Senator TROOD (Queensland) (10.08 a.m.)—The Intelligence Services Legislation Amendment Bill 2005 seeks to implement changes to several statutes relating to the administration of Australia’s intelligence agencies. The proposed reforms are the product of three inquiries or reviews. The first was a broad-ranging inquiry into Australia’s intelligence services conducted by Mr Philip Flood in 2004 at the request of the Prime Minister, which was prompted in part by the intelligence shortcomings revealed over the Iraq intervention. The second was a review coordinated by the Department of the Prime Minister and Cabinet as a result of suggestions contained within the recent annual report of the Inspector- General of Intelligence and Security. And the third was a review of the bill conducted by the Parliamentary Joint Committee on ASIO, ASIS and DSD.

Together these reviews represent the most comprehensive evaluation of Australia’s intelligence services since the Hope royal commission of the 1970s—and one feels bound to say that they were not before time. I listened with interest to Senator Stott Despoja’s remarks that the Flood inquiry had not been adequate or far ranging. It seems to me to be quite the contrary, and that, in fact, the Australian people were well served by the extent of Mr Flood’s inquiry. He did a very comprehensive job in a relatively short time and he made some important recommendations for change.

The inquiries took place well before the recent terrorist attacks in London and, most recently and tragically, in Bali on Saturday. In both of these attacks Australians were injured and, in the latter, three and perhaps more Australians were killed. These were brutal and cowardly acts that served to remind us that the scourge of terrorism is very close at hand and very close to home and that, more than ever, Australia’s intelligence services play an absolutely critical role in the front line of defending Australia, its citizens and our interests abroad and at home.

I strongly support most of the changes proposed by the bill. I believe they will serve, as the minister said in his second reading speech, to strengthen the contribution of sound intelligence to the development of Australian government policy. I note that we are not talking just about policy in relation to counterterrorism. The intelligence agencies have a much wider remit, and these changes will affect national security issues much more broadly. They will touch upon matters such as the weapons of mass destruction, border protection, Defence Force operations and transnational crime in all of its numerous and seemingly endless and expanding variants.

The bill touches on the activities of all six of Australia’s intelligence agencies: the Defence Intelligence Organisation, the Office of National Assessments, ASIS, ASIO, DSD and DIGO. Two of these agencies, ONA and DIO, are assessment agencies; the others are collection agencies. Whether one or the other, all demand high analytical and technical skills and a great degree of professionalism for them to serve their cause. The work is often more art than science and, in a dynamic regional and international environment, the challenges of timeliness, useful insight and accuracy are often immense.

Despite these challenges, Mr Flood concludes that for the most part Australia’s intelligence agencies are performing their duties very effectively. He notes that they represent a potent capability for government. He notes that they have adapted well to the new challenges of contemporary international affairs and, particularly importantly I think, he notes that they remain independent of political influence. Nothing is more potentially corrupting of an intelligence service than the danger that it may fall prey to the expectations of its political masters. I think Mr Flood was very reassuring by underlining the point that these agencies remain independent of that political influence.

Nevertheless, he remarks that he believes that they can do better. To that end, he has recommended a range of reforms to enhance their effectiveness. The most significant of these recommendations is that the number of ONA staff be doubled and that there be a substantial increase in its funding. I note that the government has accepted this recommendation fully. Indeed, the government has accepted all of the Flood recommendations, but for one or two of relative unimportance. It has agreed to most of the reforms recommended by the other inquiries.

In the time available, I would like to comment on three broad issues raised by the bill and by the inquiries that gave rise to it. The first of these is in relation to legislative oversight. The Flood inquiry recommended that all Australia’s intelligence agencies be subject to the scrutiny of the parliamentary joint committee and that its name be changed to the Parliamentary Joint Committee on Intelligence and Security to reflect the widened mandate. The effect of this reform would be to bring ONA, DIO and DIGO under the committee’s remit for the first time. This is an important reform and one I greatly welcome. It will increase the workload of the committee, but provision is being made in the bill for an extension of the number of committee members, and I think that will adequately meet the challenges the committee will now face with its expanded workload.

