He was addressing the media at the launch of the government's campaign ahead of a nationwide vote on extending the powers of the intelligence services.
The vote will take place on September 25th.
Parmelin said it was at present possible to monitor people considered suspicious, but only where legal proceedings were underway.
Change could not come soon enough, he said, according to the Swiss news agency SDA.
Although the topic was highly sensitive and affected personal liberties, the law would ensure a balance between security and freedom, he said.
The new law would allow for intelligence services to conduct preventative monitoring, including tapping telephones, bugging rooms and hacking computers.
Parmelin said every single case of surveillance would have to be approved by himself and a Federal Administrative Court judge.
The measures would only be permitted in the event of a terrorist threat, spying, arms proliferation or a cyber attack.
The defence minister said he expected the new legal provisions to be used around 10 times per year.
Large-scale surveillance as in other countries would not take place in Switzerland.
Opponents of the new law question whether it would help prevent attacks. They argue that attacks have been committed abroad where intelligence existed about the perpetrators.
Parliament has already approved the reform of the law on the intelligence services. The vote is taking place after leftwing politicians and representatives of civil rights groups formed an alliance to oppose it.