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Wednesday, 22 May 1985
Page: 2886

Mr HAWKE (Prime Minister) —by leave-


On 17 May 1983 the Government appointed a Royal Commission, conducted by Mr Justice Hope, to undertake a major review of Australia's security and intelligence agencies. Having reported to the Government on the Combe-Ivanov affair in December 1983 and the Sheraton Hotel incident in February 1984, the Royal Commission presented its final reports to the Government in December 1984. I now table certain of those reports in edited form.

Motion (by Mr Young)-by leave-agreed to:

That this House, in accordance with the provisions of the Parliamentary Papers Act 1908, authorises the publication of the following reports of the Royal Commission on Australia's Security and Intelligence Agencies:

General Report

Australian Security Intelligence Organisation

Office of National Assessments and Joint Intelligence Organisation.

Mr HAWKE —Before commenting on the reports, I should like, on behalf of the Government, to express my sincere thanks to Mr Justice Hope for having completed with distinction a very difficult task. His Honour is of course, no stranger to the intelligence and security community having previously inquired into and reported on it in a series of major reports in 1976 and 1977. Those reports led, amongst other things, to the enactment of a new Act governing the Australian Security Intelligence Organisation, a Security Appeals Tribunal, the establishment by legislation of the Office of National Assessments, the public acknowledgement of the Australian Secret Intelligence Service and Defence Signals Directorate, and the creation of a Cabinet committee and supporting committee of departmental secretaries to oversight the activities of the intelligence community. I should also like to thank the New South Wales Government for releasing Mr Justice Hope from his duties as a Judge of Appeal of the Supreme Court of New South Wales.


On 21 December 1984 the Royal Commission presented the Government with a general report, individual reports on the Australian Security Intelligence Organisation-ASIO, the Australian Secret Intelligence Service-ASIS, and the Defence Signals Directorate-DSD, and a combined report on the Office of National Assessments-ONA-and the Joint Intelligence Organisation- JIO.

While the nature of the subject matter of these reports rules out, on grounds of national security, publication of some material, the Government has decided to publish as much as is possible of the reports within these constraints. It has taken account of the views about possible publication expressed by His Honour in each of the reports, and has consulted with him further in reaching a decision on publication.

As suggested by Mr Justice Hope, the Government is tabling edited versions of the general, ASIO, and ONA-JIO reports. As also recommended by His Honour, the ASIS and DSD reports are not being published, but some general comments about the legality, propriety, effectiveness and efficiency of each are to be found in the published general report and I will have something further to say about each in this statement.

I mention also that in accordance with established practice on intelligence and security matters, the Leader of the Opposition (Mr Peacock) has been provided with copies of unexpurgated reports.

The Government in this statement responds in broad terms to the principal recommendations raised in the published reports. It has not yet reached a final position on all of the hundreds of recommendations and suggestions made: Many raise complex issues; many are intertwined; many, if adopted, will require the introduction or amendment of legislation. Detailed examination of all of the recommendations has commenced and will continue over future months.


Evaluation of the Performance of the Agencies

Mr Justice Hope has reiterated his views, formed during his earlier review, that Australia needs intelligence of quality, timeliness and relevance, and for this purpose requires a highly professional system of intelligence and security services (General, 2.43). He has concluded that governments should continue to ensure that the intelligence community is able to fulfil its important role in helping to advise on and protect Australia's national interests (General, 2.44). This Government endorses those views.

The inquiry by Mr Justice Hope has been a most comprehensive review of Australia's security and intelligence agencies. It has also examined a number of complaints. It has exposed deficiencies in some agencies. But while noting that there will always be room for improvement, His Honour concludes that the agencies are generally performing effectively and efficiently. He finds that:

In ASIO, much work has been done, and is continuing, to restructure and revitalise the Organisation, making it a service more responsive to predetermined policies (General, 2.21). ASIO has been concerned to ensure that its operations and actions are within its charter and has been substantially successful in this (General, 2.5). Its record as to legality and propriety is good (General, 2.6). However, His Honour has pointed to a number of areas, particularly in management and administration, where improvement in performance is necessary.

ONA, although a relatively small body, has established its independence and authority by the quality of the work it produces, and is held in high regard (General, 2.34, 2.36). Its national assessments have been of high quality and it also produces valuable reports on matters of current significance (General, 2.36).

