National interest 'not always obvious'

Threats to the national interest from a potential foreign investor in Australia are not always obvious at first blush, a Senate committee has been told.

Chinese buyers were frustrated when Treasurer Scott Morrison rejected a bid for the NSW electricity distributor Ausgrid in August.

But Treasury deputy secretary John Lonsdale said it was only after 12 months work on the bid that a series of risks were identified which were then communicated to the treasurer, the NSW government and the business itself.

"Yes, I understand concerns, but there is a whole process to make sure what goes to the treasurer for his decision is the best possible advice we can give," Mr Lonsdale told an estimates hearing on Thursday.

The hearing was told the guidance for foreign investment is continually assessed, but in terms of national security it is a complex issue.