National security advice that led to the blocking of the half sale of the NSW electricity distributor to Chinese interests was "unequivocal", Prime Minister Malcolm Turnbull insists.
The federal government has knocked back two bids from China's State Grid and the Hong Kong-listed Cheung Kong Infrastructure for a 99-year lease on 50.4 per cent of Ausgrid, citing national security concerns.
Former foreign minister Bob Carr described the move as "economic populism" and putting the interests of new Senate crossbenchers who are opposed to all foreign investment ahead of jobs and economic growth.
Mr Turnbull told reporters during a visit to Mandurah in Western Australia no politics were involved.
"This is a decision of considerable gravity, I can assure you, but it was taken based on the unequivocal advice of our national security agencies," he said.
Treasurer Scott Morrison was more blunt about the suggestion new senators - on whom the government will rely to pass its laws this term - had been kept in mind when the decision was taken.
"That is crap. It is complete crap," he said.
"I don't trade on national security."
Defence Industry Minister Christopher Pyne also insisted the decision wasn't about race.
"We are going to make decisions that support Australia and it has nothing whatsoever to do with politics and everything to do with what's good for our country," he said.
But Labor's infrastructure spokesman Anthony Albanese questioned the coalition's inconsistency, saying Chinese interests had been allowed to buy into the energy sector in Victoria and South Australia.
"But perhaps most significantly, the government sat on its hands when last year Chinese interests were able to buy Darwin Port," he said.
"If you think about a strategic national asset, that's related to national security, I can't think of one more significant than Darwin Port."
The bidders have a week to respond to the treasurer's decision.
The NSW government has earmarked funds from the sale - expected to top $10 billion - for infrastructure projects.
It insists the federal government's preliminary decision won't hamper its efforts to deliver $20 billion worth of projects for new schools, hospitals, public transport and roads.
And no matter what Mr Morrison's final decision is in a week, NSW Treasurer Gladys Berejiklian says she's confident the Ausgrid transaction will proceed.
Labor leader Bill Shorten said the government needed to be clearer on what assets were not to be sold to foreign state-owned enterprises.
"We can't just make this an issue about China," he said.
"The issue is, if there are assets which national security says shouldn't be sold, then we should be up front, and up front a lot earlier in the process."
NSW Premier Mike Baird appeared to agree, saying his "main frustration" was the decision should have been made much earlier.
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