Australia's domestic spy agency ASIO will lead a new taskforce aimed at strengthening Australia's response to the threat of foreign interference.

Key points: The Government will spend almost $88 million to crack down on foreign interference

The Government will spend almost $88 million to crack down on foreign interference It comes amid warnings foreign interference poses a greater threat than terrorism

It comes amid warnings foreign interference poses a greater threat than terrorism A spy-lead taskforce will oversee Australia's efforts to counter foreign efforts

The Federal Government plans to spend almost $88 million to establish a new Counter Foreign Interference Taskforce.

The taskforce will expand the resources of the National Counter Foreign Interference Coordinator — which sits within the Home Affair Department — to help "disrupt and deter anyone attempting to undermine our national interests".

"This threat has been evolving and we have been staying ahead of it by building that capability now over many years, and most recently this initiative, which improves the collaboration, ensures that the tools they have are world-class and they can work together to identify, disrupt and prosecute," Prime Minister Scott Morrison said.

The taskforce will be led by a senior Australian Security Intelligence Organisation officer, and include investigators from the Australian Federal Police and staff from a range of security agencies.

The Government intends for it to increase intelligence collection, assessment, law enforcement capabilities and collaboration and decision-making between agencies to result in more disruptions of possible interference.

It comes amid heightened national security concerns raised by allegations of Chinese espionage, influence over political parties and multiple cyber attacks on universities and federal agencies.

Shortly before retiring earlier this year, outgoing ASIO director-general Duncan Lewis said foreign interference presented a greater threat than terrorism.

The taskforce comes a week after it was revealed Chinese man Wang Liqiang was seeking political asylum in Australia after going public with allegations about Chinese spying.

The Government has dismissed suggestions the taskforce was in response to that case, and insisted it had been under development for months.

It also comes amid suggestions China was grooming Bo "Nick" Zhao to be a Chinese spy inside Australia's Parliament.

He was found dead in a Melbourne motel room in March after reportedly approaching ASIO.

"On the advice that I've received, I don't have any concern in relation to issues domestically... in relation to this particular matter," Mr Dutton told reporters in Canberra on Monday.

"I think the [ASIO] director-general, though, will have something further to say in due course, and I'll let that investigation run its course."

The foreign interference taskforce does not require legislation to be established, meaning it won't have to pass the Parliament.