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Defence personnel will be authorised to shoot to kill terrorists attacking Australian defence bases.
Defence personnel are also set to gain greater powers to search people moving on and off defence bases for unauthorised items and contraband.
It follows a review of defence base security in 2009 conducted after the arrest of a number of individuals who were allegedly plotting to attack the Holsworthy Army base outside Sydney.
Defence Minister John Faulkner said the review recommended a number of enhancements to base security plus some legislative changes to powers available to defence personnel.
A key recommendation was to clarify legal issues surrounding Australian Defence Force (ADF) members acting in self-defence in event of a no warning attack.
Senator Faulkner said the general right of self defence provided the current legal basis for ADF personnel resorting to force.
He said the proposed legislative changes would provide certainty on what was permitted.
"They will clarify the regime for authorised members of the ADF to use up to and including lethal force where this is considered reasonable and necessary to protect life or prevent serious injury to themselves or others in event of an actual or imminent attack on defence premises," he said.
Senator Faulkner said this did not alter the primacy of civil police in responding to security incidents at defence facilities.
Rather, it ensured appropriately trained ADF personnel were able to immediately defend themselves and others until police took control.
Senator Faulkner said the legislation empowered defence security officials to request a person's identity, conduct a search on entry or departure from a defence base and in some circumstances refuse entry or detain a person.
He said the identification and search power would generally be exercised by contracted security guards while the powers to conduct non-consensual searches or to detain would be exercised by defence security officers.
Senator Faulkner said the legislation would stiffen penalties for trespassing on defence premises which now attract a grossly inadequate $40 fine.
That will be increased to $5500.
Debate on the Defence Legislation Amendment (Security of Defence Premises) Bill 2010 was adjourned.