The $103 million taxpayer funding of New Zealand's intelligence agencies is effectively a membership fee for joining the Five Eyes surveillance club with the United States, United Kingdom, Australia and Canada, according to a de-classified report.

The report says the money pays for our spies to do a few "niche" tasks well and to use our international partners to do the rest.

The "Murdoch Report" was written by former diplomat and senior public servant Simon Murdoch in 2009 for the State Services Commissioner and classified secret because of the details contained about New Zealand's spy agencies.

It was a review of the framework in which the agencies operated, carried out at a time when New Zealand's intelligence-sharing relationship with the United States was undergoing massive change.


It was released to the Herald under the Official Information Act, requiring it to be declassified from "secret" to be made public.

Mr Murdoch charted the growth in funding for New Zealand's intelligence community, which includes "human intelligence" specialists at the NZSIS and the electronic eavesdroppers at the GCSB, finding it had doubled in staff numbers and more than tripled in cost to $103m since the September 11 2001 terror attacks in the US.

Mr Murdoch wrote the money should be seen "in the context of the annual 'subscription' paid by New Zealand to belong to the 5-Eyes community whose annual capital investment and operating outlays would dwarf ours".

"It helps explain why the niche contributions that we can make to 5-Eyes burden sharing are so important and why agency heads strive to be responsive to partner demand."

The theme of working hard for the Five Eyes partners is echoed in a number of places in the report.

In describing the "way ahead", he said the intelligence community needed to "manage the expectations of NZIC's key offshore partners from the centre more actively".

He said NZ needed to show itself as a "niche contributor with capacity constraints but some high quality competencies".

The intelligence agencies have always been vague on what contribution New Zealand makes to the 5-Eyes partnership.


Speculation ranges from having good positioning on the planet for some satellite intercepts to our benign nation status being used as a staging point for electronic spying on countries less friendly to the UK or US.

Mr Murdoch listed a range of security threats faced by New Zealand, including cyber threats to IT infrastructure, "imported or homegrown Islamic militancy" and working to contain the spread of the weapons of mass destruction.

Threats also included "transboundary criminality, civilisational friction, resource rivalry and energy brinkmanship".

Mr Murdoch suggested a restructuring of the intelligence community which has only partly taken place, describing it was a collection of agencies which had grown without planning over the years.

He also illustrated the lack of constant, formal links between the heads of agencies, describing a monthly "working lunch" between spy bosses of the GCSB, NZSIS, DDIS, and the lesser known External Assessments Bureau (now National Assessments Bureau) and the Domestic and External Security Group.

The purpose of the lunches was to "share issues and perspectives", but they stopped in late 2008 because its members became too busy.


Large sections of the document are blanked out, particularly the areas which appear to discuss relationships with Five Eyes' partners.

The redactions also pose a puzzle - the glossary has removed acronyms for two organisations listed alphabetically between the NZIC (NZ Intelligence Community) and NZSIS (NZ Security Intelligence Service).

The GCSB went from about $20m a year to $50m, the NZSIS from about $10m to $35m and the little-known Directorate of Defence Intelligence and Security from $2.4m to $11.3m.

Mr Murdoch has held some of the most sensitive roles in New Zealand.