"He knows the value of what is actually happening in terms of GCSB. He is quite well aware of the fact that both the previous Labour Government and this Government, that GCSB was providing support to those agencies. That has now stopped."
The legislation legalises the way in which the GCSB has for many years been helping the domestic spy agency the SIS and the police to spy on New Zealanders. That help has been suspended in the meantime.
Mr Key said passing the law was in New Zealanders' interests. "At the end of the day, this isn't play-time," he told reporters at Parliament.
"What actually happens with national security is protecting the interests of New Zealanders, and if people aren't doing something wrong, then it's very unlikely they would be falling within the remit of the GCSB's activities."
Mr Key also said the proposal of New Zealand First leader Winston Peters' in getting interception warrants signed off by a panel was quite possible.
But he did not think there was any chance of Labour voting for the bill.
"You've got to understand that David Shearer isn't running the ship over there - Grant Robertson is."
He said Mr Robertson was playing "schoolyard politics".
"He doesn't have a clue about national security and he doesn't really care about it. He is caring about point scoring. If David Shearer was serious about becoming the next Prime Minister of New Zealand he would vote for this legislation but he is demonstrating through his actions that he is not in control of his deputy."
Mr Shearer said Mr Key was trying to shift attention away from the fact that he could not get enough support to pass the bill.
Labour wants a full and independent inquiry into all of New Zealand's intelligence agencies before considering any legislation.
He said it would not need to be a long inquiry - three or four months.
He did not accept Mr Key's view that New Zealand was more vulnerable now because of the suspension of help the GCSB was giving to the SIS and police.
"Let's face it, he has bungled this right from day one whether it be Dotcom and the illegal spying, the appointment of Ian Fletcher [GCSB director]. All this around John Key's neck and now he wants to push through a piece of legislation and say 'it's all okay'. Well it's not."
Mr Shearer believed work done on a potential merger of the foreign intelligence agency (GCSB) and the domestic intelligence agency (SIS), which was a worrying direction and the current bill made that possibility easier.
"It needs a broader look at it, not a narrower one."
Mr Key confirmed that when he first became the Minister in charge of the GCSB, he looked at merging the SIS and GCSB as had happened in some other countries.
"I just don't think we need to do that because we are merging a lot of their support services."
They were both in the same building in Pipitea St, they had merged human resources services.
"I think that is probably a better way of going than merging the two organisations in totality."
