Te Whatu Ora payment system currently working at 4% capacity

A $140m Health Sector Agreements and Payments programme that aims to replace outdated systems that manage $13 billion of payments and 130 million claims a year is only working at around four percent capacity.

A review in March found there were big problems that appeared unresolvable.

The project was still the best way forward, but needed a new business case to reflect when and how it would be delivered, it said.

In the paper, Treasury said too many projects across agencies were being poorly planned, and their business cases were not up to scratch, or had not been done by the time Cabinet was being asked to decide about them. It had begun a programme to try and bring standards up.

Strained budgets across government were having an impact, it said in March: "Reviews are being rescheduled or cancelled as a response to fiscal or budget constraints. Ongoing fiscal uncertainty is requiring timelines and investment activities to be rescheduled."

Te Whatu Ora has since revised its implementation.

But it said the new system will eventually meet its original objectives.

It has already gone live, and was running at an annual rate of $435m in payments covering 400,000 claims - 30 times less than it needs to handle.

"We anticipate that one third of all agreements are expected to have been migrated to the new system by March next year," the agency told RNZ.

The project, begun in 2021, has a 10-year timeframe.

Since the March review, governance, oversight and management had all been improved, lead programme manager Mark Woodard said - "all of which has resulted in the programme achieving key milestones".

"We recognise, however, that this programme is complex and further challenges are likely as the health sector evolves and implementation continues."