The Australian Federal Police and Australian Security Intelligence Organisation will establish a Foreign Interference Threat Assessment Centre.

Home Affairs Minister Peter Dutton said agencies would have the resources to "investigate and disrupt threats to our national sovereignty". A further $3.9 million of existing department funding has been set aside to create a "diplomatic strategy" with international partners to counter threats.

"We live in a time of unprecedented foreign intelligence activity against Australia," Mr Dutton said. "Covert foreign operations can have serious implications for Australia's sovereignty by interfering with governmental and political processes."

While the counter-foreign interference laws are not publicly targeted at a particular country, they were announced in late 2017 amid intense focus on Chinese efforts to influence political debate in Australia on issues such as the South China Sea.

ASIO and the AFP will also get a $571 million for other operations including counter-terrorism.

The government has budgeted $178.9 million to reopen the Christmas Island detention centre to manage the transfer of sick asylum seekers from Nauru and Manus Island, although it has set aside only $23.7 million in 2019-20 on the expectation it will be able to repeal the legislation by July 1.

The government has budgeted $38.7 billion as part of its commitment to lifting defence spending to 2 per cent of gross domestic product by 2020-21.


But Marcus Hellyer of the Australian Strategic Policy Institute said it would be "a big jump" for Defence to hit the target, with its spending to reach1.93 per cent of GDP next financial year.

"To get from here to there is a $3 billion increase," he said.

The draw-down of Australian troops from Iraq and Syria will reduce the cost of overseas deployments to $703 million in 2019-20, although Defence will contribute an extra $6 million to Operation Sovereign Borders.

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