JIO is a competent and professional agency (ONA/JIO, 4.9). It fulfils an important role in providing the defence organisation and other areas of government with a range of data and assessed intelligence on international, military and defence related developments (ONA/JIO, 2.18). It handles a vast amount of intelligence, and issues assessments and reports, many of which are of a high standard. Its product is well regarded by those who receive it (General, 2.40).

ASIS has achieved success over the last decade in organising and reorganising to achieve its goals (General, 2.26). Its effectiveness and efficiency and its contribution to Australia's intelligence will continue to grow as a consequence of the closer relationship with other areas of government which it now has (General, 2.28). The Sheraton Hotel incident was not representative of the quality or professionalism exhibited by ASIS in performing its principal tasks (General, 2.28), and firm and clear steps have been taken to ensure that there will be no repetition of such an incident (General, 2.15).

Just to expand on this point, as Mr Justice Hope suggests the Government might, the report on ASIS recommends that ASIS's directive be amended to exclude ASIS from carrying out covert action in the form of either special operations or special political action, and from undertaking training for such action. Special operations can be defined roughly as unorthodox, possibly paramilitary, activity in foreign countries designed to be used in case of war or some other crisis. Special political action is clandestine action against another country designed to further the foreign policy aims of a government, also in time of war or crisis. The development in ASIS of such a covert action capability had been accorded a priority well below that given to the development of ASIS's main intelligence gathering function and had in practice consumed only a very small proportion of the organisation's manpower and resources. Development of this capability as a contingency planning measure had not proceeded very far at the time of the Sheraton incident, and-apart from such training-any action at all of this nature, either special operations or special political action, would have required prior ministerial approval.

The report also recommends that the use by ASIS of weapons be terminated and that ASIS's stocks of weapons, including explosives, be disposed of. The Government has accepted and acted upon these recommendations. ASIS will not hold weapons and will not maintain a capability for special operations or special political action.

Returning to the evaluation of agencies' performance, Mr Justice Hope finds that DSD is impressive (General, 2.30). Its activities have expanded since 1974, and its skills and technology have thus far substantially kept up with this expansion (General, 2.32). It complies with the obligations which law imposes upon it (General, 2.17).

The Government has accepted and welcomes these generally reassuring findings in relation to the agencies. The reports naturally contain recommendations aimed at further improving the performance of the agencies and at ensuring that they continue to act with legality and propriety. Other recommendations are directed to making the agencies more accountable. The Government endorses most of these and is pleased to note the ready support of the agencies for the additional measures I will now outline.

General Oversight and Accountability

Principal responsibility for oversight and accountability will, naturally, continue to rest with Ministers. The Prime Minister, the Minister for Foreign Affairs, the Minister for Defence, and the Attorney-General, each of whom has direct ministerial responsibility for one or more of the agencies, together with the Special Minister of State and the Minister for Resources and Energy, constitute the Security Committee of Cabinet. The Security Committee was established in recognition that there should be a small number of Ministers collectively tasked with developing policies for, and oversighting the performance of, the security and intelligence community. In the course of the Royal Commission the Committee, deliberately and properly, refrained from taking initiatives which would in any way have cut across His Honour's inquiry or anticipated his findings. Now, with the material contained in comprehensive reports before it and with other matters held in abeyance for the period of the Royal Commission, the Committee confronts a significant and challenging work load.

The Government has responded with a number of initiatives. It has instituted a regular program of meetings for the Security Committee which will bring to the security and intelligence community a more rigorous oversight than ever before in this country. The Government believes that the agencies must benefit from having the clear guidance and directions on government policy which will emanate from these regular programmed meetings of the Committee.

To ensure that material comes before the Committee in a regular and orderly fashion, a suitably staffed, full time secretariat will be established in my Department. To strengthen its ability to advise the Security Committee on security matters, the Secretaries Committee on Intelligence and Security-SCIS-has been expanded to include the secretaries to the Attorney-General's Department and the Department of the Special Minister of State. The Government has also affirmed the mandate of the SCIS, its individual members, and other relevant agency heads for ensuring that the Committee of Ministers is kept regularly and fully informed of all relevant matters.

