Politicians have given the thumbs up to sweeping new powers for law enforcement agencies allowing them to take over social media accounts to hunt down criminals on the dark web.
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But the proposed powers would need to be coupled with increased oversight, robust authorisation processes, and a review every three years to ensure "community confidence" in the authorities, they warned.
Members of the security parliamentary committee said they accepted witness evidence that the threat level was severe and agencies didn't have the tools to combat it, in a new report.
The three new powers proposed for the Australian Federal Police and the Australian Criminal Intelligence Commission would grant the two agencies the ability to obtain warrants to disrupt data, monitor network activity and covertly take control of online accounts.
Liberal senator and committee chairman James Paterson said the powers, under the Identify and Disrupt Bill, should be passed into law but with adequate safeguards.
"The new warrants will give our law enforcement agencies effective powers to enable swift and decisive action against the rising challenge of serious online crime," Senator Paterson said.
"However, the committee also recommends increased oversight, more prescription in the offences the warrants are able to target and a more robust authorisation process for the warrants to give the community confidence they will only used for their intended purpose."
Labor members agreed with the government-majority committee's recommendations but added the bill's use of "relevant offences" should be changed to "serious offences".
Under legislation, relevant offences are defined as crimes punishable by a maximum jail time of three years or more.
It means tax offences, trade mark infringements and a range of other non-violent crimes would also fall under this definition and be subject to the new powers, Labor argued.
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It is two months after Prime Minister Scott Morrison praised the federal police for their involvement in taking down cross-national criminal activities.
The global police operation, involving the Australian Federal Police, resulted in charges being laid against 224 people across the country and many more internationally.
The drug bust was uncovered after the US Federal Bureau of Investigation devised its own encrypted messaging app, which criminals signed on to and communicated through unaware it was being monitored by law enforcement agencies in Australia and around the world.
Mr Morrison and AFP commissioner Reece Kershaw stood side by side to warn the public future threats could only be thwarted once more powerful national security laws, including the Identify and Disrupt bill, were passed.
"When our laws, which we don't have bipartisan support for changing, allow criminals to be able to get credentials and to be able to be on our ports, then that is something only the Parliament can shut down," Mr Morrison said.
"That's what we need to change and it should be passed now."
But Labor home affairs spokeswoman Kristina Keneally said her party backed the proposed laws and that Mr Morrison was simply "playing politics with national security".
"He flat out lied when it came to the Identify and Disrupt legislation," Senator Keneally said in June.
"He said that there are parties in the Parliament, including my own, that don't support that legislation. He's flat out wrong."
But many experts warned the powers would threaten the civil liberties, adding the threat was not proportional to the sweeping changes.
Human Rights Law Centre legal director Daniel Webb told The Canberra Times the bill's wide application meant anyone with a WhatsApp account, criminal or not, could be watched.
Journalists and whistleblowers could also be negatively impacted, he said.
"Every increase in government surveillance has a democratic cost. The government was keen to just ram this bill through, but the committee has rightly acknowledged that the new powers go too far and need to be scaled back," he said.
"These bipartisan recommendations must be heeded - not only in the Identify and Disrupt Bill, but also as part of a wider overhaul of surveillance laws in Australia.
"We keep seeing new surveillance law after new surveillance law. But we can't keep marching towards increased government surveillance without comprehensive safeguards to protect our democracy and human rights."
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