Foreign powers have been secretly trying to shape the opinions of the Australian public and media to advance their political interests and covertly influence ethnic and religious communities to curb criticism from them.
In ASIO's latest annual report, director-general Duncan Lewis said the intelligence agency had identified a number of states and other actors conducting espionage and foreign interference against Australia this past year.
Investigations revealed countries were carrying out intelligence operations to access sensitive government and industry information.
"We identified foreign powers clandestinely seeking to shape the opinions of members of the Australian public, media organisations and government officials in order to advance their country's own political objectives," he wrote.
"Ethnic and religious communities in Australia were also the subject of covert influence operations designed to diminish their criticism of foreign governments."
The agency warned that interference through "harassment" or other means can erode the freedoms enjoyed by everyone living in Australia.
Mr Lewis said such activities, carried out secretly to obscure the role of foreign governments, were a threat to Australia's sovereignty, the integrity of its national institutions and the exercise of citizens' rights.
ASIO expects the number of countries pursuing cyber espionage programs to rise, given their low-cost and the significant returns on offer.
"As technology evolves, there will be an increase in the sophistication and complexity of attacks," Mr Lewis said.
The clandestine nature of espionage and foreign interference made it difficult to quantify the cost, but the agency said the harm it causes is extensive.
"Emerging espionage and foreign interference in Australia's economy is a growing area of concern, particularly with the increase of investment flows," the report said.
"Another emerging issue of potential national security concern is the lack of diversity of ownership within certain infrastructure sectors."
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