Mr Justice Hope has made a number of recommendations also aimed at assisting Ministers in the discharge of these functions. I now wish to set out the Government's reaction to these recommendations. As the principal recommendation in the general report, Mr Justice Hope recommends that there be created an Office of Inspector-General of Intelligence and Security which would perform the role of independent watchdog, assisting Ministers in looking after the public interest in the proper functioning of the security and intelligence agencies.

The Government accepts the recommendation, believing the proposed Office-covering as it does most of the functions of the Security Commissioner, including in particular the audit function, proposed in the Australian Labor Party submission to Mr Justice Hope-to be a valuable addition to the existing machinery. While the details will need to be finalised in legislation, the Government agrees with the thrust of what is proposed for the Office in the general report (3.19.26) and ASIO report (16.76-102). Basically, the Office will comprise an Inspector-General of appropriate standing, appointed after consultation with the Leader of the Opposition, and a small staff. For administrative purposes, the office will be attached to my portfolio. In relation to ASIO, the Inspector-General will be able to act on his or her own initiative, or at the request of the Attorney-General, or in reponse to a complaint, and will report his or her findings to the Attorney. The Inspector-General's functions and powers will also include:

inquiring into and reporting to the Attorney-General on ASIO's compliance with the law and propriety; and, if required by the Attorney-General, on the appropriateness and effectiveness of particular internal procedures;

having full access to ASIO's files and other materials and power to require answers to questions; and

reviewing ASIO's performance in opening, maintaining and culling files.

In respect of the other agencies, the Inspector-General's function will include:

checking, as occasion requires, the legality and propriety of the activities of ASIS and DSD

investigating and reporting upon matters referred by the Prime Minister and the Minister for Defence in respect of ONA and JIO respectively; and

investigating the appropriateness and effectiveness of particular internal procedures of any agency if so required by the relevant Minister.

The Inspector-General will produce an annual report which will be made available to the Parliament with such editing only as would be consistent with national security, privacy and other public interest considerations, and in an unexpurgated form to the Leader of the Opposition.

Parliamentary Committee

Mr Justice Hope has also given consideration to the need for a parliamentary committee and has concluded that it is neither necessary nor appropriate that a special parliamentary committee be established to improve accountability (General, 3.28, ASIO, 17.34). He does, however, emphasise that this is ultimately a matter for Parliament to decide.

The Government has given a great deal of consideration to the question. It has weighed His Honour's comments about the adequacy of existing oversight and accountability measures-particularly when supplemented by the new office of Inspector-General. The Government accepts that these measures will be improved by the creation of the Office of Inspector-General. Nevertheless, it believes a further improvement can be obtained by directly involving the Parliament-on both sides and in both Houses-in imposing the discipline of an external scrutiny of the intelligence and security agencies quite independent of the Executive. While the Government has been conscious also of the need to carefully protect intelligence and security information, it believes that appropriate arrangements can be made to ensure that a small but informed parliamentary committee would operate effectively in the public interest. It notes, in this regard, relevant overseas experience of parliamentary scrutiny of intelligence and security agencies.

Although the Government will be consulting on the details of the committee's operation, it would propose to establish the committee by amendment to the ASIO Act, to oversight prescribed activities of ASIO relating to domestic security. The committee would not act as a grievance mechanism-that role being given to the proposed Inspector-General-and appropriate safeguards for national security classified material would, of course, have to apply.

In relation to ASIO this joint parliamentary committee would supplement, not replace, the arrangements already in place for official briefings on national intelligence and security matters, on a personal and confidential basis, to nominated members of the Opposition, an approach which Mr Justice Hope has endorsed.

Impact of Archives Act

There is one final matter affecting the general accountability of the security and intelligence agencies which requires comment. In June 1984, this Government brought into operation the Archives Act to govern public access to Commonwealth records. Mr Justice Hope, in his general report, has made recommendations relating to the impact of the Archives Act on the intelligence and security agencies. His Honour has raised a concern that the 30-year time limit which is applied to records under the Archives Act may be insufficient for many intelligence community records because release even after that lapse of time could still reveal sources, modus operandi and other security-sensitive information. His recommendation is that consideration be given to legislative amendments to remove operational records of security and intelligence agencies from the mandatory requirements of handover to Archives and public access after 30 years, leaving discretion with agency heads to hand over records when appropriate.

