EXCLUSIVE: AFP’s special counter-terrorism outfit quietly axed weeks before Bondi massacre

An Australian Federal Police “national surveillance team” set up under the Commonwealth High Risk Terrorist Offender regime was quietly disbanded because of funding shortfalls just weeks before the deadly Bondi attack.

The Nightly can reveal the decision to wind up the Canberra-based squad was made late last year after a senior AFP figure told staff: “Current budget pressures and the lack of certainty in relation to ongoing funding has limited our ability to fill vacancies.”

In correspondence seen by The Nightly, team members were told consideration was being given to dissolving their group, and funding for their positions would be returned to the AFP’s Counter Terrorism and Special Investigations Command.

“Whilst funding for eight positions was confirmed in February 2025 for the 2025-26 financial year, this did not meet the requirements for 10 members under AFP best practice,” the commander of Covert and Technical Operations, Intelligence and Covert Services said.

“Further to this, funding was only confirmed for the ‘25-26 financial year and not out years. As such, a decision on the future of the team against competing resourcing and operational priorities is required,” the commander told affected staff in September.

AFP insiders claim when counter-terrorism operations were at their peak around a decade ago following the emergence of Islamic State, funding was provided to establish extra surveillance teams around the country, which could be “highly mobile”.

“I think the AFP’s CTSI Command decided the budget for that surveillance team had more benefit being poured into the investigative part, so they’ve decided to disband it and send the people back to ACT Policing,” a former senior officer says.

“This question does arise: in light of the accused terrorists not being monitored, could that capability not have been directed to Sydney based counter terrorism surveillance?”

Following the December 14 Bondi massacre, Prime Minister Anthony Albanese insisted Australia’s national security agencies, including the AFP have “never had more funding than they have today”.

When asked last month whether the AFP and spy agency ASIO should have received more resourcing to deal with radicalisation and extremism, Mr Albanese responded that “every single request from a security agency has been granted by my government.”

AFP Commissioner Krissy Barrett also acknowledged that “increasingly complex environments” required “constant re-prioritisation” but has insisted “where I do need more resources, I do and will have those conversations with government”.

The Nightly approached the AFP for details about the recent disbanding of its Canberra based national surveillance team, but a spokesperson responded: “the AFP does not comment on surveillance capabilities”.

Last year The Nightly revealed the union representing Federal police had warned the Albanese Government the force was suffering “chronic and worsening shortages” of counter-terrorism offices weeks before the Bondi terrorist attack.

“Australia’s threat environment is not shrinking; it is expanding rapidly. The men and women of the AFP stand on the front line every day, and they deserve the resources required to keep doing so effectively,” the AFP Association wrote in November.

Former Defence and ASIO boss Dennis Richardson is leading a closed-door investigation into the actions of security agencies and Federal police before the Bondi shootings, as the Albanese Government resists calls for a wider Royal Commission.

Government sources say Federal Parliament is also expected to be recalled early this year, most likely in the week before Australia Day, to pass legislation to help crack down on hate preachers and extremist organisations.

“Every day that the Parliament has not come back has been a day that it should have come back, so, in fact, whenever it comes back, it won’t be coming back early - it will be coming back late,” Opposition Leader Sussan Ley told reporters in Canberra on Monday.

Ms Ley again demanded the Prime Minister announce a Royal Commission into the anti-Semitic shootings at Bondi, a move also backed in an open letter to Anthony Albanese from four teal independent MPs.

The letter acknowledged the Government’s actions and commitments in the wake of the massacre, however “remained concerned” the response to it “will not adequately address anti-Semitism in the community”.

Led by Kooyong MP Monique Ryan, the joint letter was also signed by Curtin MP Kate Chaney, Mackellar MP Sophie Scamps and Warringah MP Zali Steggall on December 22, 2025.