The public should be more worried about companies like Google or Facebook than anything New Zealand's spy agencies are doing, Prime Minister John Key says.
He was responding to calls for the agencies to have a warrant when accessing sensitive personal information, from the likes of Inland Revenue, banks or doctors.
MPs have been considering new legislation for the Government Communication Security Bureau (GCSB) and the Security Intelligence Service (SIS) that would set up a common warranting and compliance regime.
It would also explicitly allow both agencies to carry out surveillance on New Zealanders, or intercept their private communications, under certain circumstances.
Under information-sharing provisions in the bill, agencies could seek personal information from companies such as Spark.
That would be subject to Privacy Act principles, but would not require a warrant.
Appearing before Parliament's Foreign Affairs and Defence Committee, Spark regulatory affairs manager John Wesley-Smith said the company held a large amount of personal information.
He said the bill put too much onus on Spark to decide what information should be released, and whether it was necessary to protect national security.
"It asks us first to decide for ourselves whether the information is in fact necessary for the agency to carry out those functions. We have no way of assessing that."
"By their very nature, intelligence agencies can't give us the information we would need to make that decision," Mr Wesley-Smith said.
In its written submission, Spark said it should be a warranted activity.
"The question of whether, and if so when, intelligence and security agencies should be able to access personal information other than by warrant, is a grey area today and is an area of real concern for Spark.
"In its current form, the bill asks private sector organisations such as Spark to decide whether and when to provide personal information to intelligence and security agencies without a warrant.
"That is not acceptable to us, and we do not believe it will be acceptable to New Zealanders.
"Spark's view is that any legislation which is intended to grant government agencies the power to access New Zealander's personal information as an exception to normal privacy laws should provide clear, unambiguous, direction as to the extent of these powers, and allow independent oversight and scrutiny of agencies' adherence to that direction."
Warrants should be required for medical information - Privacy Commissioner
Privacy Commissioner John Edwards said where New Zealanders would have a strong expectation of privacy, for the likes of medical or financial information, agencies should have to have a warrant if they want to access it.
"Although this approach would make compliance with the request compulsory on the part of the agency holding the information sought, rather than voluntary, in my view, the protections of a warrant process provide greater assurance to the public than a negotiated process of request and release without explicit oversight."
Furthermore, he told MPs all of the agencies' activities should be covered by the legislation, as national security should not be used, unreasonably, to invade a person's privacy.
"Because of the operations of a particular target, it may be necessary to seek to put in interception device in a particularly intimate area, a toilet or a bedroom. The experience of the individual under surveillance will be that that is unfair and that is unreasonably intrusive," Mr Edwards said.
Mr Key said if people were really concerned about privacy, it was not the spy agencies they should be worried about.
"The truth in reality is that Facebook and Google and a whole bunch of other multinational websites and companies understand a lot more about your activities, quite frankly, than the spy agencies do."
Mr Key said spy agencies have to operate, for the most part, in a warranted environment.
"It's for a very small and discreet number of people, hardly anyone, to get on their radar. There really has to be something really big going down."
The committee is due to report back to Parliament with any recommendations for changes to the bill in February next year.