The intelligence community has strongly supported Mr Justice Hope's recommendations and has raised with the Government its concerns about the adequacy of, and feasibility of applying, the safeguards in the Act against compromising the large volume of sensitive documents held, many of which have been provided in confidence by overseas sources. At the same time, the community acknowledges both that its records contain documents of major historical significance, and the Government's commitment to ensuring that these records are preserved and, where possible, made available for public access.

The Government takes very seriously its duty to protect the confidentiality of intelligence, its sources and the means by which it is obtained. However, it believes that safeguards in the Archives Act have been appropriately designed and have not been shown to the deficient. The provisions of section 29 of the Archives Act were developed to have the effect of exempting the intelligence agencies from the 'mandatory transfer' provision referred to by His Honour (General); and beyond this, in the event of a request for access, the Act provides a range of exemption provisions and for conclusive ministerial certificates to protect security sensitive information. The Government will ensure, however, that the intelligence community concerns and experiences are specifically addressed in the review of the Archives Act which is scheduled for 1987.


Turning now to the report on ASIO, I primarily wish to address four main groups of recommendations: Those directed at strengthening ministerial control; those relating to amendment of the ASIO Act to redefine ASIO's jurisdiction; those affecting the role of the Security Appeals Tribunal; and those proposing the gathering-together of a range of protective security measures under the Special Minister of State.

Strengthening of Ministerial Control

Mr Justice Hope has recommended that the Attorney-General's control over ASIO be significantly expanded and his Department be given a larger role in support of him. He has proposed that the Director-General of Security, in the performance of his functions, be subject to the direction of the Attorney-General, except as to the nature of the advice he should give (ASIO, 16.46). The proposal includes appropriate control mechanisms. The Government endorses his recommendations.

His Honour has also recommended that the Attorney-General be given power to issue guidelines relating to a number of areas of ASIO activity. The guidelines will have the status of administrative directions; where appropriate, will be tabled in Parliament; and will be given to the Leader of the Opposition. The areas to be covered will include intelligence collection, targeting, review of file holdings, and the extent of ASIO involvement in investigating activities which might involve the hindering of the Defence Force function (ASIO, 16.52). The Government endorses these recommendations, and has also decided that the Security Committee will approve the guidelines to be issued by the Attorney-General.

Amendments to ASIO Act

His Honour has recommended significant changes to the definition of 'security' contained in the ASIO Act. The effect of the changes proposed is to allow ASIO's functions and activities to be more carefully defined and limited (ASIO, Chapters 3, 4, 5).

The Government accepts the main thrust of these recommendations. I do not intend repeating all of the details-I invite honourable members to give them careful study in the lead up to the future introduction of amendments to the ASIO Act. I will comment that the Government is particularly pleased that the general direction of the changes would:

give full recognition to the policy that ASIO should not be concerned with the activities of persons which involve only lawful protest or dissent (ASIO, 4.91 (h));

see the term 'subversion' deleted from the definition of 'security' (ASIO, 5.54 (b)) in favour of a concept of 'politically motivated violence' which covers a much narrower definition of the contentious notion of 'subversion';

make separate provision dealing with activities directed to promoting violence between different communal groups (ASIO, 4.91 (f)); and

delete the term 'active measures of foreign intervention' from the definition of 'security' and substitute a more tightly defined definition of 'acts of foreign interference' along the lines suggested by His Honour. Concern has been expressed in some quarters about the ambiguities and potential dangers inherent in the term 'agent of influence'. By changing the emphasis in the concept of 'foreign interference' from activities designed to advance the interests of a foreign country to activities that will have a result detrimental for Australia, this recommendation should allay those concerns.

The Government also accepts Mr Justice Hope's recommendation that there should be separate provision dealing with activities directed to obstructing, hindering or interfering with the performance by the Defence Force of its activities (ASIO, 4.91 (d)). The Government proposes to add to this provision as proposed by Mr Justice Hope a further requirement that the acts concerned be not only intended to, but likely to, obstruct, hinder or interfere. I reiterate that these provisions will be subject to the policy on lawful dissent.

Another significant amendment of the ASIO Act would result from Mr Justice Hope's proposal that ASIO, under warrant, collect foreign intelligence in Australia-that is, information concerning the capabilities, policies and activities of foreign powers or bodies (ASIO, 6.82, 6.84, 6.87). His Honour concludes, and the Government agrees, that it would be highly advantageous for Australia to provide for the collection of such intelligence (ASIO, 6.80).

