A new approach to cyber security is needed because foreign state-backed hackers are becoming more brazen in their attempts to use online espionage, the government says.
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Home Affairs Minister Peter Dutton on Friday released a consultation paper to update the nation's cyber security strategy, with submissions open until November.
The first strategy was created just three years ago.
"State actors are growing more organised, confident, and sophisticated in using cyber espionage and interference to promote their national interests," the paper says.
Australia's energy, telecommunications and transport sectors are at risk of being targeted by cyber attacks as they embrace the digital age.
"These new threats, if realised in Australia, could threaten physical safety, economic security and the continuity of government and its services."
The consultation paper poses more than 20 questions for the public to consider, covering a range of issues including who should be responsible for managing cyber risks.
It flags the potential for the private sector to be handed some of the government's current responsibilities in the area.
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 managing director of Macquarie Government, who supply data sharing and cloud services for government agencies, said the discussion paper was an excellent step.
Aidan Tudehope said previous governments had treated cybersecurity as an afterthought.
But Mr Tudehope believes Australians would lose trust in government services and critical infrastructure without such protections.
"Digitalising government services is a train crash waiting to happen if you don't bake in cybersecurity," he told AAP.
He said it was important for cyber services to be run by Australians and operated locally.
Mr Tudehope also said relying on technical support from overseas should stop, as it meant giving outsiders access to important systems.
The consultation paper comes after China was suspected of a sophisticated cyber attack on the networks of federal parliament in February.
The Australian National University was also targeted by hackers, leading to a new task force to combat foreign interference at universities.
Australian Associated Press
