Australia's Foreign Relations (State and Territory Arrangements) Amendment Bill 2026

Mr TED O'BRIEN (Fairfax) (09:17): I rise to speak on the Australia's Foreign Relations (State and Territory Arrangements) Amendment Bill 2026, under which our Foreign Arrangement Scheme operates—a scheme the purpose of which is to ensure that Australia has a single coherent approach to foreign engagement not just in policy but also in practice, a scheme that seeks to ensure Australia's foreign policy is consistently at the centre of international engagements regardless of whether or not the Commonwealth is involved.

Our states, territories, councils and public universities engage with governments and institutions around the world every single day. That engagement is overwhelmingly positive, but problems can arise, deliberately or otherwise, where foreign actors seek to influence or extract information from Australian institutions in ways that cut across our national interest.

Such is the risk that, where an Australian public entity enters into an arrangement with a foreign government entity, it is obliged to notify the Commonwealth, which in turn has the ability to cancel an arrangement in the event that it is not in Australia's national interest. That is how the Foreign Arrangements Scheme operates. It is why the former coalition government established the scheme in 2020.

A major catalyst at the time was the Victorian Labor government's unilateral decision to sign up to the Belt and Road Initiative of the People's Republic of China. This exposed a serious problem: an Australian state government had entered into a significant BRI agreement, and the Commonwealth had limited ability to ensure the agreement was consistent with Australia's foreign policy.

The coalition fixed that. We established the Foreign Arrangements Scheme and, in April 2021, Victoria's BRI agreement was cancelled. Five years on, the operation of the scheme has proven its value.

By November 2024, more than 18,000 foreign arrangements had been notified, of which more than 14,000 were found to fall within the scheme. Due to the scheme, the Commonwealth gained visibility over foreign arrangements that it simply did not have previously, but experience in operating the scheme also helped identify areas for its improvement. To date, for example, the scheme has resulted in too much effort processing arrangements that pose little or no genuine risk to Australia.

Around 92 per cent of core arrangements and 75 per cent of non-core arrangements did not require complex assessment. In many cases these were routine arrangements—student credit transfers, sister city relationships or ordinary educational engagement. There is little national benefit in drowning universities, councils, state and territory governments and the Commonwealth in unnecessary paperwork about run of the mill routine arrangements.

That was one of the central findings of the Huxtable review, a statutory review into the scheme that concluded last year. The review found the scheme was effective but needed to be better targeted and less burdensome. This bill is the government's response to those findings.

Much of it is sensible, and thus the coalition will support the passage of this bill. The bill moves the decision-making framework from the narrower concept of Australia's foreign relations towards the broader national interest. It improves information sharing and gives the Foreign minister greater flexibility to manage risk through conditions.

It also seeks to cut unnecessary compliance by reducing repeat notifications and dealing more sensibly with minor variations and innocent administrative errors. These are worthwhile reforms. The coalition established this scheme.

We want it to continue working and to be improved so it is even more effective. If an arrangement poses little genuine risk to Australia, regulated entities should not be wasting time navigating unnecessary bureaucracy. But the reverse is also true.

Where an arrangement presents a real risk to Australia's national interest, the Commonwealth needs visibility of it and the power to act, and that is where experience has shown the government's proposed changes to be incomplete. There is one gap in particular which the coalition believes must be addressed, and that is in the area of researcher-to-researcher collaboration.

Under the scheme, a public university has obligations where it wishes to enter into an arrangement with a foreign entity. But if a researcher employed by that same university enters directly into a collaboration with a foreign researcher or institution and the university itself is not formally a party to the arrangement then that collaboration is not captured by the scheme.

Think about that in practice. Two arrangements could involve substantially the same research, the same sensitive technology and the same potential risk to Australia. One involves a university directly, while the other involves a researcher who belongs to the university.

One is visible to the Commonwealth, and the other is not simply because of how the arrangement is structured. My point is this: the national security risk does not disappear because the paperwork has a researcher's name on it instead of the employing university's. This is not theoretical.

