Foreign state-backed hackers are becoming more brazen in their attempts to use cyber espionage, Home Affairs Minister Peter Dutton warns.
Mr Dutton is set to launch a consultation paper on cybersecurity to update the nation's strategy, which outlines the increasing threats from foreign states.
"(State actors are) growing more organised, confident, and sophisticated in using cyber-espionage and interference to promote their national interests," the paper says, according to The Australian.
Australia's energy, telecommunications and transport sectors are at risk of being targeted by cyber attacks as they embrace the digital age.
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"These new threats, if realised ... could threaten physical safety, economic security and the continuity of government and its services."
Driverless cars have also been flagged as potential hacking targets, with fears they could be remotely controlled.
Mr Dutton believes the government and private sector should co-operate better to fend off cyber threats, which cost businesses $29 billion per year.
"As quickly as we advance, threats evolve and those who wish to do us harm adapt and change," he said.
The federal government has also prioritised combating foreign interference at Australia's universities, with a new taskforce to combat the issue.
The issue flared up in June when the Australian National University revealed hackers accessed nearly 20 years' of personal data of many staff and students.
