Why New Zealand Visa Costs Could Climb Again — and Why It Isn't Your Fault

News · 2026-09-04 · 6 min read

Kabayan, if you are hoping to work in New Zealand, or you already have an employer there sponsoring your visa, this story deserves a few minutes of your time. Immigration New Zealand (INZ) is dealing with a $90 million shortfall in its visa accounts this year. A fresh look at fees is scheduled before the end of 2026, which comes barely two years after the previous review. For the workers who apply for visas and the businesses that hire them, this is not just government paperwork happening far away. It is an early glimpse of what you and your employer may be asked to pay next.

Where the $90 Million Gap Came From

Two things dug this hole. One is Our Future Services, a $336 million programme to automate how INZ works, and it is still young. The other is what was left behind by the Biometric Capability Update (BCU). That system was supposed to bring the way INZ handles biometric information up to date. It ran for seven years, starting in 2018 and finishing in late 2025, and then it was cancelled without giving anyone something that could actually be used.

A Cancelled System That Still Sends Bills

On paper, the 2026 Budget set aside a $31.2 million write-off for the BCU. That number did not stay put for long. In July 2026, Nic Blakeley, chief executive of MBIE, disclosed a further $6 million in project costs that had never been reported before, and he admitted he could not be sure this was everything. By early September 2026, the NZ Herald was reporting known losses of close to $40 million, and MBIE still could not say the counting was finished.

More costs may still land on the table. INZ might have to pay the BCU contractor, NEC, as much as $12 million. NEC also says it lost at least $4 million, and there could be penalty charges of up to $750,000 per month connected to a 2025 delivery deadline that was missed. While the Michael Heron KC inquiry continues, ministers have said very little about the details.

What the Investigations Uncovered

Greg James led an independent review that did not hold back. It found that the project began in 2018 without proper analysis, that no due diligence was done when it was rescoped in 2020, that governance was set up too late to make any difference, and that problems were allowed to grow outside the usual reporting lines. A separate investigation by 1News raised another question: whether MBIE arranged the costs so they stayed below the $35 million threshold that would have sent the project to Cabinet for a decision.

The difference between what was said inside and what was really going on is hard to ignore. On March 19, 2024, a project update called the programme “sound and robust” and on track. Only nine days afterwards, an independent quality assurance check found it probably could not be delivered at all. In July 2026, Blakeley finally told the Privileges Committee, “We got it wrong.” Finance Minister Chris Bishop was just as plain, describing the whole thing as “a disaster.”

The Replacement Programme Is Already Struggling

Our Future Services is the eight-year programme meant to take the place of the failed system. It is only about a year and a half old, yet cracks are already showing. A review by Stanford found that the original business case promised more savings than it could realistically deliver. Those savings depended on cutting 118 full-time roles and lowering overhead in IT, property and corporate services, but most of those overhead costs do not go down just because staff numbers go down. The 30% productivity gain that was promised has not arrived either, since student visa processing is sitting only between 7% and 20% above baseline. Treasury now rates the whole programme as “high risk.”

Why This Touches Migrant Workers and Employers

This is where an accounting problem turns into a hiring cost. Since the 2024 overhaul of fees and levies, INZ has been paid for mostly by the people who use it. According to Turner Hopkins Immigration's August 2026 analysis, in 2024/25 about 50% of its revenue came from fees, 40% from levies, and only 9% from general taxation. Put simply, roughly 91 cents of each dollar INZ spends comes straight from migrants and the employers who sponsor them. The firm's view was easy to follow: when users pay for nearly the whole system, they deserve to see it managed responsibly.

Applicants already felt that change in 2024. Skilled residence visa fees went up from $4,290 to $6,450, and student visa fees doubled to $750. A Cabinet paper prepared by INZ that same year projected ICT spending rising from $13.3 million in 2024/25 to $58.2 million by 2027/28. That is four times as much, driven largely by the old legacy systems that the BCU was meant to replace and never did.

So, Who Ends Up Covering the Cost?

Making users pay was a deliberate policy decision, and the 2024 increases were presented as putting an end to a taxpayer subsidy for the immigration system. That stance can be defended on its own. The deficit coming back now, however, is not the result of policy. It comes from a failed project, an overly hopeful business case, and contractor liabilities that remain unresolved. MBIE has admitted that getting the visa account back into surplus will take both spending cuts and “revenue recovery measures.” In everyday language, that points to fees going up again, paid by employers and migrants who had no part in the BCU's failure.

A Friendly Word Before You Apply

None of this changes what you need to do today, but it is a good reason to plan ahead with care. Whether you are applying from the Philippines, from a job in the Middle East, or from anywhere else, check the current fees on the official INZ website before you lodge anything, leave some room in your budget, and talk openly with your employer about who covers which costs. Being prepared is always the best way to protect the savings you have worked so hard for.

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