The Claim
“Reduced the competitiveness of Australia's technology industry by passing laws which allow the government to force back doors into Australian software products, which makes foreign customers less likely to buy them. The same drop in sales that decimated Huawei is now hurting Australian companies.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The Coalition government did indeed pass the Telecommunications and Other Legislation Amendment (Assistance and Access) Act 2018 (TOLA), which gives law enforcement and intelligence agencies powers to require technology companies to decrypt communications or build new decryption capabilities [1]. The law creates three types of notices: Technical Assistance Requests (TARs - voluntary), Technical Assistance Notices (TANs - compulsory decryption), and Technical Capability Notices (TCNs - compulsory building of new decryption capabilities) [2][3].
Atlassian, a major Australian technology company, explicitly stated that "The Act's passage has significantly degraded the global reputation of the Australian tech sector" and noted anecdotal evidence of concerns from international customers about data security implications [1]. However, the sources do not provide quantified evidence of actual sales declines or revenue loss directly caused by the law.
The Huawei comparison is problematic. Huawei was banned from Australia's 5G network in 2020 by the same Coalition government, but this ban was not a consequence of the encryption law [4]. Rather, Huawei was banned specifically because the government assessed it as "likely to be subject to extrajudicial directions from a foreign government" presenting a national security risk [4]. The Huawei ban was geopolitical in nature, not related to encryption backdoors.
Missing Context
The claim omits several critical facts:
1. Labor Party Support: Labor did not oppose the encryption law when it was passed. The Atlassian article explicitly states: "The TOLA Act was rammed through Parliament back in late 2018. Under the laws as currently written... [followed by details]" and notes it was "very rushed." However, Labor ultimately supported the bill when it was passed in Parliament [5]. This is not a uniquely Coalition imposition - it had cross-party support.
2. Legitimate Security Justifications: The law was created to address the problem of "going dark" - where encrypted communications prevent law enforcement and intelligence agencies from conducting investigations into serious crimes and terrorism [2]. Law enforcement cited this as a necessary tool; the AFP's "Operation Ironside" used powers under TOLA to conduct one of the largest organized crime operations, resulting in 224 arrests in Australia [2].
3. Limited Evidence of Sales Impact: While Atlassian raised concerns and reported "anecdotal" customer inquiries, these are concerns and fears rather than documented lost sales. Atlassian noted: "our fear is that these questions are not ones that we will necessarily hear from customers and customers who shy away from our products or services may never tell us that it is due to TOLA" [1]. This is explicitly speculative, not evidence of actual sales decline.
4. No Statistical Data: The claim provides no actual data on Australian tech exports declining after the law's passage. The search results contain no statistics showing measurable revenue loss to Australian software companies attributable to TOLA.
5. Huawei is Not a Parallel Case: The Huawei ban was a separate geopolitical decision made 2 years after the encryption law, based on concerns about Chinese government control - not because of encryption backdoors or foreign distrust of backdoored systems. Countries around the world banned Huawei for the same national security reasons, independent of their own encryption laws [4].
Source Credibility Assessment
The original source provided is ZDNet, a reputable technology news outlet owned by Ziff Davis, generally known for balanced tech coverage [1]. However, the article quotes Atlassian, which as an interested party advocating against the law, has institutional motivation to frame the law negatively. The article does present the company's concerns fairly, but relies primarily on Atlassian's statements rather than independent verification of sales impacts.
Labor Comparison
Did Labor do something similar?
Labor did not pass equivalent encryption backdoor legislation, but they explicitly supported the Coalition's TOLA Act when it was voted on in Parliament in 2018 [5]. Labor's support was somewhat reluctant - party members raised concerns about privacy implications - but the party ultimately voted with the government to pass the law. This means Labor either agrees with the policy or accepted the Coalition's security rationale.
When Labor returned to power in 2022 under Anthony Albanese, they did not repeal or substantially amend TOLA. This suggests Labor accepts the policy as necessary, despite its controversial nature [2].
Balanced Perspective
While critics argue the encryption law damages Australia's tech reputation and competitive advantage, several important points deserve consideration:
Government's Position: The law was justified as a necessary tool to combat terrorism and organized crime in an era of mass adoption of end-to-end encryption that prevents law enforcement access [2]. Without the law, agencies argue they cannot investigate serious crimes.
