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Malcolm Turnbull said his government’s laws had failed on their promise and needed to be overhauled.Credit:Alex Ellinghausen

Although his government introduced the laws,Turnbull last year said the laws had failed to deliver on their promise because they were “hoovering up a lot of information of marginal utility” and being implemented in a “box-ticking” fashion.

In a bipartisan report tabled in parliament on Wednesday,the parliamentary joint committee on intelligence and security (PJCIS) sharply criticised the scheme for having “significant flaws in its design and implementation”,attracting few registrations and producing little compliance and enforcement activity.

“In essence the scheme has failed to achieve its intended purpose with little of consequence apparent,” the committee found.

“Enforcement activity has focused almost exclusively on China with little success,while neglecting any material focus on other countries of significant concern (where there are no or very limited registrations).

“These include authoritarian nations like Russia and Iran which engage in malevolent foreign influence,as well as nations with which Australia has friendly and positive relations,such as India,which engage in foreign influence operations that should be transparently declared.”

Parliamentpassed the scheme following revelations that then-Labor senator Sam Dastyari had contradicted Labor’s policy on the South China Sea while seeking to secure donations from Chinese billionaire Huang Xiangmo.

While applauded by democratic countries such as the United States,the scheme contributed to the souring of relations between Australia and China,which felt targeted by the new regime.

The committee found that given the scheme’s “significant flaws”,it would require “substantial reform if it is to meet its original intent and justify the compliance burden and resources required to administer it”.

“Much of the evidence provided to the Committee in this review has argued that the Scheme’s operation has been constrained,its effectiveness has been limited,and its implications are inhibited transparency outcomes despite a high regulatory compliance burden,” the committee found.

Turnbull said last year that it was absurd that former prime minister Kevin Rudd was required to declare his interviews with the BBC while no representatives of the Chinese Communist Party’s United Front Work Department had registered their activities.

Among 14 recommendations for reform,the committee called for the legislation to be updated to allow the secretary of the Attorney-General’s Department to register individuals who should be listed under the scheme but had not done so themselves.

The committee also called for the definition of “foreign principal” to be expanded to capture a wider range of companies and governance and management structures.

All current and potential exemptions to the scheme should be reviewed to ensure they are operating as intended and are not being exploited for covert malign influence,the committee found.

Governments traditionally adopt the recommendations of the committee given its expertise on security matters and culture of bipartisanship.

A spokesman for Attorney-General Mark Dreyfus said the committee had “concluded there are significant flaws in the scheme,and that substantial reform is required if it is to meet its original intent”.

“It is clear the scheme has failed and has not achieved what the Coalition said it would when it was introduced in 2018.

“The government will now carefully consider the PJCIS recommendations.”

Committee chair Peter Khalil said:“The committee was satisfied that the scheme’s objective of shining a light on both legitimate and malign foreign influence activities in our society remains worthwhile and necessary.

“Nevertheless,given the significant flaws in the scheme,the committee considers that substantial reform is required if the[foreign influence transparency scheme] is to meet its original intent and justify the compliance burden and resources required to administer it.”

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