Sir Michael Cullen has never been one to mince words so when he was asked why he and Dame Patsy Reddy had not simply recommended a merger of the two intelligence agencies, he was blunt: it was because the Government had not allowed it under the terms of reference.

That didn't stop him recommending what amounts to a merger in all but name, which will see the GCSB and SIS remain technically separate entities but controlled by the same legislation with very similar powers - it was, as Dr Cullen said "a civil union".

The most controversial aspect of it is likely to be the recommendation to allow the GCSB to spy on New Zealanders without requiring a warrant to do so on the behalf of other parties. It breaks a longstanding split between the SIS and GCSB under which the GCSB could only spy on foreigners and the SIS on New Zealanders.

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It is that which will Labour has asked questions about to assess whether it means the GCSB will have any powers that other agencies do not already have.

The examples Dr Cullen gave of the virtue of extending that to the GCSB were rather sympathetic to his own case - he spoke of a New Zealander lost at sea and said the GCSB would not be able to use its cellphone tracking technology to find that person because they were a New Zealander.

In reality the split of powers had become increasingly redundant anyway. The review team also proposed a strong authorisation process to ensure there was not indiscriminate spying. In reality that split of powers had become increasingly redundant.

Sir Michael pointed out the SIS had the power to spy domestically but the GCSB had the technology to do so. In terms of the difference in the technology between the two, he said "it's really a question of can you use Snicko and Hawkeye or can't you in order to establish whether there was a no ball?"

Dr Cullen argued it was not a vast expansion of powers, but rather an attempt to clear up the current conflict for the GCSB. The legislation covering the GCSB already allows it to spy on behalf of other agencies with a warrant. One of Dr Cullen's more surprising admissions was that despite the attempt to change the GCSB's legislation to specify when it could spy on New Zealanders, the GCSB had only become more hesitant to do so. That happened after it was found to have unlawfully spied on more than 100 people due to confusion over its powers when acting on behalf of other agencies.

Dr Cullen said the GCSB and it had become overly cautious in the wake of that controversy to an extent it was impacting on its work. That had, he argued, almost put the Government in a position of failing in its duty to protect the lives of New Zealanders.

The other recommendation Labour's Andrew Little is concerned about is increased data sharing between agencies such as the Immigration and Customs. Labour's concern is that details of perfectly innocent travellers would get caught in that information.

Another recommendation likely to be welcomed by those suspicious of intelligence agencies and the Five Eyes relationship in particular are more controls over sharing intelligence with other countries. That is in part to ensure those agencies do not circumvent restrictions on spying on New Zealanders by instead getting foreign partners to do so. It proposes requiring authorisation for New Zealand to access intelligence from other countries, including its Five Eyes partners, and for a new protocol to set out when and why New Zealand will give its own intelligence away.

Dr Cullen also went to some pains to try to dampen down paranoia about the intelligence agencies after the raft of controversies, both domestically and internationally in recent years. He said the traditional view of the agencies was a bit "John le Carre novel" but their main bread and butter was collecting intelligence that the Government needed for foreign policy and to be able to protect New Zealand.