Ms O'Neil says the Australian people need to know what is happening with national security issues that could affect them.
"It requires a huge cultural shift within our intelligence agencies who are, by their very nature, covert, trying to keep secrets at all times," she told an ANU security podcast.
"We need them to do something different.
"The Australian people have to know more ... about the context and the ways in which people are trying to interfere with our politics and our security."
Ms O'Neil pointed to recent examples of the government publicising Russian hackers responsible for the Medibank cyber attack and revealing a foiled Iranian foreign interference plot.
She said home affairs secretary Mike Pezzullo was working with her to restructure the department to be better positioned to tackle foreign interference and cyber security risks.
"It's really saying, let's think about what domestic security means for us in this very, very difficult period we're about to enter as a country," Ms O'Neil said.
"My view is home affairs does need to change quite a bit to address those concerns."
This includes tackling the threat posed by radicalisation and extremism, with there being a short "flash to bang" period from someone being willing to commit violence to then acting on it.
"This obviously creates huge issues in public safety, because how do we find that person and intervene when there's just not much time to do it?" Ms O'Neil said.
"When the crisis comes, home affairs is going to play a key role.
"It's thinking about what those futures look like, what the domestic security implications would be for Australians and how are we going to prepare for those events and clean up the consequences if and when they occur."
