Coalition to pursue power to block deals such as Victoria's belt and road agreement with China

The Morrison government will pursue new powers to stop state, territory and local governments and universities entering agreements with foreign governments that it considers detrimental to Australia’s foreign policy objectives.

The government will introduce legislation next week empowering the foreign affairs minister to review and cancel agreements – such as Victoria’s decision to sign up to China’s belt and road initiative – if the commonwealth judges the arrangement adversely affects Australia’s foreign relations.

A planned stocktake of existing agreements will be broader than Victoria’s politically controversial belt and road agreement, but that deal has been viewed with concern by Australia’s national security establishment and it has also attracted criticism from the United States.

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The US secretary of state, Mike Pompeo, used an interview in May to leave open the possibility of suspending some forms of information sharing with Australia if the Victorian deal resulted in projects that affected the safety of security networks.

Within hours the US ambassador to Australia, Arthur Culvahouse Jr, clarified that the US had “absolute confidence in the Australian government’s ability to protect the security of its telecommunications networks and those of its Five Eyes partners” and Pompeo was simply answering questions about “very remote” hypotheticals.

The Australian prime minister, Scott Morrison, reiterated at the time of Pompeo’s intervention that the federal government had never supported Victoria’s belt and road involvement and Australian states should “respect and recognise the role of the federal government in setting foreign policy”.

Officials say Morrison flagged the government’s intentions to the premiers and chief ministers during a recent national security briefing for the national cabinet.

The new law the government is proposing would cover state or territory entities, including departments, agencies, local governments and universities established under state or territory law.

If the bill passes the parliament, within six months of the legislation taking effect governments and public universities will have to notify the commonwealth of their existing agreements with foreign governments.

Under the new procedures, state governments will have to notify the commonwealth of their intention to pursue an agreement with a foreign government. The foreign affairs minister will either approve or reject the proposal.

Even if the arrangement is approved initially, the foreign affairs minister will retain the power to revoke that approval subsequently. According to government briefing materials, the legislation will give the commonwealth power to terminate any private contracts and other agreements flowing from the main agreement.

Universities will not be required to seek approval before negotiating or entering into arrangements. But according to the federal government, they will need to notify the foreign affairs minister before entering into an arrangement with foreign governmental entities and Canberra will be able to cancel agreements it finds objectionable.

Australian universities have entered into a range of innovation and technology sharing agreements potentially caught by the new law, predominantly with China, but also with India, Iran and Afghanistan.

In a statement issued by his office ahead of Thursday’s announcement, Morrison said the federal government needed to be able to protect Australia’s national interest, and “that is why I recently arranged for all premiers and chief ministers to receive a comprehensive national security briefing”.

“It is vital that when it comes to Australia’s dealings with the rest of the world we speak with one voice and work to one plan,” he said. “Australians rightly expect the federal government they elect to set foreign policy.”

The foreign affairs minister, Marise Payne, said there was currently no legislative requirement or “clear understanding that states and territories consult properly with the commonwealth on arrangements with foreign governments”.

“These changes will provide governments, institutions and the Australian people with confidence that due diligence is given to international arrangements to ensure they are consistent with our national interest and our values,” Payne said.

Thursday’s announcement comes in a week where Morrison and several of his ministers have been more vocal in their criticism of the Victorian premier’s handling of the pandemic.

The new powers will likely trigger a diplomatic backlash in Beijing. Morrison’s intervention comes as a senior Chinese diplomat on Wednesday pushed back at claims of rising interference in Australian politics while calling on both countries to take steps to repair the rift in the relationship.

Wang Xining, the deputy head of mission of China’s embassy in Australia, said both sides needed to treat each other with respect to “make our partnership work for our people, for our children and for the world”.

While Morrison will unveil the new powers to cancel agreements the government judges to be contrary to Australia’s foreign policy interests, the Labor leader, Anthony Albanese, has scheduled an address at the National Press Club.

Since parliament resumed this week, Labor has been targeting the government on aged care. The outbreak in aged care facilities in Victoria during the second wave of infections has resulted in more than 300 deaths.

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Albanese on Thursday will call on the government to implement minimum staffing levels in residential aged care and reduce the home care package waiting list so more people can stay in their homes for longer.

He will also call for greater transparency over funding arrangements and independent measurement and public reporting as recommended by the two commissioners leading the royal commission into aged care this week.

In terms of the pandemic response, Albanese will call on the government to ensure every residential aged care facility has adequate supplies of personal protective equipment, and those workforces are trained in infection control.

The Labor leader will say the government needs a better surge workforce strategy, and the royal commission needs additional resources to examine the impact of the pandemic across the sector.