Australian Security Intelligence Organisation director-general Mike Burgess has delivered his second annual threat assessment.

He says espionage and foreign interference continue to be levelled at not only the federal government but all states and territories as adversaries seek to undermine our pandemic recovery.

"We have already seen extremists trying to stoke social divisions and foreign intelligence services wanting intelligence about Australia's key export, technology and research industries," Mr Burgess said.

Politicians and staffers with secrets about their behaviour remain at risk.

"If you have something to hide it could be used by others."

Last year ASIO investigated a "nest of foreign spies" - from a country not in Australia's immediate region - targeting relationships politicians, a foreign embassy and a state police service.

"They successfully cultivated and recruited an Australian government security clearance holder who had access to sensitive details of defence technology," Mr Burgess said.

ASIO investigated, identified and verified the activity, cancelling the government employee's security clearance, confronted the foreign spies and "quietly and professionally" removed them from Australia.

He said it was only one example of ASIO's work, which has also targeted infiltration of universities.

"In the last 12 months, a significant number of foreign spies and their proxies have either been removed from Australia or rendered inoperative."

Iran tried to recruit the academic Kylie Moore-Gilbert as a spy for Tehran before she was released this year.

Head of the Australian Strategic Policy Institute Peter Jennings said what Mr Burgess didn't mention was that Chinese nationals associated with the Xinhua news agency were raided last June and on the same day were on a flight out of Australia.

"That is consistent with people being intelligence operatives," the strategic expert said.

A counter foreign interference task force has investigated over 30 cases, with the first charge laid in Melbourne last year.

Foreign spies are constantly seeking to penetrate government, defence, academia and business to steal classified information, military capabilities, policy plans and sensitive research.

And they continue to "intimidate members of diaspora communities" while seeking to interfere in democratic institutions.

Mr Burgess warned Australians needed to be aware of some of the techniques of espionage by the not easily identified young, well-educated, articulate and middle class operatives.

"Rather than a spy sidling up to a target on a train station, he or she is more likely to send a friend a request or a job offer or a spy might spam a whole lot of messages and then sit back and see who responds."

ASIO will be changing its language to "religiously motivated" and "ideologically motivated" violent extremism, ditching the label "Islamic extremism".

"Understandably, some Muslim groups - and others - see this term as damaging and misrepresentative of Islam, and consider that it stigmatises them by encouraging stereotyping and stoking division," he said.

After saying Australia's threat level was "unprecedented" in his first public threat assessment a year ago, it remains set at "probable", which means there is credible evidence intelligence groups and individuals have the capability and intent to conduct terrorism onshore.

ASIO is still worried about 15 and 16-year-olds, mostly male, who are being recruited to do harm.

Australian Associated Press