Neil Sands
The Ministry of Justice is refusing to reveal the extent of budget blowouts on its troubled courts digitisation programme, citing ongoing commercial negotiations, even though the main contract for the project was signed more than three years ago.
Justice Secretary Andrew Kibblewhite has promised Te Au Reka (‘the sweet flow’ in te reo) will deliver generational change to the courts, providing a 21st century replacement for current paper-based case management systems that he says rely on post-it notes.
Andrew Kibblewhite
But the hype around the new system, which has been developed with extensive input from the judiciary, has been tarnished by issues that have seen cost overruns and launch delays.
The added burden for taxpayers is unknown, as public references to Te Au Reka’s budget by officials at recent select committee hearings have been limited to vague reassurances, prompting LawNews to submit an Official Information Act (OIA) request in a bid to determine a dollar figure.
The MoJ’s response, which arrived four weeks after the original OIA-mandated deadline, was almost 400 pages of documentation with all references to the project’s overall budget redacted, including figures that have previously been made public.
What the documents do reveal, however, is that the project’s problems were so serious that the MoJ considered scrapping it in February 2025, deciding against the radical move because it risked “undermining the confidence built with the [legal] profession and the judiciary to date, and their ability and willingness to invest their time”.
They also show that Kibblewhite pushed for a launch date in September this year because he was “mindful of the election period”, prompting a warning from independent quality assurance experts that deploying prematurely could result in “suboptimal outcomes” and erode confidence in the entire project.
The MoJ paid heed to the advice and rather than a rushed pre-election launch, the first phase of Te Au Reka is currently scheduled to launch on November 23 in the Family Court in Christchurch and Ashburton, although a four-month contingency has been built in should any more problems emerge.
Funding assurance falls flat
In justifying MoJ’s refusal to release the project’s budget, Deputy Secretary Te Au Reka Victoria McLaughlin said: “The programme remains engaged in commercial negotiations and releasing programme budget information would likely unreasonably prejudice the ministry’s position.”
This appears to contradict a submission to Cabinet dated 27 March 2025 – signed off by Kibblewhite and McLaughlin – that said: “The commercial arrangements have now been substantially confirmed.”
The contract for the project was signed with DXC Technology in August 2023. It involves DXC using a suite of Microsoft products to set up a case management system that will “modernise the administration of justice through the courts and tribunals of New Zealand”.
At the time the contract was inked, Kibblewhite told Parliament’s Justice Select Committee that the budget was “in the order of” $139 million for capital expenditure and $30 million for operating expenses.
McLaughlin told the select committee in September 2024 that while the project had experienced teething problems, “we’re looking at the figures now, just in the process of making sure we’re within all the envelopes, as you’d expect, but we’re not looking at the moment for any new funding”.
Just two months after McLaughlin’s assurance, a Cabinet document shows MoJ advised ministers overseeing the project “that the preliminary estimate of total cost [$ amount redacted] was higher than was set out in Budget 2022 [$ amount redacted]. This was driven primarily by increases in licence and supplier costs, and duration”.
By April 2025, the project budget was increased as part of an updated business case approved by relevant ministers, Nicola Willis (Finance), Paul Goldsmith (Justice), and Nicole McKee (Courts). No details were released at the time and it was only a year later, in the select committee’s annual review of the MoJ, that it was revealed costs had blown out by about 15%.
In June this year, Kibblewhite provided his own funding assurance to the committee, saying the project cost “will be within the overarching budget parameters that we’ve set for it”. MoJ declined to provide details of the parameters Kibblewhite was referring to, or to specify what level of budget variation it considers acceptable.
‘It’s a joke’
Budgets for public service IT projects have come under renewed scrutiny in recent months because of the scandal surrounding Immigration NZ’s failed Biometric Capability Upgrade (BCU), which has so far resulted in write-offs exceeding $50 million.
Top officials from Ministry of Business, Innovation and Employment (MBIE) were found in contempt of Parliament last month for deliberately misleading a select committee about the project’s finances, later claiming “commercial sensitivity” as an excuse for their lack of candour.
