Australia's outgoing spy chief, Duncan Lewis, has warned foreign interference presents a greater threat than terrorism, describing it as an "existential threat" to the nation.

Key points: Duncan Lewis says "the current scale … of foreign intelligence activity against Australian interests is unprecedented"

Duncan Lewis says "the current scale … of foreign intelligence activity against Australian interests is unprecedented" An anti-foreign interference bill was passed last year and a new taskforce aimed at protecting Australian universities was recently announced

An anti-foreign interference bill was passed last year and a new taskforce aimed at protecting Australian universities was recently announced Mr Lewis asked if the Australian Signals Directorate should "be deployed in the extreme in protecting Australians"

Speaking ahead of his retirement later this month, the director general of the Australian Security Intelligence Organisation (ASIO) said the risk from terrorism had "plateaued", and espionage and foreign interference was "by far and away the most serious issue going forward".

"Terrorism has never been an existential threat to established states," Mr Lewis told the Lowy Institute in Sydney on Wednesday night.

"It is a terrible risk that our populations run and it is a very serious matter which must be addressed every day.

"The counter-espionage and foreign interference issue, however, is something which is ultimately an existential threat to the state, or it can be an existential threat to the state. It has the capacity to do that."

The Federal Government passed anti-foreign interference legislation last year and recently announced a new taskforce aimed at protecting Australian universities.

That decision followed a massive data hack at the Australian National University and concerns among some Coalition MPs that universities were not doing enough to combat China's influence on campus.

Mr Lewis said the threat was not confined to "one particular nation", although sophistication and intent varied greatly among other countries.

"ASIO assesses that the current scale and scope of foreign intelligence activity against Australian interests is unprecedented," he said.

"Unlike the immediacy of terrorism incidents, the harm from acts of espionage may not present for years or even decades. These sort of activities are typically quiet, they're insidious and they have a long tail."

Cyber threats also pose major risk, Lewis warns

Mr Lewis said Australia remained a "rich target" for state-sponsored cyber attacks and suggested the Government should consider giving the Australian Signals Directorate (ASD) domestic spying powers.

ASD's powers have been the subject of controversy after a News Corp article suggesting the agency's role could be expanded led to police raids on the home of journalist Annika Smethurst earlier this year.

"It is emerging every day, new information about how we are threatened or we are advantaged by the cyber vector," Mr Lewis said.

"And I think that, as we have those discussions, it is necessary to have a look at capabilities such as the Australian Signals Directorate to see whether it can inform, or assist, or be deployed in the extreme in protecting Australians."

Mr Lewis was appointed to lead ASIO in 2014 after a career in the military and other senior public service roles and said the "churn" in political leadership over the past decade had had an impact.

"What's changed over those 10 years or more is that the pulse of politics is moving increasingly quickly while the pulse of policy making remains on a fairly long sinusoidal curve," he said.

"Stability is a virtue in many respects and it has had something of an impact on security.

"But I must say that there is a kind of ensuring dimension to the security debate … It's a far more sophisticated and complicated discussion now within government than it was 10 or 15 years ago."