Retired GCSB director says links with US important to the security of a small country with limited defence spending in high-tech times.

A former spy boss says New Zealand is a democratic and free country because of our relationship with the United States and other large powers.

Former GCSB boss Air Marshal Sir Bruce Ferguson said the sacrifice made to enjoy the relationship was small - even though New Zealand was extremely unlikely to suffer a terrorist incident like the September 11, 2001 attacks.

"We are a democratic, free country because of others, not because of us. That's the way it is when you're a small country."

The comments came in an interview amid an international outcry over privacy following revelations involving the United States' National Security Agency, a partner intelligence agency to New Zealand's Government Communications Security Bureau.


An NSA whistleblower revealed the existence of Prism, a system he claimed allowed the United States access to the personal information of billions of people. The claims included the alleged use of Prism since 2010 by the United Kingdom's GCHQ, another partner with the NSA and GCSB in the five-country Five Eyes intelligence network.

Sir Bruce, who retired as GCSB director in 2010, said he was unaware of New Zealand having access to such a system but endorsed efforts to advance technology. He said the opponents faced by the GCSB - and partner agencies - were also taking advantage of developing technology.

"The other side is a very generic grouping of straight-out jihadists and terrorists through to nation states who may have some evil or incorrect intent against New Zealand or towards our allies. It is not one-sided. If you don't move at the best of your abilities within the law you're going to be found out and you're going to have another 9/11."

He said there was a certain amount of naivete in the New Zealand public about the dangers faced. "Don't look at the cataclysmic 9/11 things - they are extremely unlikely to happen here. It could be nothing more complex than some foreign power or foreign organisation with the flick of a switch turning off Wellington's sewerage system, or if there is a bit of a problem with a trade agreement, suddenly we find power goes off in certain cities. It's not necessarily going to kill anybody but would certainly damage our economy.

"I would think it does matter if the hospitals all lost their power for 24 hours [and] those on life support systems start dying, or you'd have to evacuate Wellington within 36 hours if the sewerage system failed.

"Take out the air traffic control system by just downgrading their computers and we suddenly can't fly anywhere. It affects our way of life."

Sir Bruce, who went to the GCSB from running the NZ Defence Force, said our relationship with foreign powers was one aspect allowing New Zealand to have one of the lowest levels of spending on the military in the world. He said the question was whether the trade-offs required in having intelligence organisations like the GCSB were worth preventing those situations.

"At the moment, our sacrifices are not great with respect to what we have to give up to try and at least keep abreast of these things. We spend a minimal amount on the safeguards and rely to a large amount on the largesse of our allies and long may it continue. Because we are, as one American congressman once described us, 'a pissant country southwest of Nowheresville', we have to rely on the goodwill and largesse as we have done since 1941."


Sir Bruce said the Five Eyes network was a useful relationship but did not allow friendly countries access to each other's secrets - contrary to comments made last year by NSA whistleblower William Binney, who set up the forerunner Echelon.

He said the US had a different approach and the attacks on the Twin Towers "totally changed the way America looked at intelligence gathering". The attacks led to the creation of the Patriot Act as technology advanced.

"It allowed them to get into far, far more and greater areas than they had ever got into before."

But Sir Bruce said information sharing was governed by "protocols". "No country wants any other country intentionally or unintentionally looking on their own citizens."

He said it made sense to share information "likely to end up in a terrorism incident" in a friendly country.

"You don't want to know all about 9/11 before it happens but then after say 'I told you so' or 'I knew about that but didn't think I should tell you'. That would make your friendship last about five seconds."


He said GCSB staff worked hard to make sure it was done legally and properly. "I was comfortable when I was working in that area that there was no ill or evil intent - that everyone was working to the best efforts of the country and the individuals in this country ...

"The people working at GCSB believe just as fiercely in the freedoms that we believe in."

Metadata featured in GCSB spying

Metadata was a feature in about 30 cases of potentially illegal spying discovered in the inquiry into the GCSB.

Green Party co-leader Russel Norman said it raised the possibility the information had come through to the GCSB from the offshore Prism system, run by the United States' National Security Agency.

The bureau had operated for a decade on the basis metadata - information about information - was not a communication so there was no barrier to collecting it. The confusion was one reason the law was being changed to make it clear metadata was a communication requiring a warrant to collect.