National security overview

Budget Review 2018–19 Index

Cat Barker

The 2018–19 Budget contains several new expense measures relating to national security. This includes funding for the implementation of recommendations made in the 2017 Independent Intelligence Review (building on funding already provided since the 2017–18 Budget), and additional funding for the Australian Secret Intelligence Service (ASIS), Australian Security Intelligence Organisation (ASIO) and the Australian Criminal Intelligence Commission (ACIC). As was the case in the 2017–18 Budget, the amounts allocated to several measures have been withheld on national security grounds and the descriptions of some measures shed little light on how the funding will be used. While there are sound reasons not to detail both the amounts of national security-related funding and the purposes for which it has been allocated, it is not clear why the amount of funding alone could not be disclosed, as it has been in previous years, nor why the amount of funding for some agencies (such as ASIO) has been disclosed, but not others (such as ACIC).[1]

2017 Independent Intelligence Review (the Review)

The most recent independent review of the Australian Intelligence Community (AIC) was completed in June 2017, with a public version of the report released in July 2017.[2] The reviewers made 23 recommendations relating to structural arrangements, capability and resourcing, legislation, and oversight.[3] They also considered that looking ahead, the AIC construct would become increasingly artificial, and that a more useful frame of reference would be the National Intelligence Community (NIC). The NIC includes the six agencies comprising the AIC (ASIS, ASIO, Australian Signals Directorate, Australian Geospatial-Intelligence Organisation, Defence Intelligence Organisation and the Office of National Assessments (ONA)) and also ACIC, the Australian Transaction Reports and Analysis Centre (AUSTRAC), and the relevant parts of the Australian Federal Police (AFP) and the Department of Immigration and Border Protection (now the Department of Home Affairs (DoHA)).[4]

The Government has not released a formal response to the Review, but stated when it released the report that it accepted the recommendations ‘as a sound basis to reform Australia’s intelligence arrangements’, and has been progressively implementing them.[5]

The Mid-Year Economic and Fiscal Outlook 2017–18 included $154.5 million over five years to:[6]

  • establish the Office of National Intelligence (ONI) in the Prime Minister and Cabinet portfolio ($118.5 million). One of the Review’s most significant recommendations was the replacement of the ONA with the ONI, led by a Director-General who would be the head of the NIC and the Prime Minister’s principal adviser on intelligence community issues. The ONI would have a leadership and coordination role across the NIC, including advising the Government on intelligence collection and assessment priorities and the appointment of senior NIC office-holders, and the evaluation of NIC agencies[7]
  • fund a ‘24/7 cyber incident monitoring and response capability’ in the Australian Cyber Security Centre ($33.6 million) and[8]
  • fund additional secondments from ASIO to the Australian Government Security Vetting Agency (AGSVA) ($2.4 million). The Review noted that the time taken for AGSVA to complete Top Secret (Positive Vetting) security clearances was ‘exacerbating the intelligence community’s existing workforce challenges’. It recommended funding for additional ASIO secondments to AGSVA as soon as possible, and a review of the situation in early 2018, with alternative options to be explored if the existing remediation efforts had not resulted in processing times being reduced to six months or less.[9]

In the 2017–18 Portfolio Additional Estimates (PAES), the Government included additional funding for the Inspector-General of Intelligence and Security to oversee the intelligence functions of the AFP, ACIC, DoHA and AUSTRAC (in addition to its existing oversight of the six AIC agencies), and for the Attorney-General’s Department (AGD) and the Office of Parliamentary Counsel (OPC) (with a description to be provided in the Budget).[10]

The Budget includes additional funding for implementation of the Review’s recommendations. The total amount is marked as not-for-publication on national security grounds, and will be spread across ‘various agencies’.[11] However, included in the total is:

