Almost $9 billion cybersecurity and intelligence package to be unveiled in federal budget

An almost $9 billion package to bolster Australia's cybersecurity and intelligence capabilities will be unveiled in tonight's federal budget, as concerns grow over threats from potential adversaries across the globe.

The ABC has learned the massive, five-year investment is being made to deal with changed strategic circumstances in the Indo-Pacific region, characterised by rapid military expansion, coercive behaviour and increasing cyber attacks.

On Monday night, Prime Minister Scott Morrison foreshadowed the multi-billion-dollar spending when he announced a new cyber and critical technology centre would be established within the nation's peak intelligence assessment agency.

Speaking at a function to mark the 70th anniversary of the ANZUS Alliance, Mr Morrison revealed that the centre would be set up within the Office of National Assessments and deploy cutting-edge technology to protect Australia's security.

"With challenging and changing geopolitical realities — where technological advantage for our intelligence agencies is more important than ever — Australia is, as always, stepping up to do more," Mr Morrison told an audience of diplomats, intelligence chiefs and defence companies.

Last week, Defence Minister Peter Dutton warned that China's cyberwarfare capabilities now had the capacity to mount "an unprecedented digital onslaught", saying Beijing's online weaponry had grown in parallel with its military build-up.

Government sources familiar with tonight's budget cybersecurity and intelligence package say it will help Australia "keep pace with the growing capabilities of potential adversaries".

One official — who was not authorised to comment publicly — said the announcement would "bolster Australia's resilience, bring us into line with international best practice and also enhance our ability to contribute to security and stability in our region".

Inside the government, there has been speculation and debate over whether some other, big-spending controversial military projects could be reduced in scope and size to help fund the large cybersecurity and intelligence package.

Government relaxes procurement rules

Ahead of the budget, the government has announced changes aimed at making it easier for small and medium contractors to win infrastructure, defence and other government procurement contracts.

Under the update to Commonwealth Procurement Rules — to come into effect from July — the threshold that small and medium-sized enterprises (SMEs) can be directly engaged for defence projects will rise from $200,000 to $500,000.

"These reforms are game-changers that will remove perceived barriers that may have discouraged some SMEs from participating in particular tenders, particularly where they think the cost of entry is too high," Finance Minister Simon Birmingham said.

Defence industry figures have privately raised alarm at the idea, saying it could encourage corruption in military projects, a "risk" a senior government figure conceded must be "balanced".

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