Security - ASIO

Budget Review 2010-11 Index

Budget 2010–11: Security

Australian Security Intelligence Organisation (ASIO) and related intelligence issues

Nigel Brew

After several years of receiving regular annual increases to its budget and experiencing rapid, significant growth in staff numbers under a planned expansion program stemming from the 2005 (Taylor) Review of ASIO Resourcing, ASIO’s overall budget has again increased (from $427 million in 2009–10 to a total of some $717 million this year) as the program enters its final phase.[1]

This is despite the fact that ASIO has this year suffered what is effectively a budget cut of $15.1 million in the form of money clawed back from the forward estimates. These ‘savings’ are described in Budget Measures: Budget Paper No. 2: 2010–11 as being the result of ‘increased efficiencies’, achieved through ASIO adopting ‘strategic work practices that will ensure that it operates more effectively and efficiently’ (ASIO is one of a number of agencies subject to ‘increased efficiencies’ this year).[2] Although there is no detail provided as to how the $15 million cut and the resulting changes enable ASIO to operate more efficiently, Budget Paper No. 2 assures that the cut ‘will not impact on ASIO’s operational activities, nor affect service delivery to operational areas’.[3] In all likelihood, ASIO has indeed simply streamlined some of its operating procedures as it moves through the final stages of a period of dramatic growth. Indeed, as some commentators have suggested, after nearly a decade of increased spending on the intelligence agencies (‘tenfold since 2001’ in some cases), some of them may now be over-resourced.[4]

ASIO is also expecting an increase of 89 to its Average Staffing Level (ASL) this coming financial year, bringing the agency’s ASL to a total of 1800.[5] This is in line with ASIO’s ongoing five-year growth program and keeps it on track to meet its objective of 1800 staff by 2010–11, consistent with the recommendations of the Taylor Review.[6] ASIO staff numbers have been steadily increasing every year now for some time.[7]

Evidence exists that ASIO has begun expanding its focus beyond counter-terrorism, which necessarily stemmed from the terrorist attacks of 11 September 2001, and is making a return to dealing with re-emerging traditional national security threats by actively enhancing its counter-espionage capabilities.

In his inaugural National Security Statement to Parliament in December 2008, the Prime Minister highlighted the threat of increased espionage and foreign interference targeting Australian military, diplomatic, and intelligence institutions, describing it as ‘inevitable’.[8] In a farewell address to staff in February 2009, the former Director-General of ASIO, Paul O’Sullivan, stated:

We’ve broadened and strengthened our human and technical collection, and our investigative and strategic analysis, not only in counter-terrorism, but across all areas of security concern. We have responded proactively to the evolution of espionage in the 21st century, and the accumulation of challenges this presents, by boosting our counter-espionage and foreign interference capability.[9]

Similarly, in ASIO’s 2008–09 annual report, the current Director-General, David Irvine, noted that 2008–09 ‘saw the most intense period of operational activity since 2005’.[10] All of this suggests that ASIO is busy addressing a range of ongoing and re-emerging threats to security while continuing to manage significant growth in both the numbers and capabilities of its personnel. Indeed, as ASIO’s Portfolio Budget Statements 2010–11 note, ‘ASIO continues to build capability and operational momentum against counter-espionage and foreign interference targets, which includes a focus on electronic espionage’.[11]

Also announced in the Budget is the fact that over the next 18 months, ASIO and its five partner agencies, which together comprise the Australian Intelligence Community, will be subject to an Independent Review.[12] This proposal is consistent with a recommendation of the (Flood) Inquiry into Australian Intelligence Agencies that external reviews of the Intelligence Community be conducted every five to seven years.[13] Given that the Flood Inquiry conducted in 2004 was the last major review of the intelligence agencies, that traditional security threats appear to be re-emerging with a modern twist, and that both the staffing and funding of the intelligence community have increased dramatically over the last decade, it is indeed timely that a full-scale systemic review of the intelligence community be carried out to determine and ‘ensure its effectiveness in supporting the policy and operational needs of the Government’.[14] The Government is providing $3 million over two years to the Department of the Prime Minister and Cabinet to undertake the review, and the overall cost will be offset by savings from ASIO in 2009–10.[15]

Although the terms of reference or any other details of the Independent Review are yet to be released, there has been some speculation in the media as to what it might involve. Two weeks before the review was announced in the Budget, a report in The Sydney Morning Herald cited ‘intelligence sources’ who claimed that a secret review of the intelligence community was underway and that its recommendations proposed major changes to long-standing limitations on the powers and activities of Australia’s intelligence agencies, such as allowing:

  • ASIO officers to carry weapons for self-defence
  • officers of the Australian Secret Intelligence Service (ASIS) to carry weapons more freely and initiate and engage in paramilitary-style activities overseas (bringing it into line, it is claimed, with the UK’s Secret Intelligence Service [MI6], and the CIA) and
  • the Defence Signals Directorate (DSD) to intercept communications within Australia.[16]

The Government denied the review existed. Following the announcement of the Independent Review in the Budget, The Sydney Morning Herald took up the story again and linked its earlier claims to the Budget announcement, claiming that it had ‘broken the story’ back in April.[17] The Government again refused to comment in any detail and certainly did not confirm a connection. Another media report cited ‘intelligence and security insiders’ in suggesting that the former Inspector-General of Intelligence and Security, Ian Carnell, would be a likely candidate to lead the review.[18]

