Industry lashes encryption laws: Survey

James Riley
Editorial Director

One year after the passage of the controversial encryption laws, the technology sector has almost universally rejected the regime as having had a negative impact on Australia’s reputation, and making it less likely that companies would conduct development operations in Australia.

In an industry survey conducted by InnovationAus in conjunction with the Communications Alliance, StartupAUS and the Information Technology Professionals Association (ITPA), 51 per cent of respondents said the legislation had a “very negative” impact on Australia’s reputation, while a further 44 per cent said it had “somewhat negative” impact.

That is 95 per cent of the respondents to this survey felt the law had a negative impact on Australia technology companies in global markets. This is a huge concern.

Sydney traffic busy lights
Encrypted traffic

An incredible 61 per cent of the survey participants said they had customers who had expressed concern to them about the impact that the laws would have on their products and services.

The Industry Pulse – Encryption Laws survey was conducted to coincide with the one-year anniversary of the legislation being passed on the final sitting day of the Parliament in 2018. It opened on Thursday 5 December – the final sitting day of the 2019 Parliamentary year – and closed at midnight on Thursday 12 December.

The survey attracted 70 respondents, of which 42 per cent were founders, CEOs or managing directors, and 68 per cent were from Australian headquartered technology companies.

The results speak for themselves and should give policymakers cause for concern at the depth of feeling among the industry about the negative and unintended commercial consequences of the laws.

Some 40 per cent of survey respondents reported that they had lost sales either in Australia or in export markets as a direct result of the new laws, with others saying it was too early to quantify the commercial impact.

Of greater concern to those interested in building a stronger Australian software sector – particularly in cyber – is the impact on the encryption laws on development operations in Australia.

Some 57 per cent of respondents said they were less likely to conduct development in Australia as a result of the passage of the laws. And 51 per cent of companies that perform development work in Australia said they were now less likely to employ more developers in this country.

InnovationAus publisher Corrie McLeod said the Industry Pulse survey provided a voice to the Australian industry to tell the real story of the business impact of this controversial legislation.

“Given the nature of the legislation it can be very difficult to get a good picture of what the impact of the TOLA (Access and Assistance) Act has been on the Australian tech industry,” Ms McLeod said

“We’ve seen throughout the consultation process, and the weeks and months following the passing of the bill, that many organisations directly affected by the legislation were concerned about speaking publicly about the negative impacts,” she said.

“Encrypted communication is a huge issue for law enforcement and the balance between citizen privacy and effective policing of criminal activity is top of mind for governments, technology companies, citizens and privacy organisations all over the world.

“These are not straight forward challenges. The purpose of this survey is to inform the discussion about the impact of the legislation on the Australian tech sector and provide the view from our industry,” Ms McLeod said.

You can download the survey result here.

Do you know more? Contact James Riley via Email.

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