9. MOANA MACKEY (Labour) Link to this
to the Minister of Housing
Does he agree with Housing New Zealand that the Enterprise Transformation Programme to replace existing IT systems is expected to result in savings of $70 million per year; if so, how was this figure calculated?
Hon MAURICE WILLIAMSON (Acting Minister of Housing) Link to this
Although this is an operational matter, I have been advised by the chief executive that the draft business case on the Enterprise Transformation Programme, which has yet to be approved by the board, has outlined up to $70 million per annum of expected efficiencies. With regard to the second part of the question, I advise the member that this figure was calculated very carefully.
Given that last week Housing New Zealand Corporation was forced to admit that the cost of scoping the business case had almost doubled, to $10 million, can he guarantee to the House that costs will not blow out even further, given claims from insiders that the costs to date are in excess of $20 million?
Hon MAURICE WILLIAMSON Link to this
I really do not quite understand where the member is coming from. This project was initiated by Housing New Zealand Corporation when her party was in power. Deloitte was chosen by Housing New Zealand Corporation to be the key partner when her party was in power, so—
Mr SPEAKERI apologise to the Minister for interrupting him, but I think the question that Moana Mackey asked was a reasonable one, about whether there are risks of the costs of the project escalating. I think the answer should focus somewhat on that.
Hon MAURICE WILLIAMSON Link to this
I will be very happy to come to that point, as the last part of my answer. Therefore, so much of what is happening now was put in train before National came into Government. But we have put all sorts of extra monitoring in place. This programme is being looked at by Treasury, and the State Services Commission did a check on it. Yes, we will make sure that best practice is followed, even though in the end all the decisions that are made are a fully operational matter for Housing New Zealand Corporation itself.
How does he reconcile claims by Housing New Zealand Corporation that its systems are so outdated that it is becoming difficult to conduct its business with a report from Resultex, commissioned by Housing New Zealand Corporation, that says the existing information technology systems are reliable and “there was not a single issue raised that related to the reliability of the underlying infrastructure. This is so unusual as to merit specific mention.”?
Hon MAURICE WILLIAMSON Link to this
I can tell the House that a number of the information technology systems that Housing New Zealand Corporation is currently using, such as Rentel, were developed in 1993. That, by my calculation, is 17 years ago. I tell that member that any information technology system as old as that is not valid for modern-day requirements. The specifics that this Government has put on Housing New Zealand Corporation for the delivery of service require the corporation to have modern-day information systems in order for it to do its job.
Is he even aware that Housing New Zealand Corporation commissioned a report from consultancy firm Resultex, which independently reviewed its systems and concluded that the existing systems are very reliable and suffered remarkably little downtime, and which conclusively rejected claims that the existing systems are no longer fit for their purpose?
Hon MAURICE WILLIAMSON Link to this
I and the Minister of Finance, as shareholding Ministers, are doing what we should be doing as Ministers—that is, keeping a watching brief, asking the corporation to keep us well informed of progress, and using State agencies like Treasury and the State Services Commission to do the detailed monitoring. But in the end, finally, after the business case is finalised, this decision will be made by the corporation. The chairman of the corporation has offered to that member the opportunity to come and discuss it with him, and she has not yet taken him up on that offer.
Given how much pains he took at yesterday’s Māori housing conference to stress that there is not a single extra cent left in the coffers to fund housing projects, does he think it is good value for taxpayer money for his department to spend $10 million on preparing a business case for the replacement of an information technology system that Housing New Zealand Corporation’s own reports say does not need to be replaced?
Hon MAURICE WILLIAMSON Link to this
When we are developing information technology projects, best practice determines that we do a very detailed business case before the final decision to spend is made. Developing such a detailed business case requires the expenditure of money, and to date I am convinced that the spending by Housing New Zealand Corporation on the development of that business case has been within what the Government considers to be value for money.