A new digital direction that keeps New Zealand in control

When Government Chief Digital Officer Paul James was given new powers to reshape how public agencies buy and build technology, it marked one of the biggest shifts in government IT in decades. Centralising decision-making within the Department of Internal Affairs with a mandate to standardise, save and transform, the initiative aims to end years of fragmented development.

The new approach introduces a more coordinated model for how government agencies design, procure and deliver digital services, a move expected to save as much as 30 per cent on the projected $13 billion public-sector technology spend over the next five years – that's a potential saving of up to $3.9 billion each year.

I'm backing this direction because the principles behind it align perfectly with what many of us in the New Zealand tech sector have been demonstrating for years through open standards and open source solutions. This direction also aligns well with the almost infinite capabilities and ingenuity of the broader Kiwi digital sector.

The new framework announced by Digital Minister the Hon Judith Collins KC hasn't mandated open source specifically. What it has done is commit to prioritising "reuse of existing digital assets and buying off the shelf rather than bespoke components", choosing "Cloud wherever practical and lowest cost", and avoiding the "high-cost solutions that take years to deliver".  

The technology to address the principles the Cabinet paper describes – faster, more affordable, reusable – is available right now.

The Cabinet paper notes a problem with its legacy approach: "Evidence tells us that the bigger and longer digital projects are, the more likely they are to fail. According to Treasury data, 59 per cent of core digital projects are behind schedule and 85 per cent of digital investment in the planning and delivery stages are rated 'high risk'."

This legacy approach has produced Government technology that is costly and inconsistent, with individual agencies developing bespoke solutions that rarely talk to each other. The Cabinet paper identifies the scale of this clearly: "29 agencies plan to spend $1.78 billion on similar service delivery systems".

Consider a common scenario: someone needing to update personal details after moving house or starting a new job. Currently, they might have to repeat the process across multiple agencies – updating their address with IRD, the Electoral Commission, their driver's licence provider, and potentially several other departments. Each interaction requires separate logins, different forms, and duplicated effort.

Under a unified open source framework, the same secure digital identity and data-sharing standards could allow updates to flow automatically, with individuals remaining in control. That's the kind of interoperability the GCDO vision enables, and it's one that many in the sector have long championed.

The technology to deliver this has existed for years. Countries such as Estonia have been doing it since the 1990s. Companies across New Zealand have built similar systems here. What's been missing is the coordinated approach and policy settings to make it happen across government. The time is now.

The guiding principles at the heart of the programme align naturally with how open source development works.

Standardise: Open source solutions rely on shared standards and transparent code. This reduces duplication, enables interoperability and enables agencies to build once and reuse many times.

DIA has itself been a leader in applying an open source mindset and approach before. It enabled collaborative frameworks and inclusive governance structures that work - and keep working long-term. Now, it has the capability to apply that approach at scale with this powerful mandate.

Save: When software is freely available to adapt and extend, investment shifts from expensive licensing to local skills and service improvement.

Transform: Open source development is inherently collaborative and evolutionary, ensuring Government systems stay flexible and future-ready.

We've seen this work in practice across the sector.

When COVID hit and the Government needed a financial help tool urgently, we built it in six days. When 11 district health boards needed to train more than 20,000 healthcare workers efficiently, we delivered a shared platform that saves $270,000 every year. When councils needed to coordinate infrastructure work, we built a system that is estimated to have saved over $15 million in its first 18 months.

By reusing proven components and adapting them to local needs, agencies can accelerate delivery while reducing risk. Smaller, iterative builds deliver visible results within months and evolve as user needs change.

We can also strengthen New Zealand's digital independence, with open systems that run on New Zealand-owned infrastructure, under New Zealand jurisdiction – ensuring value stays within the local ecosystem. Instead of paying perpetual licensing fees to overseas vendors, agencies can invest in New Zealand developers and researchers who maintain and enhance shared platforms. This builds resilience by growing domestic capability rather than deepening dependency on global corporations.

The GCDO direction creates a real opportunity to level the playing field. If Government is serious about 'standardise, save, transform', then open source offers a proven route to achieve it. The principles Cabinet has set align naturally with open source approaches, but they're not automatic. They require intentional choices about which technologies to prioritise and what "lowest cost" really means over time.

For the first time, New Zealand has both the architectural authority and the economic incentive to make this shift; the potential $3.9 billion in savings each year is simply too large to ignore.

Collaboration across government, industry and community will be essential to delivering on the GCDO’s vision. Success will depend on cultural as much as technical change. It's about trust, transparency and openness.

The GCDO direction represents a once-in-a-generation chance to re-imagine New Zealand's public sector. We've spent nearly three decades demonstrating what works: shared platforms that agencies can adapt, investments that build local capability, and infrastructure that New Zealand genuinely controls. The technology is proven. The savings are documented. The capability exists right here in Aotearoa.

What matters now is how these principles are put into practice.

If you have media questions about Catalyst IT or our approach to development, contact our team: [email protected]