Cross-Party Support: This was not a unilateral Coalition decision - Labor agreed to the law, suggesting broad consensus on its necessity among Australia's political establishment [5].
Limited Concrete Evidence: The claim asserts sales damage as fact, but the evidence is speculative. Atlassian's own testimony acknowledges they don't have hard data on customers avoiding their products specifically because of TOLA. Some customers may have concerns, but this hasn't translated to documented mass defection [1].
Huawei Distinction: The claim conflates two separate government actions. The Huawei 5G ban was a geopolitical decision made years later, based on concerns about Chinese government control, not a consequence of the encryption law. Most countries (US, UK, Canada, etc.) also banned Huawei independent of their own encryption policies [4].
Tech Industry Response: While Atlassian raised concerns, there is limited evidence of broader Australian tech sector exodus or customer flight. Australian tech companies continue to operate internationally. No mass business failures or revenue collapses have been documented [1][2].
International Context: Australia was not alone in pursuing encryption access. The Five Eyes alliance (US, UK, Canada, Australia, New Zealand) has all pursued similar "lawful access" frameworks, and the US continues to pressure tech companies on encryption access [3].
PARTIALLY TRUE
5.0
out of 10
The core claims contain kernels of truth but are significantly misleading in framing and unsupported in key assertions:
- TRUE: Coalition passed TOLA enabling encryption backdoors [1][2][3]
- TRUE: International tech companies have expressed concerns about the law's impact [1]
- PARTIALLY TRUE: There are concerns about Australia's tech reputation, but limited evidence of quantified sales damage [1]
- FALSE: The Huawei comparison is misleading - the Huawei ban was a separate geopolitical decision unrelated to the encryption law [4]
- MISLEADING BY OMISSION: Labor supported the encryption law in Parliament [5], making this a cross-party policy, not uniquely Coalition
The claim cherry-picks concerns raised by one company (Atlassian) and presents them as established facts about industry-wide damage, while omitting that Labor supported the law and that international consensus exists on needing encryption access for law enforcement. The Huawei comparison is factually inaccurate - it conflates encryption backdoors with geopolitical tech bans.
Final Score
5.0
OUT OF 10
PARTIALLY TRUE
The core claims contain kernels of truth but are significantly misleading in framing and unsupported in key assertions:
- TRUE: Coalition passed TOLA enabling encryption backdoors [1][2][3]
- TRUE: International tech companies have expressed concerns about the law's impact [1]
- PARTIALLY TRUE: There are concerns about Australia's tech reputation, but limited evidence of quantified sales damage [1]
- FALSE: The Huawei comparison is misleading - the Huawei ban was a separate geopolitical decision unrelated to the encryption law [4]
- MISLEADING BY OMISSION: Labor supported the encryption law in Parliament [5], making this a cross-party policy, not uniquely Coalition
The claim cherry-picks concerns raised by one company (Atlassian) and presents them as established facts about industry-wide damage, while omitting that Labor supported the law and that international consensus exists on needing encryption access for law enforcement. The Huawei comparison is factually inaccurate - it conflates encryption backdoors with geopolitical tech bans.
📚 SOURCES & CITATIONS (5)
-
1
zdnet.com
Startup darling has taken further aim at the TOLA Act, echoing calls for the warrant process to have independent oversight.
ZDNET -
2
csis.org
This piece provides a timeline and overview of Australia's encryption legislation amid new debates of its effectiveness in intelligence and law enforcement.
Csis -
3
schneier.com
In 2018, Australia passed the Assistance and Access Act, which—among other things—gave the government the power to force companies to break their own encryption. The Assistance and Access Act includes key components that outline investigatory powers between government and industry. These components include: Technical Assistance Requests (TARs): TARs are voluntary requests for assistance accessing encrypted data from law enforcement to teleco and technology companies. Companies are not legally obligated to comply with a TAR but law enforcement sends requests to solicit cooperation. ...
Schneier on Security -
4
apnews.com
Chinese-owned telecommunications giant Huawei has been blocked from rolling out Australia's 5G network due to security concerns.
AP News -
5
australia.isidewith.com
Labors most recent platform and policy on Backdoor Access to Encrypted Communications in 2026. In response to the question “Should the government require tech companies to provide backdoor access to encrypted communications for national security purposes?”, Labors response was...
iSideWith
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.