Australia's Foreign Relations (State and Territory Arrangements) Amendment Bill 2026: strengthening national-interest oversight of subnational foreign deals

The short answer

Australia's Foreign Relations (State and Territory Arrangements) Amendment Bill 2026: strengthening national-interest oversight of subnational foreign deals

The Australia's Foreign Relations (State and Territory Arrangements) Amendment Bill 2026 would implement recommendations of the 2025 Independent Review of the Foreign Arrangements Scheme led by Rosemary Huxtable. The bill would embed the national interest as an explicit test in the scheme's objects, would give the minister power to impose conditions on foreign arrangements, would extend oversight to overseas campuses of Australian universities, and would remove approval steps for minor variations and renewals of already-assessed arrangements; according to the official summary on the Parliament of Australia bill page, it would also amend the Australian Security Intelligence Organisation Act 1979 so that certain advice and recommendations relating to the scheme are not prescribed administrative actions for the purposes of the security assessment framework. Introduced in the House of Representatives on 1 July 2026 and referred to the Parliamentary Joint Committee on Intelligence and Security on 6 July 2026, the bill passed both Houses of Parliament on 20 August 2026 and now awaits Royal Assent; earlier, on 19 August 2026 the second reading debate resumed and was adjourned, the Leader of the House declared the bill referred to the Federation Chamber, and the committee presented its advisory report on the bill, made a Parliamentary Paper; the bill is not enacted and would need to pass both houses and receive Royal Assent before any provision could commence.

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Evidence review

What the Foreign Arrangements Scheme does

The Foreign Arrangements Scheme was introduced in 2020 to provide Commonwealth visibility and oversight of foreign engagements entered into by state and territory governments, local governments and public universities. It requires these entities to notify, and in some cases seek approval for, arrangements with foreign entities — particularly foreign government departments, agencies and universities whose governance lacks independence from a foreign state. More than 22,000 notifications have been received since the scheme commenced.

Evidence review

The Huxtable review recommendations

In 2024 the government commissioned Rosemary Huxtable, a former senior public servant in national security and foreign policy, to conduct an independent review of the scheme. The review examined whether the scheme's legislative framework, operational processes, and risk assessment methodologies remained fit for purpose in a more contested strategic environment. The terms of reference directed the reviewer to consider how the scheme could better concentrate its resources on areas of greatest risk while reducing unnecessary compliance burdens on entities that consistently demonstrated good practice.

The review confirmed the scheme was fundamentally sound but identified specific opportunities for strengthening and streamlining. Huxtable found that the minister's binary choice between approving or refusing an arrangement was unnecessarily inflexible, and recommended introducing a power to impose conditions as a more proportionate middle ground. The review also identified overseas campuses of Australian universities as a gap in the scheme's coverage. The official summary on the Parliament of Australia bill page describes the bill as implementing certain recommendations of the 2025 Independent Review of the Foreign Arrangements Scheme.

Evidence review

Strengthening the national interest framework

The bill would explicitly embed the national interest in the objects of the Act, so decisions would weigh Australia's security, economic and foreign policy interests. It would expand the minister's toolkit by allowing conditions to be imposed on foreign arrangements both at the point of approval and during their operation, a more flexible alternative to outright refusal or cancellation. The bill would also extend the scheme's reach to arrangements entered into by overseas campuses of Australian universities, and would allow the minister to address inadvertent breaches of the scheme flexibly.

The bill would also amend the Australian Security Intelligence Organisation Act 1979, so that certain advice and recommendations relating to the Foreign Arrangements Scheme are not prescribed administrative actions for the purposes of the security assessment framework.

Evidence review

Reducing burden for lower-risk arrangements

Alongside the strengthened oversight powers, the bill would reduce unnecessary regulatory requirements for lower-risk arrangements. Specifically, it would remove approval steps for minor variations and renewals of arrangements that have already been assessed by the Commonwealth and found to be consistent with Australia's national interest. If enacted, a university renewing a research partnership with a foreign institution on substantially similar terms, or a local council extending a previously approved sister-city arrangement, would not need to go through the full assessment process again.

The bill would also clarify key concepts such as institutional autonomy so the scheme can be applied consistently across different entities. The minister would be given more flexible administrative tools, including targeted delegation powers that would allow routine decisions to be made at the departmental level, and limited extensions of decision timeframes so that complex arrangements could be properly assessed.

Evidence review

Use of scheme powers in practice

The scheme has already enabled action where foreign arrangements were deemed contrary to Australia's interests. Earlier in 2026, the government used scheme powers to prohibit two arrangements — one involving Russian entities and another involving Belarusian entities — following Russia's full-scale invasion of Ukraine. These were the first instances where the scheme's prohibition powers had been exercised since the scheme's commencement.

Assistant Minister Thistlethwaite described the reforms as striking 'the right balance' between supporting beneficial international engagement and managing risk in what he characterised as a more contested global environment. He noted that the vast majority of the more than 22,000 arrangements notified since 2020 raised no concerns and were processed without intervention.

Evidence review

Current status and next steps

The bill was introduced and read a first time in the House of Representatives on 1 July 2026, with the second reading moved the same day, and it was referred to the Parliamentary Joint Committee on Intelligence and Security on 6 July 2026. On 19 August 2026 the second reading debate resumed and was adjourned, the Leader of the House declared the bill referred to the Federation Chamber, and the committee presented its advisory report on the bill, which was made a Parliamentary Paper. The bill remains before the House and is not enacted; it would need to pass both houses and receive Royal Assent before any provision could commence. If the bill were to pass, the substantive reforms — including the condition-making power and the extension to overseas campuses — would come into effect on a date to be proclaimed.

Evidence review

Chamber record cross-check — 19 August 2026

House Live Minutes No. 77 for Wednesday 19 August 2026 (record c84e8bb3e3957263) list the Australia's Foreign Relations (State and Territory Arrangements) Amendment Bill 2026 at item 6: the order of the day was read for the resumption of the debate on the second reading question, debate resumed with Mr Ted O'Brien speaking at 9:17 am, and the debate was adjourned at 9:31 am by the Attorney-General, Ms Rowland, with the resumption of the debate made an order of the day for a later hour. The same minutes (record 142bb5914971a5cf) record that the Leader of the House, Mr Burke, declared the bill referred to the Federation Chamber for further consideration at the adjournment of the second reading debate, and that Mr Wallace (Deputy Chair) presented the Intelligence and Security — Parliamentary Joint Committee — Advisory report on the bill — Report, August 2026 — which, in accordance with standing order 39(e), was made a Parliamentary Paper.

House Live Minutes are a draft working record of the chamber, subject to revision; they do not replace the corrected Hansard or the settled Votes and Proceedings. The bill page records the second reading debate and the referral to the Federation Chamber as events of 19 August 2026, with the bill before the House of Representatives. Listing, debate, referral and passage are distinct steps: as at 19 August 2026 the bill had not passed either house and is not enacted.

Common questions

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