And because the decision was never properly explained, the Chinese government accused Canberra of "discrimination" and "protectionism". One of Beijing's cheerleaders in Australia, Bob Carr, got quite worked up, calling it the decision a "sacrifice to the witches' sabbath of xenophobia and economic nationalism". It was a puzzle because the federal government had allowed the same Chinese state-owned firm to buy control of a big power distributor in South Australia, ElectraNet. Morrison said that Ausgrid was different, but experts were baffled. Loading There was speculation among tech security experts at the time that it was because Ausgrid operates secure fibre cables to NSW police headquarters and a number of major private firms. But, in fact, it is vastly more sensitive than anything that had been guessed at. The failure of proper scrutiny was considered so serious that the federal government has since set up a new Critical Infrastructure Centre to make sure it never happens again.

The federal government has long maintained a national list of critical infrastructure, and Ausgrid was on it. But NSW's sale process went on for month after month without any red flags going up in Canberra. Eventually, it was Australian Signals Directorate, Australia's electronic spy agency, that raised the alarm within the government. "It was half a minute to midnight when people in ASD realised that they had information relating to the extreme criticality and sensitivity of Ausgrid," says an official who was involved in the process. The top-secret joint US-Australian base at Pine Gap near Alice Springs. Credit:STF/AFP/Getty Images In fact, Ausgrid hosts a piece of infrastructure that is a critical support to the Joint Facilities at Pine Gap, near Alice Springs. Pine Gap is the top secret centrepiece of the Australia-US alliance and central to US nuclear war-fighting capability. The US network of satellites that "stares" at the Eurasian land mass looking for the tell-tale flare of a nuclear missile launch sends its findings to the Pine Gap base.

It's the indispensable communication conduit that the US depends on in the event that North Korea, Russia, China or Iran should decide to strike. It was switched on in the 1970s but its existence was only disclosed publicly by an Australian academic, the late Des Ball, in 1980. The US had been livid at Canberra when the federal government allowed a Chinese firm, Landbridge, to buy operational control of the Port of Darwin, merely because it put the Chinese company in a position where it could perhaps monitor American military movements throughout the port. Des Ball at the entrance to Pine Gap in 1984. How would the US react if Australia handed to the Chinese state-owned State Grid consortium 50.4 per cent of a critical support to Pine Gap? It was a deeply unsettling moment when the top officials of Australia’s national security system realised that this was exactly what was about to happen. In the inner sanctum of the cabinet's national security committee, there were some terse exchanges. The then secretary of the Defence Department, Dennis Richardson, emphatically rejected any suggestion that it was his department’s responsibility to police the critical infrastructure list.

The Treasury hosts the body that has to consider foreign buy-ins of any scale or sensitivity, the Foreign Investment Review Board, but the Treasury doesn’t manage the list of critical infrastructure. “Well,” Scott Morrison asked at one point, “Who is responsible for managing the critical infrastructure list?” He looked around the table, according to multiple people present at the time. It was not a secret. In fact, the public website of the Attorney-General’s Department stated that it was responsible for managing the list.

After a silence, when the attorney-general George Brandis said nothing, the secretary of his department, Chris Moraitis, spoke up: “We are.” No longer. The new Critical Infrastructure Centre is in the newly created Home Affairs ministry. Indeed, some ministers said that this episode demonstrated why a single co-ordinating agency was needed. They said that Brandis was not specially culpable in the oversight; in the final analysis, officials and ministers said that it was a debacle with enough blame to go all round. Including, they said, to the NSW government, which, although it was not informed of the super-sensitive nature of Ausgrid, should have taken earlier precautions to co-ordinate with Canberra. In hindsight it seems to have been a moment of wakening from an official torpor, a realisation that Australia was now in a world demanding more alertness. Other governments around the world are now experiencing the same wakening.

Peter Hartcher is international editor.