The Government also agrees that if this is to be done it must be regulated by legislation, as is the case in the United States and Canada and as is being introduced in the United Kingdom, and any such legislation would need to ensure, as His Honour recognises, that no Australian person or corporation would be the target of operations involving such collection (ASIO, 6.84). We will be giving further consideration to the complex issues raised by this recommendation.

Security Appeals Tribunal

Mr Justice Hope recommends a number of procedural and jurisdictional changes for the Security Appeals Tribunal. These stem from the requirement to report on whether there is adequate provision for effective redress for persons who may be unjustifiably disadvantaged by actions of the agencies. With an exception which I will now address, these recommendations will be the subject of a further submission by the Attorney-General. As already mentioned, the Inspector-General of Intelligence and Security will be empowered, as part of improved redress procedures, to investigate complaints by individuals.

Beyond this, Mr Justice Hope has recommended that in any case where a report by ASIO may result in action adverse to the interests of an individual and where the individual does not already have a right to review of that report, the Attorney-General may refer the matter to the Security Appeals Tribunal for advice on the appropriate procedures to be followed by the Government having regard to the interests of the person who is exposed to possible prejudice (ASIO, 17.58). It is suggested that the Tribunal could be asked to consider whether the person should be given notice and an opportunity of testing the ASIO information on which the Government is proposing to act or has taken interim action (ASIO, 17.58).

The Government accepts the desirability of being able to draw on independent advice in the circumstances outlined. However, it is concerned that the recommendation may place the SAT, a quasi-judicial body, in the position of giving advice to government on aspects of the handling of a developing security matter. The Government intends, therefore, to incorporate this advisory role in the functions of the proposed Inspector-General of Intelligence and Security.

Protective Security

Chapters 9 to 12 of the ASIO report deal with protective security matters. Key recommendations set out at chapter 12, paragraphs 77 to 79, are that the Special Minister of State be given responsibility for protective security policy and co-ordination, and that a high level committee be convened by the Department of the Special Minister of State to co-ordinate protective security measures, with representation from ASIO and other agencies with specialist security expertise, and from the major user departments.

The Government recognises that under existing arrangements responsibility for protective security policy is vested in a number of departments and agencies. There is, therefore, some attraction to the idea of bringing protective security policy under one department and developing the machinery for co-ordination. Such a rationalisation inevitably carries with it resource and cost implications. Accordingly, the Government is carefully examining whether the benefits of centralisation outweigh these costs.



After making his favourable findings about ONA, to which I referred earlier and which the Government endorses, Mr Justice Hope went on to suggest that there was scope for ONA more actively to encourage departments to recognise and use its analytical skills and to co-operate with it in its work (ONA/JIO, 3.163). To this end he suggested the establishment of a National Intelligence Committee (Gen., 2.38, ONA/JIO, 3.169-170, 5.47) chaired by ONA and including senior representatives of policy departments and JIO, with representatives of the intelligence collection agencies present as observers. The Government agrees with His Honour and accordingly accepts the recommendations at paragraphs 3. 169 (a) and (b) of the report on ONA and JIO. Appropriate administrative action is being taken to give effect to that decision.

Mr Justice Hope suggests four functions for the NIC, involving it in:

the development of ONA's work program;

monitoring ONA's product;

advising ONA on intelligence needs and priorities; and

considering all ONA's assessments.

The Government agrees with the first three suggested functions for the NIC. Policy departments are already drawn into these things in a variety of ways, but it would be a useful improvement to have them done more formally, and in a multilateral way, in an NIC. The Government does not accept that the NIC should be given the fourth recommended function-that of considering all ONA's assessments. In the Government's view this would result in a most unwieldy system, would greatly reduce ONA's output, would make very difficult the preservation of ONA's independence and could quite easily lead to the introduction of departmental policy preference into ONA's assessments.


As with his recommendations on ONA, Mr Justice Hope's main recommendations in respect of JIO are directed towards improving the process of consultation between JIO and its main customers. He also makes suggestions for improving JIO's organisation, manning, training and some aspects of its co-ordination and forward planning. The Minister for Defence (Mr Beazley) will be advising the Government on what action to take in response to the detailed recommendations and suggestions on the JIO.

