Cabinet has decided on moves to improve the effectiveness and governance of the New Zealand intelligence system, says Prime Minister John Key.

"The decision to take these steps follows my commissioning a review of the intelligence agencies, which was carried out by former Secretary of Foreign Affairs & Trade, Simon Murdoch," says Mr Key, who is Minister in Charge of the NZSIS and Minister Responsible for the GCSB.

"The Murdoch review found no performance failure at agency or system level, but it did propose to make some adjustments to improve performance and governance.

"The central agencies - Department of Prime Minister and Cabinet (DPMC), Treasury and State Services Commission - will now have greater oversight of the intelligence agencies covering performance, the setting of priorities and resource allocation.

"However, as happens now, the central agencies will not have any role in relation to the actual operations of the intelligence agencies.  The intelligence agencies will remain under the oversight of the Inspector-General of Intelligence & Security and the Commissioner of Security Warrants.

"The second major step is the director of DPMC's National Assessments Bureau (renamed from the External Assessments Bureau) will be responsible for a national assessments programme that includes domestic and external intelligence sources.

"The director will also establish quality standards across the intelligence agencies for the assessment and analysis of intelligence.

"The New Zealand intelligence community has expanded in scope and functions over the past decade as a result of changes in the security environment.

"These changes are designed to ensure the agencies keep pace with changes in the security environment, so we can better meet the security challenges we face."