Shaoquett Moselmane, a member of the opposition Labor Party from New South Wales, said he was told the investigation was looking into other people suspected of working with China and denied any wrongdoing.
“I have never jeopardized the welfare of our country and our people,” he told a news conference.
Police have not said why they searched Moselmane's Sydney home on Friday and also executed a warrant for his parliamentary offices.
Australia has accused China of seeking to interfere in its domestic politics, allegations that have strained relations and led Australia in 2018 to pass new national security laws that outlaw covert foreign interference in domestic politics and make industrial espionage for a foreign power a crime.
The raids are the first police investigation to grab public attention since the foreign interference laws came into force and the government bolstered funding to security agencies late last year to enforce them.
Moselmane said Monday that he would cooperate with Australian Federal Police in their investigation but also exercise his right to remain silent.
“I am under no illusion that this is a serious investigation,” he said.
Moselmane denied media reports that he had accepted Chinese government-funded trips to China.
In April, he stood down as assistant president of the New South Wales upper house after praising Chinese President Xi Jinping’s response to the coronavirus pandemic. He said Xi had demonstrated “unswerving leadership” and decisiveness.
Moselmane said Monday that his views on China’s handling of the pandemic were consistent with those of the U.S. president, vice president and the World Health Organization.
Police declined to comment on Moselmane’s news conference, saying in a statement, “As this investigation remains ongoing, there will be no further comment.”
Labor Party state leader Jodi McKay said Moselmane’s party membership was being suspended. Moselmane said he would take leave from Parliament until the police investigation was complete.
The Chinese Communist Party-controlled Global Times newspaper on Monday accused Australia of “waging an intensifying espionage campaign against China.”
The newspaper cited a Chinese law enforcement agency source as saying Australia was sending agents to China to spy, gather intelligence and “recruit assets.” Australia was described as “the thief who is crying stop the thief.”
Australian Prime Minister Scott Morrison declined to comment on the report.
“I wouldn’t be relying on Chinese state media for your sources for questions,” Morrison told a reporter who asked him about the Global Times allegations.
Morrison described the raids on Moselmane as a “very serious issue” for police and for the Australian Security Intelligence Organization, the nation's main domestic secret service.
“We introduced our foreign interference laws because we didn’t want Australia’s political system or any other part of the country to be interfered with,” Morrison said.
Morrison described Moselmane, a 55-year-old Lebanese immigrant who was mayor of a Sydney municipality before he was elected to Parliament in 2009, as a “very, very long-standing and relatively senior person” within the Labor Party.
The secret service, best known as ASIO, confirmed in a statement that “search warrant activity occurred in Sydney on Friday as part of an ongoing investigation,” but would not comment on Moselmane or its involvement.
Less than two weeks ago, Morrison said that a “sophisticated state-based cyber actor” was targeting Australia in an escalating cyber campaign that was threatening all levels of government, businesses, essential services and critical infrastructure.
Most analysts said Morrison was referring to China, but the prime minister would not name the country.
Already high tensions between Australia and China have been raised by the pandemic.
China in recent weeks has banned beef exports from Australia’s largest abattoirs, ended trade in Australian barley with a tariff wall and warned its citizens against visiting Australia. The measures have been interpreted by many as punishment for Australia’s advocacy of an independent probe into the origins and spread of the coronavirus.
Australia’s foreign minister has accused China of using the anxiety around the pandemic to undermine Western democracies by spreading disinformation online, prompting China to accuse Australia of disinformation.
This story has been corrected to show that the secret service is the Australian Security Intelligence Organization, not the Australian Security Intelligence Agency.