New military technology permit exemptions for the US and UK will slash red tape for exports.
Defence Minister Richard Marles moved legislation on Thursday that will regulate the supply of data such as blueprints, military technology and related services to foreign nationals in Australia.
For example, if a company makes a dual-use radio that is covered under the prescribed defence goods list, employees from countries that are not on the 25-nation strong foreign countries list would need a permit to access the tech.
With America and Britain exempt from export permits as Australia tries to streamline the transfer technology as part of the tripartite AUKUS agreement before it gets nuclear submarines, it will cut almost a third of the 3000 permits assessed annually.
It would also save defence companies $614 million over 10 years and provide a benefit to $5 billion worth of annual defence exports.
"This bill will bolster Australia's national security and protect our sensitive defence goods and technology by enhancing defence trade controls," he told parliament.
"It will also unlock defence trade innovation and collaboration with our AUKUS partners to keep pace with the difficult strategic circumstances we face.
"It is essential that Australia has a robust protective security framework."
Those carrying out new activities created by the laws without a permit would face a maximum of 10 years of prison.
Mr Marles said the laws were not intended to stop foreign students or academics doing work with Australian institutes.
"Much of the existing collaboration and trade between Australia and international partners will be unaffected by these changes," he said.
"Rather, the policy intent of the bill is to prevent sensitive defence goods and technologies from being passed to foreign individuals or governments in a manner that may harm Australia's interests."
Mr Marles is travelling to California to attend the second AUKUS defence ministers' meeting on Friday.