  • $52.1 million for the IGIS’s increased oversight functions (already included in the forward estimates). The Review recommended that the IGIS’s jurisdiction be expanded to include AUSTRAC and the intelligence functions of the AFP, ACIC and what is now the DoHA, and that the IGIS be given additional resources to enable it to sustain a full-time staff of around 50.[12] The PAES indicate that the funding includes increasing staffing from 17 to 55 FTE, as well as ‘commercial rent, IT systems and secure fit-out costs of new premises’[13]
  • $18.1 million for AGD and OPC to undertake a comprehensive review of the legal framework governing NIC agencies and related oversight bodies (already included in the forward estimates). The Review recommended that this be undertaken by ‘an eminent and suitably qualified individual or number of individuals, supported by a small team of security and intelligence law experts with operational knowledge of the workings of the intelligence community’. It also recommended some specific amendments that could be progressed while the comprehensive review took place and[14]
  • an unspecified amount to establish a Joint Capability Fund (JCF) for the NIC. The Review recommended that a JCF be established to finance NIC cross-agency projects, including an NIC Innovation Fund, NIC Innovation Hub and an NIC Science and Technology Advisory Board. It recommended the total amount in the JCF be equivalent to the Efficiency Dividend levied on AIC agencies and the intelligence functions of other NIC agencies.[15] The Review estimated that if its recommendations about the application of the Efficiency Dividend to NIC agencies were adopted, that the JCF would accumulate around $370.0 million over the five years from 2017–18.[16]

Other national security funding

The Budget also includes $24.4 million of additional funding for ASIO, and undisclosed amounts for ASIS (over two years from 2018–19) and ACIC (over five years from 2017–18) ‘to meet the Government’s national security objectives’.[17] The Mid-Year Economic and Fiscal Outlook 2017–18 also included undisclosed amounts of additional funding for ‘various agencies’ to ‘enhance counter-terrorism capability within the South East Asia region’ and separately for ASIS to support its operations and ‘strengthen its capacity to meet the strategic priorities and objectives of the organisation and the Government’.[18]



[1].          C Barker, ‘National security overview’, Budget review 2017–18, Research paper series, 2016–17, Parliamentary Library, Canberra, 2017.

[2].          Department of the Prime Minister and Cabinet (PM&C), 2017 Independent Intelligence Review, Commonwealth of Australia, Canberra, June 2017. The reviewers were Michael L’Estrange and Stephen Merchant, with Sir Iain Lobban acting as an adviser.

[3].          For a summary of recommendations, see: Ibid., pp. 13–22.

[4].          Ibid., pp. 46–48.

[5].          M Turnbull (Prime Minister), G Brandis (Attorney-General), P Dutton (Minister for Immigration and Border Protection) and M Keenan (Minister for Justice), A strong and secure Australia, media release, 18 July 2017. In addition to the funding measures covered in this article, the Parliament passed legislation to establish ASD as a statutory agency and expand its functions; see C Barker, Intelligence Services Amendment (Establishment of the Australian Signals Directorate) Bill 2018, Bills digest, 94, 2017–18, Parliamentary Library, Canberra, 2018.

[6].          S Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year economic and fiscal outlook 2017–18, p. 175.

[7].          PM&C, 2017 Independent Intelligence Review, op. cit., pp. 53–64, 66–69 (Recommendations 1–5). In December 2017, the Government announced the appointment of the former head of ASIS, Nick Warner, as the new Director-General of the ONA and Director-General designate of National Intelligence: M Turnbull, Maintaining a strong and secure Australia, media release, 1 December 2017.

[8].          See: Ibid., p. 65 (part of Recommendation 3).

[9].          Ibid., pp. 77–78 (Recommendation 12).

[10].       Australian Government, Portfolio additional estimates statements 2017–18: Prime Minister and Cabinet portfolio, pp. 33, 35; Australian Government, Portfolio additional estimates statements 2017–18: Attorney-General’s portfolio, pp. 9, 13–15, 98.

[11].       Australian Government, Budget measures: budget paper no. 2: 2018–19, p. 163.

[12].       PM&C, 2017 Independent Intelligence Review, op. cit., pp. 115–118 (Recommendations 21 and 22).

[13].       Australian Government, Portfolio additional estimates statements 2017–18: Prime Minister and Cabinet portfolio, p. 33.

[14].       PM&C, 2017 Independent Intelligence Review, op. cit., pp. 89–110 (Recommendations 15–20).

[15].       Ibid., pp. 82–85 (Recommendation 7).

[16].       Ibid., p. 85. The Review recommended that the Efficiency Dividend continues to be applied to those agencies that are currently subject to it, and be applied to the ASD and ONI from two years after their establishment as statutory agencies (leaving the AGO and DIO exempt): pp. 83–85 (Recommendation 8).

[17].       Australian Government, Budget measures: budget paper no. 2: 2018–19, pp. 103, 131.

[18].       S Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year economic and fiscal outlook 2017–18, pp. 153–154.

 

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