Artificial intelligence isn’t coming to the New Zealand public sector – it’s already here.

AI is shaping everything from your tax bill to how quickly police process crime reports. And right now, it’s happening in a way that’s fast, fragmented and largely hidden from public view.

On the latest episode of The Business of Tech, I talk to BusinessDesk journalist Cécile Meier about her multi‑part investigation into the use of AI across government – an investigation built on a trove of Official Information Act responses from major agencies. What she found is both encouraging and unsettling.

Real efficiency gains and cost savings

There are genuine wins. Police have slashed processing times for lower‑severity crime cases from eight to ten minutes per file to as little as one to three minutes using an AI‑powered workflow tool – a saving estimated at 18,000 hours and around $1 million a year. Inland Revenue is using AI in its debt collection models, helping secure tens of millions of dollars in payment arrangements in just weeks. ACC and others report large productivity gains from Microsoft’s Copilot baked into everyday tools.

But scratch the surface, as Meier has, and the story gets a lot more complicated. There is a public‑service‑wide AI framework governing how these tools should be deployed, but it is not binding. Agencies have guidlines for adoption but are largely left to design their own pilots, measure their own “time saved”, and often rely on the very vendors selling them AI to prove the return on investment. Quality, error rates and real‑world impacts on citizens barely get a look‑in.

The AI deployment divide

Her reporting also exposes a stark divide. Some agencies – IRD, ACC, Police and DOC – are forging ahead, training thousands of staff and embedding AI deep into decision‑support systems. Others, like Oranga Tamariki and Corrections, are so wary of the risks that they’ve blocked external AI tools and confined usage to tightly constrained, low‑stakes tasks. All of this is happening under the same loose, non‑binding guidance.

AI tools are stumbling over te reo Māori and Māori legal concepts, raising obvious concerns about bias and fairness. There's growing reliance on a handful of US tech giants to supply and measure government AI, and a rising wave of “shadow AI”, as public servants quietly use banned tools on personal devices because they’re simply too useful to ignore.

Listen to The Business of Tech for the full interview, and hear how AI is quietly rewiring the state, often without the scrutiny it deserves. Streaming on iHeartRadio, Spotify, Apple, or wherever you get your podcasts.

Show notes

'Slippery slope': Concerns millions spent on AI may not be delivering for public - BusinessDesk

Light rules, high stakes: Agencies push AI into frontline work - BusinessDesk

Government AI spending hits $20.2m with real cost likely far higher - BusinessDesk

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How does an iconic Kiwi brand recover from store closures, falling earnings, and the deaths of its founder and CEO? Jonathan Waecker, new CEO of Michael Hill, talks about stepping in to honour the jeweller’s legacy while creating urgent change.

Jonathan talks through the high-stakes call to drop newer sub-brands, moving to a fully private-label model, and cornering the “mass premium” market. Learn how Canada has become the company's primary growth engine, with 85% of sales now outside NZ, and whether customers still want affordable luxury during an economic downturn.

How is a jeweller impacted by the rising prices of gold and silver? What’s the role of the velvet-rope retail store in an era where you can Doordash a diamond ring? What’s got institutional investors like the ACC doubling their stake?

Plus, the story of how Michael Hill was born out of a house fire in 1977.

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After a tough day at the office yesterday, the Prime Minister is all fired up over the media, Winston and the Indian FTA.

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The revamped Golden Visa is providing a major boost to the economy.

The Active Investor Plus visa's brought in $1.5 billion, with another $2.4 billion in the pipeline.

More than 600 applications have been lodged since last April, from nearly 2,000 people.

Immigration Minister Erica Stanford told Mike Hosking she's thrilled with those numbers.

She says the impact for individual businesses is huge, both in capital and skills from these people.

Stanford is also condemning New Zealand First’s remarks on the India Free Trade Agreement as racist and divisive.

Shane Jones warned of a “butter chicken tsunami” of Indian migrants coming to New Zealand.

The Immigration Minister told Hosking New Zealand First is selective in its rhetoric on immigration, noting its silence on the visa despite recognising its economic value.

She says the comments were distasteful and designed to bring out the worst.

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Labour is still mulling whether to back the India free-trade agreement, despite it being set to be signed on Monday.

Speaking to the Herald after Labour’s caucus met on Tuesday, leader Chris Hipkins couldn’t say how close the party was to finalising its position on the agreement, but said it was continuing to talk to the Government “in good faith”.

NZ Herald Wellington business editor Jenee Tibshraeny explains further.

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The Reserve Bank may have to hike the OCR sooner than expected, with inflation tracking higher than forecast.

Inflation remains at 3.1% – unchanged on three months ago.

ASB economists say the central bank could be facing a "nightmare scenario" of soaring inflation, against the backdrop of a fragile economy.

Chief Economist Nick Tuffley told Ryan Bridge it’s increasingly likely the Reserve Bank will start lifting the OCR around July.

He says they believe it will wind up around 3.25% – a more neutral level for the rate.

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Imagine having a financial adviser in your pocket. With AI innovations transforming what finance apps are capable of, that reality might not be too far away.

Instead of just tracking your spending, saving and investments, advances internationally are increasingly seeing the apps able to do everything from scanning the market for better deals or returns, to making recommendations and then executing them on your behalf.

Josh Daniell, the co-founder of Akahu – which connects bank accounts to third-party tools like tracking apps – joins Nadine to talk through the rapidly evolving world of finance apps.

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Inflation was higher than it should be, even before factoring in the full impact of the war on Iran.

Stats NZ data shows the inflation rate remained unchanged at 3.1% in the March quarter.

Internationally driven tradeable inflation dipped to 2.5% and the domestically driven non-tradeable rate was unchanged at 3.5%.

The Herald's Liam Dann told Kerre Woodham these figures come before fuel rises really kicked off.

He says it's disappointing we aren't heading into that crisis in a better position.

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