There is a world-wide trend in the parliamentary democracies, evident in places like the United Kingdom and Canada, for agencies to be subject to greater public scrutiny. This process is increasingly important, I think, particularly at a time—as Senator Stott Despoja has remarked—when governments are increasingly keen to increase the powers of some agencies to take steps which may well impinge upon citizens’ privacy and civil rights. The reforms intended by the bill will enhance the committee’s important role and will reinforce Australia’s place, I think, at the forefront of international trends to improve procedures for parliamentary oversight.

One place where oversight is more thorough than it is in Australia is, of course, the United States. But this is a very different jurisdiction, where very different kinds of constitutional arrangements apply, and I think it would be highly unrealistic to consider the possibility that the committee might extend its powers in quite the same way as committees do within the United States Congress.

As strong as it is, however, there are some shortcomings in the oversight process, and mention is made of this in the committee’s 2003-04 annual report. One matter relates to questions of definition and another to the presentation of the Defence Signals Directorate’s budget. There are other mentions in relation to the intelligence agency’s report. The committee is quite frank when it remarks that these limitations affect its capacity to work effectively. I would encourage the government to respond positively to the changes the committee requests.

Overall, however, Australia’s experience of legislative oversight is, I think, very positive. So far, the committee’s history has been one of making a very responsible contribution to improving public policy and, I think most importantly, this contribution has been made on a cooperative, bipartisan basis. The committee deserves encouragement for the continuation of this work from both inside and outside the parliament, and I would encourage members of the committee to seek ways in which this can be done responsibly—consistent with the unique demands that their position places upon them.

The second broad issue that I would like to address is the matter of long-term strategic analysis. The Flood report is replete with references to the serious decline in the resources devoted to this important facet of intelligence. On page 16, for example, the report refers to the loss of diplomatic reporting capability within the Department of Foreign Affairs and Trade and, later, to ONA’s relative neglect of this form of analysis under pressure of other priorities.

The report points out that the Defence Intelligence Organisation has moved into this area of analysis, to the detriment of its primary responsibility—strategic intelligence analysis for the ADF. I share Mr Flood’s concern over this matter. Long-term strategic analysis is a critical element of intelligence, and running it down has, potentially, very serious consequences for the nation. So I share Mr Flood’s concern but, regrettably, I am not entirely confident that he has found the best solution to overcome it. Essentially, he recommends that DIO pare back its strategic reporting and analysis to matters directly related to the military and defence needs of the ADF. Secondly, he suggests that ONA be required to take the matter of long-term strategic analysis more seriously and devote more resources to the task. Thirdly, he rejects the proposal apparently made by one of his interlocutors during the course of his inquiry that DFAT be given greater resources to take on this strategic role.

I have the greatest respect for Mr Flood. He has had a distinguished career in foreign affairs and elsewhere. He has a great deal of professional experience, and I value his judgment—in fact, I respect it greatly. But I believe his view of this matter is perhaps ill advised. As assessment agencies, there is, of course, an obvious need for DIO and ONA to undertake strategic analysis that feeds directly into defence reviews, white papers, strategic policy statements and the like. But there is another need, and that is the national requirement for there to be an agency that will be an independent source of advice, providing a strategic view of longer-term global trends that may have an impact on Australia’s security and foreign policy interests.

The advice should cover fields as broad as strategy, politics, economics, science and technology, the environment and the law. The key question is how developments in these areas are going to intersect with, and perhaps shape, the national strategic goals and ambitions of Australia and how they will impact on our national interests—not today, not tomorrow, but five or 10 years down the track. The analysis must remain policy focused and it has to be contestable among other agencies. It is the type of strategic analysis that requires comprehensive treatment of complex and often distant trends—not in the few succinct paragraphs or pages of the typical ONA briefing, but at a deliberative length. It is the kind of work that, at times, might easily benefit from the sharing of ideas with outsiders in the public domain.

