The Australian Strategic Policy Institute (ASPI), a think tank known for its critical stance on China, is facing significant funding cuts.

A government review of national security research funding conducted by former Department of Foreign Affairs and Trade secretary Peter Varghese has recommended that think tanks like ASPI reapply for government funding every five years and allow government-appointed observers on their governing boards.

ASPI, which relies on government funding for more than half of its $8 million annual budget, is also set to lose funding for its Washington, DC, office by 2025.

This office was established in 2022 with a $5 million grant from former Defence Minister Peter Dutton, aimed at strengthening Australian representation in US security policy discussions.

ASPI Executive Director Justin Bassi has expressed concern that the changes could compromise the independence of think tanks.

“The government’s endorsement of this review shows a clear pattern of bringing greater command and control to the work of independent national security think tanks,” Bassi told the Sydney Morning Herald, adding that the presence of government officials on boards threatens “the principle of contestability.”

Critics, including Shadow Home Affairs Minister James Paterson, argue that the move undermines ASPI’s role as an independent voice in national security debates.

“This will have a chilling effect on all researchers working on the Chinese Communist Party,” he said.

Others support the push for greater transparency.

The review criticised current funding arrangements as “ad-hoc” and lacking accountability. Proponents believe the new framework could lead to more efficient allocation of resources and higher research standards.

However, the timing of these measures has raised eyebrows, particularly as Australia seeks to bolster its strategic alliances through initiatives like AUKUS.

The closure of ASPI’s Washington office has been labelled a “misstep” by former Labor MP David Feeney, who highlighted its importance in fostering Australia-US collaboration during critical geopolitical shifts.

The recommendations will also impact other organisations, including the Lowy Institute and the Australian National University’s National Security College.

All think tanks receiving government funding will face similar oversight measures, sparking concerns about the erosion of their independence.

The Albanese government has accepted eight of the report’s 14 recommendations, with plans to implement a five-year funding cycle beginning in 2027.

The full report is accessible here, and the government’s response, here.

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