There is no suggestion MoJ has engaged in similar conduct, but Rhys Hurley, the Taxpayers’ Union investigative lead, said redacting costs for Te Au Reka was “a textbook case of New Zealand’s transparency problem”.
“Claiming these figures now can’t be released is a joke. If officials told Cabinet last year that commercial arrangements were ‘substantially confirmed’, they need to explain why those same arrangements are apparently still too commercially sensitive for taxpayers to see,” he said.
“The status quo is already stacked against members of the public trying to find out how their money is being spent. The last thing we need is this same ministry’s review of the Official Information Act making it even harder to get similar information.”
“Taxpayers have every right to know when major government projects blow their budgets. It’s exactly why we need armchair audits, requiring councils and government agencies to publish detailed spending information online.”
McLaughlin Te Au Reka’s whole-of-life costs were estimated at the project’s outset, but were expected to be refined through updated business cases as it progressed, taking into account factors such as timeframes, support requirements, and commercial arrangements.
“This staged approach provides ministers with greater cost and delivery certainty before further funding is committed,” she said.
‘Off-track, intervention needed’
The documents released under OIA reveal some of the challenges Te Au Reka has faced. A quality assurance assessment from March 2023 says budget increases are “mainly due to increased vendor costs due to the vendor [DXC] identifying that the solution is more complex than they anticipated”.
Another issue was the need for a larger Te Au Reka team at MoJ because DXC had also underestimated the complexity of training people on the new system, forcing the ministry to bring training in-house.
As a result of the issues with DXC, MoJ added a new commercial risk to its planning framework: “If the vendor has not estimated the effort associated with time and materials services correctly, then it will impact the ability to manage costs and delivery timelines. Which will result in a degradation in trust and confidence in the programme.”
While the option of scrapping the project was rejected in February 2025, problems continued and in June that year it became clear the original phase 1 launch date of mid-2026 would not be met.
“The SRO [senior responsible owner, McLaughlin] moved the programme to a Red RAG status (meaning it was off-track, and intervention was needed),” an independent quality assurance (IQA) review said. “An intensive review period followed, to identify contributing factors to this risk.”
The most recent IQA, from March this year, outlined concerns among project staff that “underlying plans were either not visible or lacked credibility”, meaning they were not confident of achieving the current launch target in November.
“We heard a dominant theme of ‘insufficient integrated plan’ and ‘unclear critical path’. And comments around inconsistent quality of underlying plans, and tasks within the plans which are ‘plans to build a plan’, rather than activities to achieve programme outcomes.”
However, the review concluded that there had been “measured and genuine progress” responding to earlier concerns.
“There is clear evidence of increased focus on governance engagement, leadership capability, technical architecture, and change management,” it said.
Delivering digital documents and job cuts
Despite the problems, Kibblewhite was enthusiastic about Te Au Reka’s potential impact at his most recent appearance before the Justice Select Committee in June.
“We’re going to have a digitally based case-management system that lawyers will be able to engage with and over time will absolutely transform the way the court functions and open up a lot of new opportunities,” he said, describing it as “one of the most complex IT-underpinned changes in the country”.
In addition to efficiencies from digitised documentation, Kibblewhite also talked up Te Au Reka’s role in facilitating Finance Minister Nicola Willis’ plans to axe almost 9,000 public service jobs over the next three years.
“Our trajectory over the next two or three years is very clear,” he said. “We’ll be able to reduce our headcount. I think ministry staff are not under any illusion that their work worlds are going to change… the ministry will be smaller in the future, I’m sure of that.”
LawNews asked in the OIA how many job losses could result from Te Au Reka’s implementation. McLaughlin responded: “The ministry can advise that this is under active consideration. Therefore, I am refusing these parts of your request.”
As it stands, Te Au Reka is still on schedule to launch in Family Court in Christchurch and Ashburton for registry and judicial purposes only on November 23, with the full portal full operational at the two sites by March 2027, then live nationwide across the Family Court two months later.
Phase two, in the second half of 2027, will bring the new system to the criminal jurisdiction in the District Court including the Youth and Civil Courts, and the High Court.
Phase three in 2028 involves the Court of Appeal, Supreme Court, Environment Court, Coroners Court, and the Disputes Tribunal, as well as appeals in the District and High Courts.
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