Universities are bristling against the prospect of more regulation to combat foreign interference, as Australia's domestic spy agency warns the threat cannot be left unchecked.
ASIO has told the parliamentary joint committee on intelligence and security's inquiry on foreign interference in the university sector it has learnt of researchers and their families who have been threatened or coerced by actors seeking to provide their sensitive research to a foreign state.
The agency said it was also aware that some universities have been threatened with funding cuts should critical research continue, and of academics self-censoring to avoid being punished.
"In ASIO's view, we cannot leave harmful foreign interference unchecked, given the serious nature of the threat and the corrosive impact it can have on our democratic society," their submission reads.
However the Group of Eight chief executive Vicki Thomson told the inquiry Australia risked damaging important research collaborations if it over-reacted.
"The Go8 agrees that foreign interference is a significant risk in the current global environment and must be taken seriously. The consequences of inaction would be detrimental to the operations of Australia's high quality research effort, which is a critical part of our nation's sovereign capability," Ms Thomson said in her submission.
"The Go8 therefore agrees that the threat of foreign interference must be managed effectively. However ... effective management will require nuance care and balance. It could impact negatively both economically and socially if there are any policy missteps, regardless of how well-intentioned."
She said while Australia's relationship with China had been the subject of intense media scrutiny in the past year, Group of Eight universities - which conduct 70 per cent of Australian research - collaborated far more often with institutions in Europe, the US and the UK.
From 2015 to 2019, Australia produced around 28,000 co-publications with China. In the same period, the US and China published more than 260,000 joint papers.
The Australian National University said these figures "help put into context the risk associated with international collaboration across the university sector".
"ANU recognises that the foreign influence transparency scheme, the new Australia's Foreign Relations (State and Territory Arrangements) Act 2020, and the Defence Trade Controls Act all individually play a vital role in defending Australia and ensuring that our community does not become subject to foreign interference," their submission said.
"That said ANU does hold concerns that these legislative instruments when taken collectively will create highly regulated environment that may duplicate effort, unduly tie up resources and ultimately not deliver the desired outcome.
"ANU believes that it is imperative that any measures recommended by the PJCIS following this inquiry should support the sector rather than punish it by imposing a deeper regulatory burden."
The inquiry was referred to the committee by home Affairs Minister Peter Dutton, less than a week after the Morrison government revealed plans to give the Commonwealth the power to tear up agreements struck by governments and institutions that could be a threat to Australia's sovereignty.
The Australian Strategic Policy Institute has previously accused Australian universities like ANU of unwittingly creating major security risks by collaborating with universities in China that operate as arms of China's military, intelligence and political leadership.