As the Flood report notes, ONA has tended to depreciate the value of this kind of analysis in recent years. Its recent institutional culture has inclined towards the production of short, focused forms of analysis. These are in the form of current intelligence reports, current assessments, watch reports, warning reports and the like. They are assessments which reflect a short-term or a more immediate policy challenge—perhaps in response to a specific ministerial request, or as part of a standard, regular briefing. Secrecy and confidentiality are, rightly, an elemental and organic part of the work.

The qualities of these reports help to underpin the universally high regard in which ONA’s analytical capabilities are held. They are the foundation of the professionalism with which it fulfils its primary mandate. The preparation of periodic longer term strategic assessments that are supposed to be part of ONA’s mandate has been largely overlooked. This suggests, to me at least, a number of things: overwork and other priorities, or perhaps a strong institutional culture of doing one form of analysis over another.

Rather than leave all strategic assessments with ONA, I believe a more satisfactory solution would be to establish a relatively small agency specifically mandated to undertake long-term strategic analysis and situated in a completely separate portfolio, perhaps DFAT. There it would be free of the constraints that have inhibited ONA’s capacity to undertake the work. The new agency would develop its own innovative techniques of analysis, establish a research agenda independent of the tyranny of the short term, have easy access to the richness of DFAT’s global diplomatic reporting, subject its work to the contestability of other agencies and comfortably draw in the expertise of knowledgeable outsiders as circumstances demand. There are numerous models around the world on which to base this kind of agency.

I acknowledge that agencies can adapt to new challenges. ONA could well change in a way that exhibits the confidence that Mr Flood has shown in it. I will certainly watch developments with interest. But I must say I am apprehensive about it being able to make those changes and I think we probably need to rethink that particular element of the proposal.

The third issue I would like to raise quickly relates to the matter of the public and outside experts. There are numerous places in the Flood report where it refers to the potential for value adding to intelligence and national security assessments through greater agency contact with the public and outside experts. This is an observation that I believe should be taken seriously. Most of these agencies have a very poor record of outside contact. They are loath to engage the public and particularly academe, where experts may reside. I realise that going to outsiders is not easy for agencies, whose natural working culture is secrecy and whose workload deadlines make severe demands on time. Of course, public engagement often carries some risks, though governments almost always overstate them. But we have an extraordinary abundance of knowledge and expertise in our universities, in think tanks, in professional associations and elsewhere. Much of this expertise is focused on the Asia-Pacific region, where our national security interests are concentrated. A great deal of the expertise is actually policy oriented.

If these resources were more effectively employed by government, they could be of immense value to the development of national security policy. They would add knowledge and insight and, I think, just as importantly, a further measure of contestability to agency analysis. Given the intelligence shortcomings over Iraq, this is perhaps a critical requirement for the future.

In the context of establishing more sustained and systematic interaction and dialogue between governments and academe, I welcome an initiative recently undertaken by the ANU and Griffith University to establish the Australian Council of Strategic Studies. One of the roles of the council is to engage regularly with government on topics of mutual interest. I understand that several roundtable discussions have already taken place and that all parties, including participants from several government agencies, have regarded them as very valuable encounters and they promise a great deal of contact in the future. This kind of activity highlights the point that, if agency officials and analysts can be stirred from their comfort zones within government, there are considerable rewards to be had. Academics, generally speaking and in my experience, are keen and enthusiastic about making a contribution.

This bill will secure a long overdue renovation of Australia’s intelligence services. As Mr Flood points out, generally the nation is well served by the dedication and professionalism of existing staff. They often work in difficult circumstances and in difficult environments. The changes in the bill will enhance agencies’ effectiveness. We need that because the challenges of securing our national interest in the current international environment will not diminish; if anything, they are likely to intensify in the future.