Earlier this year, The Australian newspaper reported that researchers from Australian universities had collaborated with Iranian researchers on work involving unmanned drone technology. Those reports involved researchers associated with the University of Sydney, UNSW and Adelaide University. There has since been further scrutiny of Australian academic links with Iran, including an investigation by the University of Sydney into the travel and research links of one of its academics.

I do not intend to prejudice, or prejudge at least, every detail of those individual cases, but I note that questions remain about what particular work was undertaken and precisely what institutional arrangements may have applied. What matters is the question for the parliament to which these cases give rise—namely, does the bill before the House today capture comparable high-risk collaborations such as those between researchers?

The answer is no, and this is the gap that needs to be closed. We recognise that the Foreign Arrangements Scheme is not the only protection against foreign interference or inappropriate foreign involvement in Australian research, and nor should it be; there are other safeguards. The University Foreign Interference Task Force, UFIT, brings government and universities together to manage foreign interference risks.

Its guidelines encourage universities to undertake due diligence and maintain systems for disclosure and transparency. Australian sanctions law also has a role, and the Australian Research Council now conducts strengthened national security screening of ARC grant applications. Indeed, in May this year, the education minister refused funding for 13 ARC grant applications on those grounds.

This is a good thing. It shows that the Commonwealth already accepts the principle that sensitive research and foreign affiliations require scrutiny. But ARC screening protects just one stream of Australian grant funding; it is not a general safeguard for significant research collaborations occurring outside that system.

What happens when access to Australian research is provided through a direct researcher-to-researcher collaboration? What happens when a foreign institution or foreign actor funds that collaboration? We need confidence that foreign money cannot be used to buy access or to influence sensitive capability through Australian researchers without appropriate scrutiny.

UFIT has a role. Sanctions law has a role. ARC screening has a role.

But these measures do not fill the gaps in this legislation. Let me provide an example. In response to reports of Australian researchers' involvement with dual-use technology in Iran, the government had the education department write a series of warning letters to the relevant universities in March this year.

When it was later revealed that Sydney university had sent a staff member to Iran last year, in defiance of warnings, the course of action taken by the education department was to send yet another letter to reiterate the government's expectations. Strongly worded letters from ministers to universities and the issuance of guidelines are not a substitute for a statutory obligation.

The government has relied on letters and statements of expectation to universities to manage some of these issues, but they have not proven to be effective. That should tell us something. An expression of an expectation is not an obligation.

A letter from a minister is not a statutory notification requirement. The coalition created this scheme, and we continue to believe it is an important layer of Australia's national security architecture. To this end, I urge the Labor Party to work constructively with the coalition to ensure that the Australian government has the necessary powers to protect Australia's national interest.

While we acknowledge that there is more to be done outside of this scheme, the first step is getting this bill right. That is why the coalition is seeking to amend the bill. Our amendment is targeted.

It does not intend to capture routine academic engagement; nor does it discourage engagement. Indeed, international academic collaboration is important to Australian research, and it should continue. But technology developed for civilian purposes can have military applications, research can move across borders quickly and foreign governments understand the strategic value of gaining access to Australian science, technology and knowledge.

Our laws need to recognise that reality. Our amendment effectively requires public universities to notify the Commonwealth of significant research collaborations entered into by members of their academic or research staff with foreign researchers or foreign research institutions, regardless of whether the university itself is formally a party to the arrangement.

The obligation to notify the Commonwealth would sit with the university, not with individual researchers, and the rules would distinguish between routine academic engagement and collaborations that warrant scrutiny. That could include substantial or ongoing collaborations or access to non-public research or sensitive technology. It is pleasing to learn that many universities have made clear that they already have systems in place to identify and manage such collaborations.

This being the case, requiring notification of a defined class of significant collaborations should not impose an unreasonable additional burden on the university. The coalition created the Foreign Arrangements Scheme because the Commonwealth needed greater visibility over foreign arrangements. That principle remains sound.

We support streamlining this scheme, and we support strengthening it. It is for these reasons that the coalition will support this bill, but we will go one step further and ask the government to come with us. We will seek to strengthen the bill by expanding its scope to include researcher-to-researcher collaborations.

The DEPUTY SPEAKER ( Ms Claydon ): Has the shadow minister moved an amendment? Mr Ted O'Brien: No. I'll do that later.

Debate adjourned.