Funding of $9.1 million (over four years) has been allocated in the Budget to the establishment of a multi-agency Counter-Terrorism Control Centre inside ASIO to improve the integration and coordination of counter-terrorism capabilities across relevant government agencies.[19] The concept was originally announced in the Counter-Terrorism White Paper of February 2010 and the cost of the measure will be met from within ASIO’s existing resources.[20]

The Government has also provided $10.1 million over two years (including $0.3 million in capital funding) to ASIS to enhance its intelligence gathering capability, although $8.3 million of this has already been included in the forward estimates.[21]

In another intelligence-gathering measure funded from the forward estimates, the Government is providing $101.6 million over four years (including $9.5 million in capital funding) to ASIO, the Attorney-General’s Department, the Australian Crime Commission and the Australian Federal Police for the maintenance and further development of telecommunications interception capabilities and delivery systems.[22]

The combined effect of the intelligence-related measures announced in the 2010–11 Budget is to underpin the Government’s public recognition of the growing need to deal with the re-emergence of traditional security threats in a technology-enabled world, and to plan for the long-term strategic security implications of modern shifts in geopolitics. The proposed Independent Review of the Intelligence Community is an important opportunity to evaluate the efficiency and effectiveness of the intelligence agencies in a burgeoning and possibly over-resourced security environment, to ensure the overall balance is right and that they are in the best position possible to address such challenges. It should be money well-spent.

[1].    Includes both departmental income and equity injections. See Australian Government, Portfolio budget statements 2010–11: budget related paper no. 1.2: Attorney-General’s Portfolio, Commonwealth of Australia, Canberra, 2010, p. 245, viewed 14 May 2010,$file/12+PBS+10_11+ASIO+web+FINAL.pdf

[2].    Australian Government, Budget measures: budget paper no. 2: 2010–11, Commonwealth of Australia, Canberra, 2010, p. 95, viewed 13 May 2010,

[3].    Ibid.

[4].    J Kerin, ‘Review more tinker than tailor’, Australian Financial Review, 14 May 2010, p. 21, viewed 14 May 2010,;query=Id%3A%22media%2Fpressclp%2FM8PW6%22

[5].    Australian Government, Budget strategy and outlook: budget paper no. 1: 2010–11, Commonwealth of Australia, 2010, Table C5, p. 6–68, viewed 13 May 2010,

[6].    Australian Security Intelligence Organisation, ASIO report to parliament 2008–09, Commonwealth of Australia, Canberra, 2009, p. 43, viewed 14 May 2010,

[7].    According to the ASIO report to parliament 2008–09, staff numbers have increased by 735 people between 2004–05 (955) and 2008–09 (1690)—ibid., p.113.

[8].    K Rudd (Prime Minister), The First National Security Statement to the Parliament, 4 December 2008, viewed 13 May 2010,

[9].    P O’Sullivan, Director-General’s farewell address to staff, Australian Security Intelligence Organisation, 26 February 2009, viewed 13 May 2010,

[10]. Australian Security Intelligence Organisation, op. cit., p. vii.

[11]. Portfolio budget statements 2010–11: Attorney-General’s Portfolio, op. cit., p. 243.

[12]. The other agencies are the Office of National Assessments, the Australian Secret Intelligence Service, the Defence Signals Directorate, the Defence Intelligence Organisation, and the Defence Imagery and Geospatial Organisation.

[13]. P Flood, Report of the inquiry into Australian intelligence agencies, Commonwealth of Australia, Canberra, July 2004, p. 185, viewed 14 May 2010,

[14]. Australian Government, Budget measures: budget paper no. 2: 2010–11, op. cit., p. 286.

[15]. Ibid.

[16]. D Oakes, ‘Secret plan gives spies huge boost in powers’, Sydney Morning Herald, 28 April 2010, p. 1, viewed 14 May 2010,;query=Id%3A%22media%2Fpressclp%2FMZIW6%22

[17]. T Lester, ‘New phone tap powers planned for spy review’, Sydney Morning Herald, 13 May 2010, p. 6, viewed 14 May 2010,;query=Id%3A%22media%2Fpressclp%2F6XOW6%22

[18]   P Dorling, ‘Spy agencies probe to cost $3m’, Canberra Times, 13 May 2010, p. 3, viewed 14 May 2010,;query=Id%3A%22media%2Fpressclp%2FSPOW6%22

[19]. Australian Government, Budget measures: budget paper no. 2: 2010–11, op. cit., p. 107.

[20]. Department of the Prime Minister and Cabinet, Counter-terrorism white paper—securing Australia, protecting our community, Department of the Prime Minister and Cabinet, Canberra, (February) 2010, p. 28, viewed 17 May 2010, See also, K Rudd (Prime Minister), Securing Australia, protecting our community, media release, 23 February 2010, viewed 12 May 2010,

[21]. Australian Government, Budget measures: budget paper no. 2: 2010–11, op. cit., p. 198.

[22]. Ibid., p. 110.