The Federal Government has detailed changes to give intelligence agencies more power in response to growing concerns about jihadists returning to Australia.

Attorney-General George Brandis has introduced legislation to Parliament to expand the ability of spies to hack computer networks, allow more flexible warrants and improve cooperation between different intelligence agencies.

The changes also set out tougher jail terms for people who leak information or make unauthorised copies of secret documents.

Senator Brandis said the current legislation covering Australian Security Intelligence Organisation (ASIO) is "in some respects obsolete".

"It pre-dates the internet age," he said.

Senator Brandis said the new legislation brings the intelligence agencies' powers up-to-date with technological changes and will allow:

one warrant to cover a network of computers and electronic devices, not just individual computers

one warrant to cover a network of computers and electronic devices, not just individual computers the computers of third parties (those who are not suspects) to be used in order to access other targeted computers

the computers of third parties (those who are not suspects) to be used in order to access other targeted computers intelligence officers to disrupt the operations of a computer in some circumstances

The head of the domestic spy agency ASIO has said there are "significant and continuing threats" and the changes will help prevent a terrorist attack on Australian soil.

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ASIO director-general David Irvine said the changes will make security operations a lot more efficient.

"If you are conducting a particular investigation which involves a whole series of intrusive surveillance techniques including beaconing, tracking, listening device and so on, at the moment we have to get a single warrant for each of those particular activities," he said.

Changes to allow spies to closely monitor suspected jihadists

The legislation also allows ASIO to work more closely with its foreign-based counterpart, the Australian Secret Intelligence Service (ASIS).

Under the changes it will be possible for ASIS to collect information on Australian citizens overseas on behalf of ASIO and spy on Australians without ministerial approval.

There will also be greater protection from civil and criminal liability for ASIO employees involved in special intelligence operations.

Mr Irvine said the changes keep pace with the changing nature of threats posed to Australia.

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"In the past, we have rarely needed to collect intelligence on Australians overseas," he said.

"But in the current operating environment, and you will think Syria and Iraq particularly, there is need to know what Australians are up to, particularly if they're going to come home and commit terrorist acts here in Australia."

There are about 60 Australians in Syria or Iraq working with terrorist organisations and another 150 people the security agencies believe may leave Australia to join the fighting.

Mr Irvine said Australia faces "significant and continuing threats of politically-motivated violence, particularly of terrorism".

"There's a number of people, admittedly a very small number of people, but nevertheless a significant number of people, who subscribe to the theories of violent jihad and who could at any time be prompted to carry out an attack, in Australia or overseas," he said.

"It's been very difficult to collect information on them.

"Our job is to try to predict and prevent that, and part of this bill is to improve the tools that we have to do that."

Brandis foreshadows telephone, internet data retention

The Federal Government is also cracking down on whistleblowers working in security agencies.

Officers who leak secret information will face a maximum jail term of 10 years, up from the current limit of two years.

The Government is also making it a crime to copy or remove secret information, even if it is not passed on to anyone else. Anyone convicted in those circumstances could be jailed for up to three years.

The new crime and increased penalties will be expanded to apply to employees of the Defence Intelligence Organisation and the Office of National Assessments, as well as the domestic and foreign-based spy agencies.

Senator Brandis said it "fills a gap in the legislation" but denied it has been driven by any particular incident.

He said these would be the first tranche of changes to national security legislation with more expected to follow later in the year.

They could include more controversial measures, such as compelling phone companies and internet service providers to keep data for up to two years.

"The question of data retention is under active consideration by the Government," Senator Brandis said.

He pointed to recent data retention laws in the United Kingdom and the European Union.

"This is very much the way in which Western nations are going," he said.

"It's not a decision which Australia has yet made."

Mandatory data retention was considered by a parliamentary committee in 2012, raising the ire of the Greens and Liberal MP Steve Ciobo.

"I think that this proposal is akin to tactics that we would have seen utilised by the Gestapo," Mr Ciobo said at the time.

Mr Irvine said data retention is "absolutely crucial" to the work of intelligence and law enforcement agencies.

"Almost every ASIO investigation and a very large number of law enforcement investigations depend at least in the first instance on access to retained data," he said.

Ludlam criticises proposal for 'indiscriminate surveillance'

But the Government may face a battle to get parliamentary approval if it proceeds with the controversial proposal.

The previous Labor government decided against introducing mandatory data retention laws, and the shadow attorney-general Mark Dreyfus says the Opposition would need to be convinced that it is now necessary.

"Any mandatory data retention scheme we'll look closely at," he told ABC Radio's PM program.

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"But it would certainly need to include safeguards, it would certainly need to include oversight, and it's up to the Government to put forward such a scheme, if the Government wishes to proceed with it."

Greens Senator Scott Ludlam is vehemently opposed to a mandatory scheme to collect phone and internet data.

"We think terror laws should be proportionate, they should be targeted, and they should be used only extremely rarely," Senator Ludlam told PM.

"What we have here is a proposal for indiscriminate surveillance of the whole population, and I think it's important it never sees light of day."

He says any changes to national security laws should be accompanied by new measures to protect privacy.

"We see updates to expand ASIO's powers in parliament roughly once a year, sometimes more than that, and we never get to see the bills that update privacy protections for the same reasons, and privacy protections as a result are lagging far behind," Senator Ludlam said.

The changes to security laws have prompted the Government to back down on its plans to scrap the independent watchdog on national security measures.

The position of Independent National Security Legislation Monitor was cut in the budget to save money, but that decision has now been reversed.

However, the position is currently vacant as the term of the most recent monitor, Bret Walker SC, has expired.

Labor and the Greens have both welcomed the Government's backdown and say a new monitor should be urgently appointed.

"The monitor is not red tape, they said quite incorrectly that the monitor's task was done, that wasn't right," Mr Dreyfus told PM.

"This substantial package of national security changes that we've had introduced in the Senate today, it's a prime example of why you need to have an independent national security legislation monitor."

A joint national security parliamentary committee will examine the legislation before the changes are implemented.

However, independent MP and former intelligence officer Andrew Wilkie says the Government needs to allow more time for them to be reviewed.

"It is self-evident that two months is simply not enough time," he said.

"It is not enough time for the committee to get organised and for the community to prepare the sorts of submissions that the community would want to submit."

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