DSD Report

As I have said, the DSD report is not being published but it is appropriate at this stage to make some comment about the DSD charter. Following consideration of the reports of the earlier Royal Commission on Australia's Security and Intelligence, the then Prime Minister in 1977 broadly outlined the role and functions of DSD.

Mr Justice Hope has now recommended that the Government consider making public the DSD directive, with amendments where necessary for security reasons. This Government has issued DSD with a new directive which differs only slightly, and not in matters of substance, from the previous directive under which DSD operated. We agree with Mr Justice Hope that publication of the directive will allow the Australian public to obtain a clearer appreciation of DSD's role and functions and may allay misconceptions about the organisation. I seek leave to incorporate in Hansard the new DSD directive.

Mr SPEAKER —Whilst this document is outside the usual guidelines for incorporation in Hansard, having regard to the nature of the statement, if there is no objection, I will permit its incorporation.

Leave granted.

The document read as follows-


1. The Commonwealth Government requires the maintenance of a capability to collect, produce and disseminate foreign signal intelligence and to advise the Government on all matters pertaining to the security of signal communications and related equipments.

2. The capability will be located in:

(a) the organisation in the Department of Defence known as the 'Defence Signals Directorate' (DSD); and

(b) specialist units of the Defence Force.


3. In respect of signal intelligence, the functions of DSD and the specialist units of the Defence Force referred to in paragraph 2 above shall be:

(a) to develop and maintain a capability to provide signal intelligence in support of the Defence Force; and

(b) to collect, produce and disseminate foreign signal intelligence to meet the national requirements of the Commonwealth Government.

4. In respect of communications security, the functions of DSD shall be:

(a) to provide materials, advice and assistance to Commonwealth Government departments and authorities and the Defence Force on matters relevant to the security of their communications and electronic and related activities; and

(b) through the Secretary to the Department of Defence, to keep the Secretaries' Committee on Intelligence and Security generally informed on the state of communications security.

Organisational Principles

5. Policy control and managerial oversight over the national intelligence community, external and internal, is exercised by the Security Committee of Cabinet in respect of targets, priorities, activities, organisational requirements, broad allocation of resources, performance and co-ordination and inter-relationships of the various agencies. In the performance of its functions DSD, as a component of the national intelligence community, shall accept the guidance on targets and priorities issued from time to time by the Security Committee of Cabinet.

6. The Australian capability in signal intelligence shall be maintained in DSD and the Defence Force for national purposes generally. DSD shall be the national communications security advisory authority and as such shall maintain the expertise required to carry out those functions detailed in paragraph 4 above.

7. DSD shall be an outrider organisation in the Department of Defence. The Director, DSD shall control DSD and shall be responsible to the Secretary to the Department of Defence.

8. Specialist units of the Defence Force, and Defence Force personnel engaged in signal intelligence and communications security tasks, shall be subject to the command arrangements made by or under the authority of the Chief of the Defence Force. Members of the Defence Force may be loaned or seconded for service with DSD.

Operating Guidelines

9. DSD and units of the Defence Force engaged in signal intelligence and communications security functions shall operate in conformity with Australian law.

10. DSD shall maintain direct contact with appropriate Commonwealth Government departments and authorities and the Defence Force as regards signal intelligence and communications security matters.

11. DSD shall be the Australian national authority on signal intelligence and communications security matters. DSD shall conduct liaison on signal intelligence and communications security matters on behalf of the Australian Government as appropriate with counterpart agencies or authorities in other countries and shall maintain overseas technical representation as is necessary.

12. The Director, DSD shall furnish to the Secretary to the Department of Defence and to the Chief of the Defence Force an Annual Report which shall include an account of the performance of DSD in relation to the functions stated in paragraphs 3 and 4 above.

Mr HAWKE —I come to my concluding remarks. As I have indicated in this statement, the Government has accepted and welcomed His Honour's findings and, as is quite clear, has accepted most of his principal recommendations. More work remains to be done in responding to his other recommendations and in the area of implementation. The Government will ensure that there is no delay to this work and that its results will be made known as appropriate.

When all is finished, I have no doubt that Australia's intelligence and security services will be more efficient and effective than they now are, that they will be run with even greater regard for legality and propriety and that their accountability and oversight will be further strengthened. These will be worthwhile gains to the Australian people, to the Australian government and to the Australian security and intelligence community itself.