The chief executive of the Ministry of Business, Innovation and Employment has accepted the ministry got things wrong when it did not disclose information to MPs about a cancelled IT project earlier this year.

But he denies the ministry deliberately attempted to mislead Parliament.

In March, MBIE failed to tell Parliament's Education and Workforce Committee that the $35 million Biometric Capability Update (BCU) project had been axed, telling MPs there was no public review about its progress.

In reality, the project was already dead.

In June, Speaker Gerry Brownlee referred the matter to the Privileges Committee, after Labour's Phil Twyford and the Education and Workforce Committee both raised it as a matter of privilege.

Appearing before the Privileges Committee on Tuesday evening, MBIE chief executive Nic Blakeley said the ministry had a "genuinely held belief" that there were Budget and commercial sensitivities limiting what it could say in a public forum.

"In hindsight, we should have taken a different approach."

Committee chair Chris Bishop asked why, when asked in March about the key risks and milestones in the project's implementation, Blakeley could not simply say it had been terminated.

"I agree. We got it wrong. I accept that and we should have said differently," Blakeley said.

He added MBIE was still in negotiations over a final payment to Japanese tech company NEC over the project at the time, and so it was concerned that talking about it publicly would make it difficult to conclude those negotiations.

He also accepted MBIE could have gone into a "secret hearing" with the public removed from the committee room.

The decision not to talk about it was not an active decision, he insisted, but more an understanding between himself and Immigration New Zealand's then-boss Alison McDonald that there were sensitivities that limited what they could say.

Blakeley acknowledged that too was a failing.

National's Scott Simpson said given Twyford had been asking questions and filing Official Information Act requests before the meeting, it should have been a sufficient flag.

"I agree with you," Blakeley replied.

"It's surprising, in hindsight, that there's no written material on BCU that shows that we weren't well enough prepared, and I accept that."

ACT's Parmjeet Parmar asked Blakeley whether he was happy with the information the ministry had provided.

"At the time, I didn't think I was doing anything wrong. I thought I was answering the questions as best I could, given the limitations that we had."

Parmar also questioned whether there were discussions after the hearing in March about what was said.

"We felt that we'd raised the questions as best we could, given the limitations we were under," Blakeley replied.

An audibly and visibly frustrated Bishop said the entire situation "beggars belief".

"The project was a disaster. The fact that no-one bothered to prepare to explain why it was a disaster, that's both terrible and good for you, bad for the public service," Bishop told Blakeley.

Blakeley would not answer questions from media following the hearing, saying he would wait for the Committee's findings.

Appearing via Zoom from the United Kingdom, the now-retired McDonald said in her mind, the programme had not stopped.

"It hadn't stopped. It had carried on going. The IT project was one element of the identity programme and we had done a lot of preparation around our future services, which is the big IT overhaul piece, if you like, for Immigration New Zealand.

"The biometric capability IT project wasn't managed by me or Immigration New Zealand. It was managed by another part of MBIE."

Bishop asked why McDonald was fronting on it if Immigration New Zealand had nothing to do with it.

McDonald explained the deputy secretary responsible had just resigned and Blakeley had only just started in an acting capacity.

"I honestly thought I was trying to help the committee understand that we were moving in a different direction. On reflection, that was the wrong thing to do."

She accepted that when Tywford was asking about milestones, she should have "paused a bit" and realised he was asking about the IT project specifically, rather than the wider work programme.

"I had no intention whatsoever to mislead the select committee and I find the suggestion that I might have acted deliberately to mislead Parliament extremely distressing," she said.

 

Immigration minister Erica Stanford has accused the ministry of deliberately witholding information from her and the previous Labour government about the project.

On Tuesday morning, Stanford would not presuppose what happened in the hearing.

"I'm hoping that they will tell the truth. I know that they will," she said.