New foreign deals legislation not an attack on China: Scott Morrison

"I reject that," Mr Morrison said to a question asking whether announcements like Thursday's new measures or Australia's new defence direction were about China.

But pressed on whether new measures that would give the federal government veto power over deals like Victoria's Belt and Road Initiative agreement with China, were all about Australia's largest trading partner, Mr Morrison would only say "these laws are about Australia's national sovereign interests".

Mr Morrison has flexed his constitutional muscle with the new legislation, announced on Thursday and to be introduced to Parliament next week, which would give the Foreign Affairs Minister the final say on whether deals between state and territory governments, local councils and publicly-owned universities with foreign governments align with the national interest. Deals ruled against the national interest could be vetoed and existing agreements could be revoked.

On Thursday Mr Morrison wouldn't say whether Victoria's deal with China on the Belt and Road Initiative would be scrapped, but also made it clear signing up to the initiative wasn't federal government policy.

"It's never been our government's policy, under myself or the previous prime minister, that we signed up to or endorsed the BRI," he said.

Foreign Affairs Minister Marise Payne said under current arrangements the federal government had no process of consultation with state and territory governments over deals with foreign governments, and no understanding that there should be federal government involvement.

"We risk having an uncoordinated patchwork approach to contracts or MoUs or relationships and collaborations that could have an adverse effect on our foreign policy," Senator Payne said.

"We're not looking to impinge on state and territory functioning or micromanage their dealings with the world but it's appropriate and necessary that the Commonwealth government protect our national interest, and importantly maintain our values as a nation in doing that."

Under the new legislation, deals between state and territory governments, councils and universities with foreign governments will be required to be listed on a public register, which will be managed by the Department of Foreign Affairs and Trade. Asked whether the register will also include deals that are rejected and why, Senator Payne said the detail would be in the legislation "but the intention is to make the arrangements transparent".

While there have been tensions between state governments and the federal government over constituional responsibility when it comes to the response to the COVID-19 pandemic, Mr Morrison said foreign affairs was undoubtedly part of his government's purview.

"I'm not seeking to change any of the powers here. I'm seeking to ensure that the powers that we have, and we're responsible for, that we deal to and that is external affairs, that is foreign affairs. That's what the constitution invests in the Federal government. So I think honouring the constitution sits alongside the federalist tradition of certainly our party and this is a very important affirmation of that."