A review by former Finance Department secretary Rosemary Huxtable, tabled by Foreign Minister Penny Wong earlier this week, has rightfully confirmed that the Foreign Arrangements Scheme remains a vital pillar of Australia’s national resilience strategy, subject to targeted refinement to reduce red tape and sharpen its focus on high-risk arrangements.

In accepting all 23 recommendations, Wong emphasised that ‘it is essential to ensure that agreements with foreign countries are consistent with Australia’s national interests.’

This practical commitment to reform reaffirmed the scheme’s value. It also backed in the central role of the foreign minister and Department of Foreign Affairs and Trade in ensuring that national security and sovereignty come before individual economic interests in dealings with foreign entities.

First legislated in 2020, the scheme was designed to close a gaping vulnerability that foreign states were only too willing to exploit: a lack of cohesion between the federal government and subnational governments and institutions.

In 2018, the Australian government was rocked when the Victorian state government signed onto China’s Belt and Road Initiative. Coming off the back of the Northern Territory’s lease of Port of Darwin in 2015, it was clear that malign states were taking advantage of vulnerabilities in Australia’s federal system. This resulted in bipartisan legislation to ensure the foreign minister had both awareness of and, where necessary, the power to veto subnational agreements between foreign entities and our states and universities.

The timing of the review and the government’s response could not be more appropriate. It follows high-profile announcements, including the estimate by the Australian Institute of Criminology and the Australian Security Intelligence Organisation that espionage is costing the Australian economy more than $12 billion a year, and the Australian Federal Police’s arrest of a Chinese national on foreign interference charges.

This month also sees the expansion of ASPI’s China Defence Universities Tracker, first launched in 2019, which details how Chinese universities are embedded in Beijing’s military-civil fusion strategy. Together, the review and the tracker highlight why vigilance in international research and education partnerships remains essential.

Australia remains a target for malign states who see our openness not as a strength, but as an opportunity to exploit. Espionage, among other consequences, drains intellectual property, erodes trust in institutions and imposes heavy burdens on government and business alike. The Foreign Arrangements Scheme was never a panacea, but rather one of the critical tools designed to disrupt those activities before they could take hold.

Huxtable’s review highlights three enduring truths.

First, resilience is an ongoing process. The scheme worked as a first iteration, but it was never the final word. Like cybersecurity or counterterrorism, countering espionage, foreign interference and malign foreign influence requires constant adaptation. Our strategic adversaries probe for weaknesses. We need to refine our safeguards in turn.

Second, focus matters, not just to reduce red tape but for public messaging and increased threat awareness. Some provisions of the scheme have proven too broad, sweeping in cultural, sporting and academic exchanges with little to no security or sovereignty relevance. Universities, in particular, were absorbing scarce resources to notify low-risk agreements rather than concentrating on genuinely high-risk cases. Apart from the regulatory costs, the risk is a tick-a-box compliance culture in which all cases are treated the same and arrangements that represent a genuine threat to the national interest are missed.

The reforms—exempting Five Eyes partnerships (Canada, Britain, the United States and New Zealand) from notification, clarifying definitions and easing the treatment of routine academic arrangements—will make the scheme smarter, not weaker. By reducing noise from low-risk cases and placing trust where it is deserved, the scheme can better concentrate on the engagements that carry most risk. It recognises that not every foreign arrangement is a security risk and not every university exchange program warrants a compliance burden. This is smart security, strengthening effectiveness while cutting unnecessary drag.

Third, bipartisanship is itself a form of resilience. Foreign interference thrives on division. The scheme passed with bipartisan support in 2020, and that consensus needs to endure. The opposition’s home affairs representative, Andrew Hastie, has welcomed the review. Such sustained political unity will send an unmistakable signal to adversaries that attempts to exploit partisan or federal divides will fail.

The combination of regular review, public transparency and bipartisanship (at least on principles, if not every aspect of policy), helps maximise both the deterrent effect and credibility of the scheme. It’s likely that the scheme has resulted in foreign states proposing fewer high-risk subnational agreements to begin with. A strengthened scheme will only continue to do so.

The government’s acceptance of the 23 recommendations and parliament’s speedy implementation will help transform the scheme from a broad, one-size-fits-all framework into a targeted and adaptive tool. It will continue to embed the national interest—including economic security—into decision-making, while prioritising high-risk arrangements, informed by foreign policy and intelligence assessments.

For universities and councils, this should mean clarity and relief: more time spent pursuing legitimate partnerships, less time filling out paperwork. But it should also involve an even higher expectation on the sector to identify and reject high-risk arrangements, knowing the foreign minister will step in where needed as a final check, not the single gatekeeper.

For the public, the review and recommendations reinforce that sovereignty and security are being prioritised over short-term convenience. And for foreign partners, it sends a balanced message: Australia welcomes collaboration, but only where it aligns with our national interest and values.

Above all, the review is a reminder that resilience is not static. As adversary tactics evolve, we need to refine the safeguards that protect us from espionage, foreign interference and malign influence.

Australia is not unique in facing these challenges—adversaries exploit subnational diplomacy in federal systems around the world—but we are unusual in codifying a clear national safeguard. The Five-Eyes exemption should be leveraged for greater cohesion on collective principles and policies. Huxtable’s review, the government’s response and DFAT’s implementation work together to show the scheme is effective and can work even better to increase the confidence and safety of Australians while engaging the world.