An inquiry into the government's first tranche of new anti-terrorism laws has called for greater oversight of ASIO's operations.
The joint committee on intelligence and security on Wednesday released its report into draft national security laws which are before the parliament.
The government says the laws are needed to tackle the growing threat of home-grown terrorism sparked by the rise of Islamic State extremists.
A second tranche of laws, dealing with foreign fighters, will be introduced by Attorney-General George Brandis next week.
The bipartisan committee called for a boost in the budget of the spy watchdog, the Inspector-General of Intelligence and Security (IGIS), to oversee ASIO's special intelligence operations and the use of force during the execution of warrants.
The committee's report, tabled on Wednesday, said the government should appoint an independent national security legislation monitor as soon as practicable.
IGIS should closely oversee any authorisation of the use of force by ASIO agents to ensure the powers are only used in exceptional circumstances, the report said.
ASIO should be required to notify the attorney-general and IGIS within 24 hours of an incident in which force is used by an ASIO officer.
The committee also made recommendations to tighten the use of warrants to access computer networks and endorsed a move to allow the Australian Secret Intelligence Service to spy on Australians overseas who may be involved in intelligence or counter-intelligence activities.
Committee chairman, Liberal MP Dan Tehan, said the community could be satisfied that the bill balanced national security requirements with safeguards.
