The Defence Department will review its foreign interference procedures after an investigation found "enough evidence" in claims that personnel were approached to provide military-related training to China.
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Defence Minister Richard Marles said there were already "layered policies in place to protect Defence people, information and assets from foreign collection", but if the review found weaknesses, the government would act on them.
"The information provided to me so far presents enough evidence to warrant the need for a detailed examination into the adequacy of current Defence policies and procedures addressing this matter," Mr Marles said.
"I have therefore instructed the Department to commence that process."
The Foreign Interference Task Force was still investigating a number of cases, he confirmed.
It follows reports that dozens of former British pilots were paid as instructors to China's military. Britain's Ministry of Defence confirmed in October it was taking steps to "deter and penalise" personnel who took work for the People's Liberation Army.
Defence officials revealed at Senate estimates that they were aware of the approaches before the reports were revealed in the media.
Mr Marles said it was no secret that Defence activities, people and assets were targets for foreign interference services.
"But let me be clear: Australians who work or have worked for the government in any capacity, particularly our ADF, who come into possession of the nation's secrets, have an obligation to maintain those secrets beyond their employment with, or their engagement with, the Commonwealth."
The "clear and unambiguous" obligation on former ADF personnel is enduring and to reveal any of those secrets is a crime, he said.
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Opposition defence spokesman Andrew Hastie supported the review of current policies and procedures governing ex-ADF personnel. In a statement, he said reports that pilots were approached by Chinese interests were "deeply concerning".
"Such conduct, if these allegations are verified, is highly improper and contrary to the Australian national interest," he said.
"Our national military secrets - including tactics, techniques and procedures for our elite fighter pilots - must be safeguarded by serving Defence members and our veterans. They are not for sale to another country."
If legislation was required to deal with the matter, the Coalition would work closely with the government to further safeguard sensitive national capabilities, he said.