A disturbing look into the dark side of Australia has revealed a fomenting brew of potential terrorists, foreign spies, cyber-hackers, lone-wolf extremists, agents provocateur, ultra-nationalists, white supremacists and anarchists.

The threat they pose to the nation ranges from possible to serious, but they have been compiled into a frightening list by the domestic spy agency, the Australian Secret Intelligence Organisation.

ASIO has gained from the tensions that followed the September 11, 2001, terror attacks on the United States, the Bali bombings, an attack on Australia's embassy in Jakarta, and bomb plots at home.

The agency's staff and budget have increased, it has opened a new cyber intelligence branch and a counter-terrorism control centre, its agents have a welter of tough and wide-ranging laws to employ, and the organisation is building a huge new home beside Lake Burley Griffin in Canberra.


ASIO has also been stepping up cooperation with other international agencies, working with New Zealand counterparts, for example, in the buildup to the Rugby World Cup.

The agency says all this, and more, is needed to counter growing threats to Australia and its interests at home and abroad, with a workload increased not only by terrorism but implications from shifts in global security.

"The conflict in Afghanistan, for example, continues to energise and fuel feelings of resentment toward the West, which risk finding manifestation in acts of terrorism," ASIO says in its latest annual report.

"The longstanding conflict between the Palestinians and Israel also continues to provide a source of extremism which can be reflected outside the Middle East in Western countries."

But ASIO itself is feeling pangs of insecurity. It warns against complacency, citing surveys in Australia and the US showing terrorism is no longer seen as a significant issue by most people.

The agency also points to complaints about the inconvenience and cost of counter-terrorism measures, and academic studies claiming governments have over-reacted.

"Despite counter-terrorism successes, including the death of Osama bin Laden and the thwarting of many planned terrorist attacks in Western countries over the past decade, the threat of a terrorist attack in Australia or against Australian interests in a number of countries overseas is real and will remain so," the report says.

Federal Attorney-General Robert McClelland, whose portfolio includes intelligence and counter-terrorism, says violent extremism - especially the home-grown variety - remains a persistent threat to the nation.

He said the number of ASIO counter-terrorism investigations and inquiries had grown consistently, from just over 100 in 2004-05 to almost 300 last year.

"It is a simple fact that we face real and serious threats to our national security," McClelland said.

ASIO's report says it is making continued investigations into Australians involved in or associated with terrorism, and other "first-order threats" including espionage and foreign interference in Australian life.

The agency says jihadist terrorism remains the most immediate security threat, and stand-alone jihadists or small groups - often with tenuous or no links to established groups - are increasingly joining the threat posed by organisations such as al-Qaeda and its affiliates.

"Australia is a terrorist target," ASIO says. "We have seen Australians and Australian interests deliberately targeted overseas and, in the past 10 years, four mass casualty attacks within Australia have been disrupted only because of the work of intelligence and law enforcement agencies."

Of the almost 40 people prosecuted for terrorism-related offences in Australia, 37 were Australian citizens and 34 were born there or had lived there since childhood.

ASIO says jihadist propagandists are targeting young English-speaking people, using the internet to spread their message.

The agency says it has tracked would-be Australian terrorists trying to reach Yemen, Somalia, Afghanistan and Pakistan.

But it warns that ideologies and motivations other than jihadist terrorism threaten Australia.

These include possible tensions over foreign conflicts that could spark communal violence, and small groups that are actively promoting hate.

ASIO says serious trouble has not yet erupted in Australia, but events such as a major terror attack abroad could "quickly and unexpectedly unlock the potential for violence latent in the underlying tensions".

It also points to a small but persistent subculture of racist and nationalist extremists in Australia.

Countering these has been an "anti-fascist" movement led by anarchists intent on confronting racists and nationalists.

And at the fringes are agents-provocateur who try to provoke violence through protests over emotive issues to push their own, often-unrelated, political agendas, using tactics such as sprays and fishing hooks flicked into the faces of police officers, sabotage and property damage, ASIO says.

As well, the agency says, espionage remains a threat in which the traditional tradecraft of spies has been joined by new technology - especially cyber attacks on government and business computers.

"The security challenges for Australia from espionage, terrorism and foreign interference will not diminish in the near term," ASIO says.