The announcement of a super-ministry to be led by Peter Dutton has grabbed all the headlines, but it has overshadowed the biggest proposed shake-up of our intelligence operations in decades.

Key points: New Office of National Intelligence will take more active role in driving intelligence policy

New Office of National Intelligence will take more active role in driving intelligence policy Australia's cyber security capabilities will be boosted with statutory body in Defence Department

Australia's cyber security capabilities will be boosted with statutory body in Defence Department Department of Foreign Affairs secretary says changes needed to ensure oversight of growing intelligence community

The changes would see the creation of a powerful new role, the Director of National Intelligence, overseeing a new agency, the Office of National Intelligence (ONI).

The ONI would replace the existing Office of National Assessments, which currently briefs the prime minister on the latest intelligence.

The new office would do that and much more, taking a more active role in driving intelligence policy across the Government, centralising communications with the 10 main intelligence agencies and the Government, and connecting with businesses and other outside players.

Australian Strategic Policy Institute executive director Peter Jennings said the changes could be seen as a bigger story than Mr Dutton's promotion.

"The creation of a director of national intelligence is probably something that is overdue in our system, and has the potential to change the shape and content of Australian intelligence agency work," he told the ABC.

Mr Jennings said the new intelligence boss would have the power to change how agencies operate, recruit and brief senior government figures.

The changes were recommended by former Department of Foreign Affairs secretary Michael L'Estrange, who yesterday released a review of intelligence operations with recommendations.

Mr L'Estrange told the ABC the new intelligence boss would ensure agencies cooperate and have the resources to keep Australia safe.

The former US director of National Intelligence James Clapper — whose position will now be replicated in Australia — said there was merit in adopting a similar strategy.

"I do think there is merit in having somebody who can look at intelligence as an enterprise and decide on a systematic basis, where to make investments and where to make divestments," he said.

Sorry, this video has expired PM Malcolm Turnbull announces new Office of National Intelligence (Photo: AAP/Mick Tsikas)

Cyber security elevated

Australia's cyber security capabilities will be given a significant boost with the Australian Signals Directorate (ASD) to become a statutory body with the Defence Department.

Mr L'Estrange has called for its director to be consider equal to the directors of ASIO and the Australian Secret Intelligence Service (ASIS) and for a senior military office to be appointed deputy.

The new office will take a more active role in driving intelligence policy across the Government. ( Supplied: Symantec )

Mr Turnbull's cyber security adviser, Alastair MacGibbon, will be promoted to lead the Australian Cyber Security Centre, which will operate 24/7 to respond to attacks.

Mr MacGibbon will be tasked with increasing cooperation with the ASD, which plays a critical role in cyber security.

"ASD are the experts in cyber security within the Australian Government and working more closely there is essential, but it's also about how we work with the private sector and everyone at home as well," he said.

Mr L'Estrange called for ASIO to give more funding so it can send staff to the Government security vetting agency, which is struggling with a backlog of applications that are slowing recruitment of cyber experts.

Increase in oversight powers recommended

Mr L'Estrange has also recommended a significant increase in oversight powers at a time when one minister will be given unprecedented control of national security departments.

The agency that investigates misconduct, the Inspector General of Intelligence and Security, has been criticised by some as "a paper tiger" unable to hold spooks to account.

But it will receive a cash splash to increase its staff from about 17 to 50.

Parliament's Joint Intelligence and Security Committee will also be given greater powers to look into how the system is working.

It will be able to launch its own investigations into misconduct and propose reforms to counterterrorism and national security legislation.

Mr L'Estrange said the current oversight arrangements were appropriate but changes were needed to ensure oversight of a growing and intelligence community and more complex work.