After pouring $45 million in to fixing Novopay, the
teachers' payroll system is no longer a "dog" and teachers will
be thankful that the Government has taken it over Prime
Minister John Key says.
Senior Cabinet Minister Steven Joyce, who last year described
Novopay as "a dog" today said a Government-owned company
would assume management of the system from Australian company
Talent2 from October this year.
He said "pretty good progress" had been made in recent months
to fix the system which has been plagued with problems
including large numbers of over and under payments to
teachers since it was introduced in 2012.
However remaining issues prompted contractual issues in
recent weeks and Talent2 had not been prepared to provide
extra resources necessary for further development of the
It had become clear "that the best outcome would be a change
in the provider relationship".
Opposition parties seized on today's announcement as yet
another admission from the Government that the system had
been a costly disaster, but Mr Key defended the decision.
"If you look forward, the sector will take quite a lot of
confidence that effectively the Government is taking over the
programme and the project. They'll know it will be properly
resourced and properly looked after."
When reminded that Mr Joyce had called it a dog he said,
"Yeah but I think it's come a long way since then".
"It's actually fundamentally operating pretty well. This is a
very complex sector there's a lot of different pay scales for
teachers, it's not an easy thing. But the Government has
stabilised it and got it working reasonably effectively and I
think a lot of teachers will say thank goodness the
Government now has some control over the process."
He said it was possible to make the argument the Government
should have assumed control earlier, "and hindsight's a
However the Government had now made "the right call" over the
system which he said was originally signed up to by the
previous Labour Government.
President of the New Zealand Principals' Federation Philip
Harding said his members were encouraged that Talent2 had
withdrawn from managing the system, but warned "there is a
long way to go before principals will have any confidence in
"The announcement does not cure the Novopay shambles that the
sector has been battling for the last three years.
"The same challenges of random errors, frustratingly slow
problem resolution, inaccurate personnel data, and
significantly increased workload will continue," he said.
"Success will be determined by the way the new entity is
managed, and more importantly, resourced to deal to these
Meanwhile, Mr Joyce earlier confirmed Talent2 will pay the
Ministry of Education between $18 million and $22 million
including $7m cash and other considerations such as license
to use the core software by way of a settlement.
That sum was set against the $45 million the Government had
paid to address the problems with the system. Overall Novopay
had cost $110 million to date.
Mr Joyce said the agreement for the Government to take over
should"not necessarily be seen as failure on anyone's part
any more than it had been".
It was, he said, "the next logical step".
"This decision has been made in the best interests of all
parties -- staff administrators, schools and the Government."
Talent2 said the "mutual agreement" settled a "flawed
contractual arrangement" between itself and the Ministry of
"This change allows Talent2 to better focus resources and
investment on its core payroll business and broader New
Zealand client base."
Labour's education spokesman Chris Hipkins said the
announcement today would be "cold comfort to teachers and
school staff still struggling with Novopay" and Talent2 was
"dropping a hot potato in the taxpayer's lap".
"Goodness knows how much more [money] will be shovelled down
this black hole before the problems are finally fixed."
He questioned why Education Minister Hekia Parata signed off
on the system and why it had taken Mr Joyce so long "to
finally decide to take action".
"Teachers and school staff have waited long enough for
Novopay to be fixed. It has taken up their valuable teaching
time, as well as hours and hours of school administration.
Students and parents have also paid the price for this
NZ First education spokeswoman Tracey Martin said Mr Joyce
had "admitted defeat" in cutting Talent2 loose.
"Mr Joyce cannot fix a system that National got so wrong in
the first place, and has wasted tens of millions of
taxpayers' dollars on."
- By Adam Bennett of the New Zealand Herald