By Ben Sheehan, Country Manager New Zealand, TechnologyOne
New Zealand councils are collectively responsible for around $217 billion worth of assets – a huge increase of 75% since 2018.
Yet, as the cost of managing and maintaining these assets – as well as their associated services – continues to climb, councils are being challenged to keep a lid on rates, leaving little room to manoeuvre.
Councils are doing everything they can to absorb pressures in the short term, but many are reaching a tipping point. And, as councils increasingly take on more responsibility beyond the three Rs – rates, roads, and rubbish – achieving long-term financial sustainability demands not just new thinking – but new ways of operating.
Real-world AI application
Many council leaders are energised by the potential of Artificial Intelligence (AI) to drive change, with 8-in-10 Government organisations across New Zealand already actively using AI in 2025.
We’ve been embedding AI for the past six years and, in my experience, AI has been overhyped for the past three years, so I’m relieved to see the conversation now shifting to value.
By embedding AI within ‘business-as-usual’ operations, councils can drive significant productivity and efficiency, leading a path to financial resilience.
With admin often one of the largest expenses for councils, AI use cases that streamline, speed-up and automate back-office processes will continue to gain significant traction in 2026.
Every hour saved on admin-heavy tasks redirects valuable resources to high-impact community-facing services, helping LGAs do more with less in the areas they need it most.
Councils already scaling their AI-driven operations will be the ones to watch over the next 12 months. Proactive step-change Councils continue to tackle the repercussions of decades-long ineffective asset management this year, but new strides in technology are enabling councils to shift from a position of reactivity to proactivity.
From road defects and fire warnings to swimming pool surveillance and parking enforcements, AI is being weaved into every facet of council operations.
For example, over 30 councils and state road authorities across ANZ have implemented AI and Machine Learning (ML) from Retina Visions to automate the defect inspection process. This innovation means councils no longer need to deploy additional staff or contractors for inspections, enabling them to fix issues before they become costly problems or risks to public safety.
Over the coming months, we expect to see these capabilities expand, giving councils the tools to detect issues even sooner, ultimately maximising an asset’s performance, while minimising the financial burden.
This intelligent approach solves a genuine time-consuming and costly problem for councils, but most importantly it delivers on its promise by putting AI to work with people, not instead of them.
Preserving the human touch
As digital expectations rise, councils need to act more like service-led businesses. Three quarters of people now expect government services to match the quality and responsiveness of the private sector, according to PwC.
But, just like the private sector, they are also expected to retain the ‘human touch’. In fact, almost half of Kiwis want more human-facing support when using government services.
As councils roll-out more digital and self-service capabilities this year, preserving the human touch will become more important than ever.
Bridging the accessibility gap
Over the next five years, digital transformation will empower every council – even the most risk-averse. But one of the most pressing issues right now is accessibility to existing digital services.
Our research shows only 50% of Kiwis use online local government services and research suggest the problem is not with the technology, but with the designers of the services not “sitting in the shoes” of users, especially those who lack the ability or confidence to use them.
We identified reoccurring pain points, including complex language, hard to find information, and time- consuming processes, that are ultimately driving increased reliance on traditional customer service channels, placing additional pressure on a resource-constrained industry.
With the right technology and a commitment to empathetic service design, councils across New Zealand can bridge the accessibility gap, unlocking the full potential of their digital investments.
Councils at the cross-section of innovation and empathy
From admin efficiencies to public safety and asset performance, a new wave of artificial intelligence-driven investment is taking place across the local government sector that could deliver a very different future to the past decade.
AI brings the innovation, but humans bring the empathy. Councils that place themselves at the cross-section of both in 2026 will be the ones to successfully optimise operations and sustainably reshape their service delivery.
