A crossbench senator is threatening to take the health department to an independent tribunal if it keeps refusing to reveal how much it spent fighting tobacco giant Philip Morris over plain packaging laws.
Nick Xenophon wants to know what it cost taxpayers to defend the case, but the department insists it needs to be kept secret.
The international Permanent Court of Arbitration last year rejected the company's case, unanimously agreeing with Australia's argument it had no jurisdiction to hear the claim.
The company tried to argue the plain packaging laws breached foreign investment protections the Australian government guaranteed in its trade agreement with Hong Kong, which contains an investor state dispute settlement (ISDS) mechanism.
Health department boss Martin Bowles says the government doesn't want to show its hand because it's still trying to claim costs against Philip Morris.
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"That's why it goes in the budget papers as not for publication," he told a Senate committee on Wednesday.
"Once we've settled that, I will revist your question to see if we have an option around giving you more visibility."
Senator Xenophon said it was "outrageous" to keep the cost secret, arguing it could shed light over how "problematic" ISDS clauses in free-trade agreements can be.
"I might end up seeing you at the AAT (Administrative Appeals Tribunal)," he told Mr Bowles.
"The Senate has a fundamental appropriation oversight responsibility over how taxpayers' money is being spent."
Senator Xenophon told AAP the health department's argument was "complete nonsense", arguing it raised broader issues about the cost of ISDS provisions and the risks they could pose to Australian companies.
"Why shouldn't we know? Taxpayers are entitled to know," he said.
