New Zealand Communications Minister Amy Adams announced proposed changes to how the government works with telecommunications companies on Wednesday, saying updated legislation would ensure that companies have "a clearer understanding" of how to meet their interception obligations, while ensuring that network infrastructure remains secure.
It will ensure that networks cannot illegally copy or divert data, are safe from unauthorised access, and do not allow others to carry out espionage or disrupt services.
Key said an informal agreement exists at present between the telcos and the government to provide network security.
"We're changing the basis of the agreement. At the moment it is voluntary, and so it's possible for a telco not to cooperate," he told reporters.
"We want to get to a point where the government has more teeth ... it's important for reasons of national security."
The telcos currently work with the Government Communications Security Bureau (GCSB), which is itself going through substantial changes.
Key said changes to telecommunications laws are part of an integrated package.
"It allows the GCSB to work with those companies, but if the state genuinely believes there are network security issues, it will have the capacity to influence decisions."
The law changes come after Telecom announced earlier this month that it was dumping France-based multinational Alcatel-Lucent in favour of Chinese telecom giant Huawei to build its 4G infrastructure.
The government said it is confident in dealing with Huawei in New Zealand's Ultra-Fast Broadband (UFB) rollout, despite a United States House Intelligence Committee saying the company poses a major security threat, and the Australian government blocking it from tendering for contracts related to its National Broadband Network (NBN) rollout.
Network operators are already required to have specialised interception equipment available.
Laws already allow the GCSB, Security Intelligence Service, and police to intercept phone calls, emails, text messages, and other data as they investigate crimes such as homicide and drug trafficking, and also to deal with armed offender situations or kidnappings, combat national security threats, and prosecute cybercrime.
Adams said the changes would not increase the authority of government agencies to access business and personal data, but relate only to obligations on telecommunications companies.