legacy systems is part of that strategy. Government guidance defines a legacy system as an outdated computer system or application still in use that is obsolete — the kind of system that is expensive to maintain, often costing more than replacement, and incompatible with mobile, web and cloud applications and modern security frameworks.
Under that guidance, technology becomes legacy if it is end-of-life, out of supplier support, impossible to update, no longer cost-effective, above acceptable risk thresholds, or diminishing in business utility. Processes and technical information for these systems are frequently undocumented, leaving organisations reliant on the institutional knowledge of individual employees and making disaster recovery difficult. The lack of security patches for older systems increases vulnerability, and systems running for years often perform slowly, consume more resources and fail more often. The first step to moving away from them, the guidance states, is identifying obsolete systems and developing a migration plan.
The government also directs agencies to CERT NZ for guidance on understanding the risk of legacy systems and how to manage them.
The broader context here is that New Zealand has the policy architecture in place. The Plain Language Act 2022 requires public service agencies and crown agents to communicate in plain language. Web Accessibility and Web Usability Standards took effect from 17 March 2025. The Public Service AI Work Programme lays out a two-year plan of AI initiatives to improve public services. What the Treasury report, the Gateway reviews and the OECD score all suggest is that implementation is not keeping pace with the strategy. Agencies continue to propose investments that duplicate existing capability, lack the internal expertise to deliver them, and in some cases have already cost hundreds of millions of dollars in write-offs.
For those working in and around the system, the question is whether the Digitising Government Programme and the Back-Office Transformation directive can shift entrenched agency behaviour before the next round of project failures produces another set of red ratings and write-offs. The December 2025 Treasury report offers little evidence of that shift yet.
