The Turnbull Government will undertake the most significant reform of Australia’s national intelligence and domestic security arrangements in more than 40 years.

The reforms will restructure and strengthen Australia’s Intelligence Community, establish a Home Affairs portfolio and enhance the Attorney-General’s oversight of Australia’s intelligence, security and law enforcement agencies.

Australia faces an increasingly complex security environment, evolving threats from terrorism and organised crime, and the development of new and emerging technologies, including encryption.

In view of these developments, the Prime Minister announced a review of Australia’s Intelligence Community last year.

Mr Michael L’Estrange and Mr Stephen Merchant, and their adviser, Sir Iain Lobban, have finalised their report to Government. We thank them for their thorough and ground-breaking work.

The review concluded that Australia’s intelligence agencies are highly capable and staffed by skilled officers. It also made many important recommendations to transform these agencies into a world-class intelligence community.

The review highlighted how changing security threats and technologies are driving the need for closer cooperation between our domestic security and law enforcement agencies.

For over a decade, successive Governments have responded to worsening security trends with ad hoc arrangements to strengthen coordination and cooperation between Australia’s intelligence, security and law enforcement agencies.

These arrangements have been highly effective. Intelligence and law enforcement agencies have successfully interdicted 12 imminent terrorist attacks since September 2014. Operation Sovereign Borders, has also prevented successful people smuggling ventures for nearly three years.

However, the Government believes that the evolving and complex threats to Australia’s security require more enduring and better integrated intelligence and domestic security arrangements.

We have accepted the recommendations of the Australian Intelligence Community review as a sound basis to reform Australia’s intelligence arrangements.

The Government will establish an Office of National Intelligence, headed by a Director-General, and transform the Australian Signals Directorate into a statutory agency within the Defence portfolio.

The Government will also establish a Home Affairs portfolio of immigration, border protection and domestic security and law enforcement agencies.

The new Home Affairs portfolio will be similar to the Home Office of the United Kingdom: a central department providing strategic planning, coordination and other support to a ‘federation’ of independent security and law enforcement agencies including the Australian Security Intelligence Organisation, the Australian Federal Police, the Australian Border Force and the Australian Criminal Intelligence Commission.

These arrangements will preserve the operational focus and strengths of frontline agencies engaged in the fight against terrorism, organised crime and other domestic threats.

In view of these significant reforms, the Government will also strengthen the Attorney-General’s oversight of Australia’s intelligence community and the agencies in the Home Affairs portfolio.

Strong oversight and accountability is important to give the public confidence that our agencies not only safeguard our nation’s security, but do so respecting the rights and liberties of all Australians.

The Attorney-General will continue to be the issuer of warrants under the ASIO Act, and Ministerial Authorisations under the Intelligence Services Act and will continue to administer the Criminal Code Act 1995 and the Crimes Act 1914.

The Attorney-General’s portfolio will incorporate the Inspector-General of Intelligence and Security and the Independent National Security Legislation Monitor. The Government will also consider measures to strengthen the operation of both roles.

In addition, the Attorney-General’s portfolio will house the Commonwealth Ombudsman, which will remain an independent statutory body.

These reforms are significant and complex; they will take time to fully implement.

Planning to implement the changes to the Australian Intelligence Community, the establishment of the Home Affairs portfolio and the strengthening of the Attorney-General’s portfolio will be undertaken within the Department of the Prime Minister and Cabinet.

The Attorney-General, the Minister for Immigration and Border Protection as Minister-designate for Home Affairs, and the Minister for Justice will work with the Department of the Prime Minister and Cabinet to develop these plans with a view to their implementation from early 2018.

These reforms are driven by serious threats to Australia’s security and the Government’s determination to keep Australians safe and secure.

They will complement work underway to implement the Government’s 2016 Defence White Paper, including investments in new combat capability for the Australian Defence Force.

The Government will also present a Foreign Policy White Paper later this year.