Tech giants will have to hand over encrypted information to security agencies under draft laws introduced to federal parliament.
Home Affairs Minister Peter Dutton says terrorist organisations and criminal groups are using encryption technology to hide their communications from law enforcement.
As he introduced the legislation to the lower house on Thursday, Mr Dutton said encrypted information was relevant in 90 per cent of the Australian Security Intelligence Organisation's cases.
Messaging applications such as WhatsApp are considered encrypted as messages are encoded so only authorised parties can see them.
Under the legislation, Australian and overseas companies will be both compensated by the government and afforded immunity from legal action for providing encrypted data.
Companies can either voluntarily hand over information to security agencies or be required to after receiving a notice from either the Director-General of Security or the Attorney-General.
The legislation also boosts the power of Commonwealth, state and territory law enforcement agencies in respect to gaining access to computers.
Agencies would be able to execute computer access warrants, temporarily remove a computer or device, and "conceal its access to a computer" after the warrant expires.
Penalties of up to 10 years' jail could be faced for failing to hand over information when a warrant is in place and the data is linked to a serious crime.
Law enforcement agencies can remotely collect evidence from electronic devices under warrant in the proposed changes.
