Australia faces a world more volatile and dangerous than it has known for more than four decades, and “major-power conflict is no longer unimaginable”, a review of the country’s intelligence agencies has found.

The prime minister, Anthony Albanese, commissioned the review of the work of the 10 agencies that make up Australia’s national intelligence community in September 2023.

The report was handed to government in mid-2024 – before the US election in November, and the change in administration in Washington in January. But a declassified copy of the review was not released by the government until Friday morning.

Even before the change of government in the US, it warned the instability caused by the growing rivalry between China and the US – “a clash of interests and values that has proved impossible to reconcile and hard even to manage peacefully” – was being augmented by a “loose bloc of autocracies” undermining global security.

“The post-Cold War order has collapsed,” the 2024 Independent Intelligence Review said.

“It is not yet clear what will take its place, but for the foreseeable future Australia faces a world shaped by competition between nation-states and global geopolitical and economic fragmentation.”

The review said a “major regional conflict”, while not likely on its assessment, was “no longer unthinkable”. And it said coercion, disinformation and propaganda were routinely used across the Indo-Pacific region.

“The world in which Australia seeks security and prosperity is significantly more contested, fragmented and volatile.

“Major-power conflict is no longer unimaginable. New security threats are prominent, many amplified by technological change.”

The report’s authors, Dr Heather Smith, a former deputy director general of the Office of National Assessments and a professor at the Australian National University’s national security college, and Richard Maude, a former director general of the Office of National Assessments and executive director of policy at Asia Society Australia, argue three factors are the most consequential for Australia’s intelligence community.

1. There have been shifts in relative global power balances, accompanied by a sharp contest between nation-states for power and influence. This contest is at once diplomatic, military, economic and technological, and is pursued within Australia’s borders as much as beyond them, including through cyber-attacks and foreign interference.

2. New technologies are being used to amplify some old threats while creating entirely new ones.

3. There are a range of transnational challenges, including climate change, pandemics, irregular migration, terrorism, and polarisation and fraying social cohesion in many democracies. In a globalised world, the ripples from even geographically distant conflicts inevitably reach Australia, with significant, often grave, consequences.

The review argues that China and Russia are working more closely together to challenge US dominance, along with other autocratic states in loose self-interested alliance.

“Closer cooperation between China and Russia in the wake of Russia’s invasion of Ukraine is a notable shift. Russia, Iran and North Korea are deepening ties. A loose bloc of autocracies is now forcibly pursuing their national interests in ways that undercut global security and stability.”

The review also forecast the potential rise of nationalistic governments across Europe and in the US, affecting Australia’s alliances and foreign policy.

“The election of more nationalist or populist governments in Europe and the United States, for example, could introduce considerable uncertainty in global affairs and alter some of Australia’s current foreign and economic policy planning assumptions.”

The report highlighted climate change as a “priority” for intelligence agencies.

“One reason is that collaboration on global warming is now tangled in China-United States rivalry. And the technologies central to the clean energy transition – like solar panels, batteries and wind turbines – have become vectors of competition in themselves, as countries worry about security of supply and seek sovereign industrial advantage.”

The report said climate change presented significant security challenges – including food insecurity, ocean health, water shortages, disrupted supply chains and large-scale climate-induced migration.

Albanese said Australia’s intelligence agencies were crucial to the country’s security “and we have full confidence in their capacity”.

“We will continue to invest in capability to ensure Australia’s intelligence community can deal with emerging threats and challenges,” he said in a statement accompanying the review’s release on Friday.

The review found that while Australia’s intelligence agencies had been broadly successful in protecting national interests, intelligence agencies should be bolstered to be more prepared for future threats.

Among the 67 recommendations was a call for an economic security function to be set up within the Department of Treasury to protect against financial threats.

The review said economic decisions within the government was an area where national security risks were “becoming more challenging to manage”.

“In our judgement, a system re-design is needed,” it said.

The treasurer, Jim Chalmers, said national security and economic security were becoming more connected.

“National security and economic policy have become more and more intertwined,” Chalmers said. “They’ve always been intertwined to some extent, but they’re now almost inseparable from each other.”