The federal government is being urged to spare Australia's national security agencies from annual funding cuts.
A bi-partisan parliamentary committee has recommended the efficiency dividend - a yearly budget saving across commonwealth departments - be removed from all ASIO, ASIS and Australian Federal Police operations.
A review by the Department of Prime Minister and Cabinet made a similar suggestion in 2015.
While welcoming a recent boost in funding for counter-terrorism, the committee noted the need to maintain sufficient base funding in the longer term.
"Our intelligence and security agencies need to be funded to deal not just with the increased threat to the community from terrorism but also increased internal security threats and other significant external threats such as foreign espionage and cyber attacks," said the report, tabled in parliament on Wednesday.
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It claimed the risks associated with reducing an agency's operational capability were akin to the risks associated with reducing Australia's Defence capability.
Chair Andrew Hastie told parliament the arrest of NSW electrician Haisem Zahab showed the threat of ISIS-inspired terrorism was real and close to home.
"It is our duty to make sure ASIO, ASIS and the AFP - those charged with protecting us from those who do us harm - have everything they need to be operationally effective," the Liberal MP said.
