In yesterday's Cabinet reshuffle, Attorney-General Chris Finlayson took on the roles of minister in charge of the Security Intelligence Service and the Government Communications Security Bureau, while Mr Key retains ultimate responsibility for the security and intelligence sector under a model similar to that in Australia and in Britain.
The move was driven by the growing significance of intelligence and security "both in terms of cyber security" and because "the world has become a more uncertain place", Mr Key said.
Former Labour leader Helen Clark might have been right last decade when she said New Zealand faced a relatively "benign environment" in terms of security and intelligence, "but I don't think that's correct today".
"The reality is that some of these risks - and we're seeing them play out in places like Australia - could easily present themselves in New Zealand and we just need to be cognisant of that."
Australia had been cracking down on so-called foreign fighters - Australians and in some cases New Zealanders who sought to fight in places like Syria and Iraq and then wished to return.
Mr Key said that was an emerging issue for New Zealand.
"If I was to spell out to New Zealanders the exact number of people looking to leave and be foreign fighters, it would be larger, I think, than New Zealanders would expect that number to be."
Mr Key said he intended giving a speech in three or four weeks when he hoped to spell out those risks and where legislation was deficient in dealing with them.
Officials were preparing advice on current law including what Mr Key believed were "glaring deficiencies", particularly around the cancellation of foreign fighters' passports.
That could result in "some short-term adjustments to the legislation to reflect that more dangerous environment that I think is presented by foreign fighters".
Mr Key also wanted to reform SIS legislation. However, he said he would prefer to do that on a bipartisan basis with Labour under its new leader.
If he could not secure Labour's support, "then there's a very strong chance that I won't progress changes in that area".
