Prime Minister Malcolm Turnbull ordered an inquiry in June after media revelations that the nation's spy agency had warned the country's political elite two years ago about taking donations from two billionaires with links to the Chinese Communist Party.
![Troublemaker removed from a plane (image used for illustrative purpose) [Shutterstock]](data:image/svg+xml;charset=utf8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20width%3D'100'%20height%3D'100'%20data-ring-placeholder%3D'1'%3E%3C%2Fsvg%3E "Troublemaker removed from a plane (image used for illustrative purpose) [Shutterstock]")
The probe, by the Australian Broadcasting Corporation and Fairfax Media, said that despite being cautioned both the Liberals and Labor continued accepting substantial sums of cash.
It said intelligence agencies had major concerns that China was interfering in Australian institutions and using the political donations system to gain access. Beijing denied the allegations as "totally groundless".
Since then concern over foreign interference has gathered momentum, heightened by ongoing revelations of Russian meddling in the American political system.
"The issue of foreign interference in our politics is an extremely serious problem," Attorney-General George Brandis told parliament on Monday.
"So I can tell the Senate that later this week, the government will introduce a milestone legislative package to reform Australia's espionage and foreign interference legislation."
He said the new laws would strengthen and modernise a range of offences "for the purposes of investigating, disrupting and prosecuting acts of espionage and covert interference in the Australian political process".
There would be a new transparency scheme, providing "visibility of the nature and extent of influence over Australia's government and political processes by foreign interests".
"It will introduce new offences targeting foreign interference and economic espionage, including offences that criminalise covert and deceptive activities that support the intelligence activities of foreign actors," he added.
Last week, a key Australian Labor MP, Sam Dastyari, was forced to resign as deputy opposition whip after reports that he told a Chinese businessman his phone was likely being tapped by intelligence agencies.
The man, Huang Xiangmo, is a prominent Chinese political donor.
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