ASIO cut counterterrorism funding share to post-9/11 low before Bondi attack

Australia's intelligence agencies had cut counterterrorism funding to its lowest share this century before the Bondi massacre, despite warnings that a terrorist attack was probable and that antisemitic violence posed an escalating threat to life.

The ABC understands classified figures, provided to the royal commission investigating the mass shooting, show counterterrorism had fallen to its lowest resourcing share across ASIO and National Intelligence Community (NIC) agencies since the September 11, 2001, attacks.

The decline occurred amid a $3.4 billion funding increase for NIC agencies since 2020, including a 37 per cent rise for ASIO.

Instead, the surging threat of espionage and foreign interference, particularly from China, consumed a growing share of resources, eclipsing terrorism as ASIO's top priority by 2022.

ASIO director-general Mike Burgess is expected to face questioning about that shift at the next block of hearings of the Royal Commission on Antisemitism and Social Cohesion, starting Monday.

The commission is examining whether ASIO and other agencies responded adequately as the terrorism threat rose and antisemitic violence escalated after the October 7, 2023, attacks in Israel.

The exact amount of counterterrorism intelligence resourcing remains classified and is a closely guarded national security secret.

But the ABC understands it fell to a similar proportion to the years before September 11, 2001, when ASIO devoted 35–40 per cent of its resources to counterterrorism.

That compares with more than 70 per cent during the war on terror, according to a Coalition policy document from 2004.

Mr Burgess oversaw a sharp shift in ASIO's priorities after becoming director-general in 2019, soon after the collapse of the so-called Islamic State (IS) caliphate in Syria and Iraq.

In 2022, he declared threats from foreign states as the agency's primary focus, and reduced the national terrorism threat level.

But after several attacks and foiled plots in 2024, ASIO raised the terrorism threat level again to "probable" — the same level as during the height of the IS caliphate — meaning an attack was assessed as more than 50 per cent likely.

In February 2025, after a series of firebombings and attacks on Jewish sites in Sydney and Melbourne, Mr Burgess identified antisemitic violence as ASIO's top priority "in terms of threat to life".

A source with close knowledge of the royal commission inquiry said official figures showed ASIO temporarily increased the share of resources dedicated to counterterrorism in connection with the August 2024 threat-level increase.

But the source said that share had fallen again by last December, when two IS supporters killed 15 people at a Hanukkah celebration at Bondi Beach.

The ASIO counterterrorism figures do not include significant resources devoted to a major investigation into antisemitic arson attacks during that period because that work largely came out of the organisation's Counter Espionage and Interference budget.

That investigation concluded that Iran's Islamic Revolutionary Guard Corps (IRGC) organised attacks on Melbourne's Adass Israel Synagogue and a Bondi eatery.

It did not focus on local supporters of the Islamic State group or the radical Salafi Islamist network which produced the Bondi gunmen.

In response to questions from the ABC, ASIO said it could not comment as the royal commission was underway.

A security official, speaking on condition of anonymity, rejected suggestions counterterrorism resourcing had fallen again last year, citing the IRGC investigation as one of the biggest in ASIO's history.

The ABC asked Home Affairs Minister Tony Burke whether the federal government had received any request to increase counterterrorism funding in response to the deteriorating security environment.

Mr Burke said intelligence agencies were responsible for prioritising resources across "increasing and converging" threats, including terrorism, foreign interference and cyber, and that the government had continued to provide additional funding.

Royal commission to test ASIO's handling of terror threat

In her interim report last month, royal commissioner Virginia Bell identified ASIO's response to the terrorist threat and rising antisemitic violence — as well as its resourcing of counterterrorism — as key questions for the inquiry.

"It will be necessary to investigate whether and how ASIO and other Commonwealth and state intelligence and law enforcement agencies understood and acted on those assessments of a probable attack," the report said.

"And to consider the adequacy of what was said to be ASIO's 'full use of our capabilities and powers' in the context of ongoing antisemitic attacks."

The interim report found the share of counterterrorism funding "significantly declined" across Australia's intelligence agencies from 2020 to 2025.

The commission is also investigating how the Bondi gunmen were able to legally acquire guns and travel to Central Asia and a former IS hotspot in the Philippines without raising alarms, after landing on the counterterrorism radar years earlier.

ASIO had concluded the pair did not pose a terrorist threat after a 2019 investigation into associations with an Islamic State cell in Sydney — an assessment later questioned by the commission's former special adviser, ex-ASIO chief Dennis Richardson.

The commission is examining why ASIO did not reassess the pair.

An internal ASIO review has found no intelligence failure or negligence based on the information the agency possessed before the Bondi attack.

'Threat to life is a priority for my organisation'

Mr Burgess defended ASIO's funding decisions earlier this month, saying the agency had "dealt with" the terrorism risk after shifting resources in line with the threat level.

"We lowered the threat level in November 22, we raised it in August 24 and the resources were adjusted accordingly with the threat levels," he said.

"And I can assure you and anyone listening to this that our resources applied to priorities, and threat to life is a priority for my organisation."

He last year warned ASIO could no longer prioritise its work between terrorism, espionage and foreign interference, declaring Australia had "never faced so many threats at once", which were increasingly merging and intersecting.

A Four Corners investigation into the Bondi attack this year heard from multiple senior ASIO officers with recent experience who warned of years of cuts to counterterrorism spending, staffing, expertise and human intelligence capability.

ASIO publicly rejected the accounts, saying they were untrue.

The agency also described suggestions that resourcing decisions increased the likelihood of the Bondi attack as "false, irresponsible and [demonstrating] profound ignorance".

Overseas agencies have warned about Islamic State's resurgence in recent years.

In July 2024, a United Nations Security Council report warned of rising terrorist threat levels across Europe due to the group's revival.

That same year, MI5 director-general Ken McCallum described Islamic State's resurgence and its efforts to export terrorism to the West as the terrorist trend that concerned him most.

Last October, he warned that a more hostile world was forcing the biggest shifts in MI5's mission since September 11, with near-record terrorism investigations coinciding with fast-rising state threats.

The royal commission's interim report also documented a declining focus on counterterrorism across government, identifying gaps in information-sharing, failures in coordination, and the downgrading of the national counterterrorism coordinator role to a part-time position.

The government has accepted the report's recommendations and committed an extra $600 million over four years in this month's federal budget to combating antisemitism and terrorism, including funding for Jewish organisations, security of the Jewish community and a new national centre targeting terrorists and radicalisation online.