Australia’s intelligence agencies seek powers to spy on citizens on home soil

An Australian intelligence agency responsible for spying on foreign governments wants to be able to spy on Australians in Australia.

An official review into Australia’s nine intelligence agencies said the agency should be allowed to breach the long-standing demarcation between Australia’s domestic and foreign spy services.

The report did not identify the agency, but it is likely to be the Australian Signals Directorate, which taps phones, satellites and the internet, or the Australian Secret Intelligence Service, which recruits spies overseas.

The Federal Government did not say if it would implement the change, which appears aimed at companies run by Australians, or based in Australia, that may be fronts for foreign intelligence services, or Australians who have joined terrorist groups in other countries and are communicating with people in Australia.

“We received case studies establishing a compelling case for certain foreign intelligence activities to be conducted onshore,” said the review, which the Department of Prime Minister and Cabinet published on Friday.

“Changes in the technological and strategic environment” have created an “increasing need for some foreign intelligence activities to be conducted within Australia,” it said.

‘Crave even more power’

A former intelligence analyst for the Australian government, Alan Dupont, said foreign spy agencies had learnt how to get around privacy protections operating in Western countries, prompting the need for updated rules.

“I can understand their (the Australian agency’s) reasons for wanting to do that providing the privacy and processes are respected,” he said.

However, a Libertarian MP in NSW, John Ruddick, said Australian intelligence agencies had too much power already. “They crave even more power to monitor citizens,” he said.

Written by veteran public servant Heather Smith and former diplomat Richard Maude, the review has led to an extra $44.6 million being allocated over four years in next week’s Federal Budget to the Office of National Intelligence, which compiles and interprets information from other spy agencies for the Prime Minister.

Two of those agencies, ASIS and ASD, are only allowed to spy on Australians with the permission of the foreign affairs or defence ministers. These requests have to be justified legally by showing that the Australian may be acting for a foreign country, or a company that is controlled by a foreign government.

ASIS and ASD are not allowed to conduct operations within Australia if they would have to break the law, such as listening to private phone calls. That is the job of the Australian Security Intelligence Organisation.

Back in favour

The rules were created to stop intelligence agencies using their huge powers and resources to spy on innocent Australians, following allegations during the Cold War of people being targeted because of their political allegiances.

The proposed changes would break down some of the restrictions placed on the intelligence agencies following scandals in the 1980s, including a 1983 ASIS training exercise where staff at Melbourne’s Sheraton Hotel were held at gunpoint.

As the threat of international conflict and domestic terrorism has grown after the 2001 terrorist attacks in the US, the agencies have grown and been given more powers. In 2018 ASIS agents were allowed use weapons to protect themselves again.

Since the Labor government was elected in 2022, spending on national security increased 20 per cent. Next week’s Budget will allocate $318 billion to national security over the next four years, the Government said.

Officials say Australians are being targeted by foreign spy services at a greater rate than at any time in history. “The threat is broader, and deeper, than you might think,” Nathan Smyth, the head of National Security in the Home Affairs Department, said in January.

Control or influence?

One of the review’s recommendations is to loosen the rules for targeting foreign companies, which have to be controlled by a government before the spy agencies can go after Australians working for them.

Many dictatorships, including Russia, have influence over companies based there, but proving they control the companies can be hard. One often-cited example is Chinese phone company Huawei, which has been banned from by several Western governments despite asserting it is an independent business separate from the Chinese Communist Party.

“The absence of formal or legal control or direction will often make it very difficult to establish that a company is subject to control or direction,” the review said.

Spy agencies should be allowed to go after “Australians working for companies that are not controlled by a foreign government, but that are subject to influence or an obligation to act on that government’s behalf,” it said.

An unclassified version of the report was published after being given to the government last year.

Last year ASIO director-general Mike Burgess said a foreign spy ring recruited a former Australian politician, who proposed adding the family member of a prime minister in to the group. He said the plan did not go ahead.