The Law Commission wants new powers for the Privacy Commissioner as one of a range of improvements to the Privacy Act.
The commission on Tuesday afternoon made public the final part of its wide-ranging review of privacy laws.
Chief among the 136 recommendations is giving more powers to the Privacy Commissioner to issue compliance notices or demand information-handling audits.
Law Commissioner John Burrows, QC, says the Privacy Act is sometimes misinterpreted by agencies and even used as a smokescreen when they do not want to release information.
The report also advocates shutting down a loophole in the law that allows people to post offensive material online.
Meanwhile, Privacy Commissioner Marie Shroff is to prioritise cases of jilted lovers who use the internet post compromising photos of former partners.
Ms Shroff identified this as one of three problem areas needing urgent attention in response to the review of privacy laws.
The commissioner says it is wrong for people to claim that because somebody is their ex-partner, compromising pictures of them can be put online. She plans to address the problem urgently.
"If you post offensive material online, there will be consequences. You can't claim that just because the girl happened to be my ex-partner, I can put up photos of her in the shower online. I think in today's environment that kind of sanction is going to be important."
The Law Commission report also advocates that the Privacy Commissioner should be allowed to make binding decisions on complaints about people's right to access their personal information.
Other recommended changes include a requirement for agencies to tell people if their personal information is lost or hacked into in a serious way.