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The cost of spying: $1 billion in Australia

Six intelligence agencies have been independently reviewed for the first time since 2004. Above, Robert Cornall, one of the review’s leaders and a former senior public servant. Photo: Andrew Taylor

AUSTRALIA’S spies now cost more than $1 billion a year to run – and they are increasingly involved in frontline operations, according to a landmark review of the country’s intelligence community.

Not only is the report the first time Australia has provided a headline figure for expenditure on its six intelligence agencies, the inquiry – the Independent Review of the Intelligence Community – is the first time since 2004 that the agencies have been independently scrutinised.

”Australia has seen the dramatic expansion of … intelligence in the last 10 years,” the review’s leaders, a former senior public servant, Robert Cornall, and a management consultant, Rufus Black, state in their report, issued yesterday.

“Australia has seen the dramatic expansion of … intelligence in the last 10 years” … the Independent Review of the Intelligence Community.

The six agencies are the domestic security agency ASIO, the foreign intelligence service ASIS, the electronic intelligence agency DSD, the analytical Office of National Assessments, and the Defence Intelligence Organisation and its geospatial partner DIGO.

In acknowledging the massive growth of the agencies – ASIO alone grew by 471 per cent between 2001 and 2010 and this year will occupy new headquarters in Canberra worth $590 million – the authors said the agencies’ role had changed significantly since the last review.

The agencies’ roles have ”evolved” so significantly that today they are directly involved in military and civilian operations in a way they were not six years ago.

”The intelligence agencies have been integrally involved in supporting military operations, protecting our maritime borders, stopping weapons proliferation and thwarting terrorist activities in Australia and our region,” the review says.

One of the most potent examples of that changing role is within ASIS. A decade ago the agency’s largest overseas station was in Jakarta, where it was primarily engaged in running ”agents” or foreign informants.

Today the biggest station is in Afghanistan and rather than running agents, ASIS officers there are likely to be involved in joint military operations with the Australian Defence Force and its international partners.

The authors note the significance of the huge growth in the intelligence community’s funding, revealing that the combined budget of the six agencies has grown by an annual rate of 14.6 per cent between 2000, when it was $317 million, and 2010, when it was $1.07 billion.

By comparison the 2011 intelligence budget in the US, which has 16 separate agencies, was $US54.6 billion.

The report is an unclassified overview of the highly secret final report, which was handed to the Prime Minister, Julia Gillard, in November.

The public version is broadly positive and, unlike its 2004 predecessor, which primarily investigated intelligence failures regarding weapons of mass destruction in Iraq, does not refer to any of its specific recommendations.

Despite that, Carl Ungerer, from the Australian Security Policy Institute, said the report had made some veiled criticisms. ”It concerns me, and the report hints at it, that even though we’ve accepted the rhetoric of an inclusive national security community, the reality is the second-tier agencies … are not fully integrated.”

The report does refer to problems regarding the relationship between the agencies and their law enforcement partners, which since 2008 have been part of Australia’s national security community.

More than a decade after the terrorist attacks on the US in September 2001, the intelligence agencies are only ”beginning” to work more effectively with their partners, the report says.

Dr Ungerer also noted that the report identified continuing problems with co-operation among the agencies at ”the lower levels”.

The report found that the increased powers and new laws created by Coalition and Labor governments since 2001 were ”sound” and subject to adequate oversight.