I’m generally sceptical of claims that Australian intelligence agencies have gained undue influence over policy, such as when Paul Keating claimed that the “nutters” running the agencies were responsible for the deterioration in Australia-China relations.

I can remember when the left-leaning critique was the opposite. In the aftermath of the Iraq war, it was commonly argued that elected leaders (namely the Howard government) had neutered the intelligence services so much that their analytical findings were being distorted to serve policy ends. I still have some sympathy for that argument and wish the Flood report had engaged with it in more detail, as there remains a tendency for intelligence agencies to be blamed for decisions that are ultimately the responsibility of elected leaders.

However, two quotes from former insiders have recently led me to wonder if the argument that Australia’s intelligence agencies have gained greater influence are better founded than I first thought. The first quote comes from Peter Varghese, former Secretary of the Department of Foreign Affairs and Trade (DFAT) and former Director-General of the Office of National Assessments (ONA), who argued that “a threshold has been crossed”. He contended in 2022 that:

One decisive change in the Turnbull-Morrison period has been the rise in influence of the intelligence agencies. This coincides with a new agenda: the intensification of national security, China’s influence operations and sovereignty concerns. A threshold has been crossed with the intelligence agencies now having a direct policy impact in a way we have probably not seen before. These agencies have enjoyed vast expansions in their budgets, while DFAT has struggled. Within the system, national security is more important and diplomacy is less important. Follow the money – that reveals the changed priorities. DFAT has been cut because successive governments see no political cost in doing so. The foundation stone in Justice Hope’s review of the security services was the need to separate intelligence assessment from policymaking. But this is now being eroded.

The second quote comes from Chris Taylor, the head of the Statecraft & Intelligence Program at the Australian Strategic Policy Institute (ASPI). Taylor contended in 2024 that:

In recent years, the NIC [National Intelligence Community] has come under some criticism, including from within the bureaucracy, for being ‘too prominent’ in national-security policy development in Australia, being seen to transcend a traditional intelligence role and trespass on the role of policy departments. I would argue that this role for intelligence hasn’t been sought but has instead been foisted upon it— ironically because of policy advisers’ sometimes underdeveloped understanding of how to most effectively utilise intelligence for policy purposes (including through integration with other policy inputs). In those circumstances, ministers have unsurprisingly tended to go to the source instead and seek counsel from intelligence agencies on policy questions arising from intelligence insights.

Both quotes suggest that Australia’s intelligence agencies have indeed gained greater policy influence, at least since the Turnbull government. However, neither quote contends that this resulted from sinister maneuvering by the intelligence services, instead suggesting that it reflects who the Ministers decide to listen to and a diminishing of policy capabilities in the public service.

The Varghese quote notes that these changes (if they are indeed occurring) indicate a departure from the principles laid down in two Royal Commissions chaired by Justice Robert Marsden Hope during the 1970s and 1980s. Some years back, Peter Edwards (military historian and Hope’s biographer) wondered if the “Hope model” was being challenged by a “Pezzullo model”, referring to the then head of the Department of Home Affairs, Michael Pezzullo, and the placing of five domestically oriented NIC agencies in the Home Affairs portfolio.

The Albanese government’s removal of four NIC agencies from the Home Affairs portfolio shows that the “Pezzullo model” has not won the day. However, the quote from Varghese (implicitly supported by Taylor’s) supports Edwards’ concern about the “Hope model” being under challenge, perhaps because current political leaders see less value in it. It will be interesting to see how this evolves, and whether the issue is discussed in the latest Independent Intelligence Review.

Update 1: Updated the description of Peter Varghese’s former role, on 4 September 2024.