Prime Minister John Key defended the function of the Government Communications Security Bureau today saying cyber attacks relating to weapons of mass destruction were intercepted by the agency.
"There has been a disturbing escalation of cyber activities beyond simply exfiltrating data to actually altering data and systems - there have been covert attempts to acquire New Zealand science and technology for programmes relating to weapons of mass destruction or weapons delivery systems,'' Mr Key said.
While defending the agency's functions, Mr Key announced sweeping changes to GCSB's powers, saying failure to do so would leave New Zealand's national security open to threat.
"As Prime Minister I am simply not willing to do that. To do nothing would be an easy course of action politically, but it would be an irresponsible one.''
Mr Key said GCSB had stopped providing assistance to the New Zealand Security Intelligence Service (NZSIS) and the police in the interim.
Last week the Government hurriedly released Cabinet Secretary Rebecca Kitteridge's compliance review of the GCSB after it was leaked to Fairfax.
The report revealed that more than 80 people had been illegally spied on, in addition to revelations last year that the GCSB had illegally spied on German internet tycoon Kim Dotcom.
A 2003 law change explicitly prohibited spying on New Zealanders.
Mr Key said the GCSB had worked with other agencies under the rules of that agency - which it believed the law allowed it to do.
Mr Key said it was the "responsible thing to do to clarify the legislation''.
He wanted to make it clear the GCSB can provide support to agencies which are undertaking their lawful duties.
The GCSB will retain its three main functions:
- Information assurance and cyber security
- Foreign intelligence
- Cooperation assistance to other agencies.
Changes would see these functions clarified so information assurance and cyber safety will include cooperation, allowing it to assist other entities such at the NZSIS, New Zealand Defence Force and police.
Mr Key believed the changes to the 10-year-old agency were about striking a balance between providing necessary intelligence activities and the rights of New Zealanders to privacy.
He said Ms Kitteridge's report showed the GCSB Act was not fit for purpose and there difficulties in interpreting the Act.
Significant changes would be made to section 14 of the Act which prohibits the GCSB from intercepting the communications of New Zealand citizens or permanent residents.
There would also be enhanced oversight arrangements, including a wider pool of candidates able to perform the role of inspector general of security and intelligence, meaning they do not have to be a retired high court judge.
The inspector general's office would be more proactive, rather than review-focused. The office would be able to launch its own inquiries, and extra staff and resources would be included.
The inspector general's work programme would be expanded.
Mr Key announced an inquiry into how Ms Kitteridge's report was leaked and a potential increase in security.
The terms of reference for the inquiry include determining how the information was released early, and by whom.
The investigation could include interviews and a review of all communications, copying equipment, records, log books and other materials of all people who had access to the report.
Andrew Kibblewhite, the chief executive of the Department of the Prime Minister and Cabinet, and GCSB director Ian Fletcher appointed David Henry to carry out the inquiry.
Mr Henry is a former senior public servant whose roles have included Commissioner of Inland Revenue, Chief Electoral Officer, Electoral Commissioner and Commissioner on the Pike River Royal Commission.
He will present his findings at the end of May.