The warning came jointly from the Australian Industry Group, the Australian Information Industry Association, the Australian Mobile Telecommunications Association and Communications Alliance in a submission to the Parliamentary Joint Committee on Intelligence and Security.
These industry groups represent most of Australia's $100 billion ICT industry.
In its submission, the groups pointed to issues in the Telecommunication Sector Security Reform (TSSR) legislation, recently introduced to Federal Parliament.
The groups praised the government for a number of useful amendments to earlier drafts of the legislation, after receiving advice from industry.
They also acknowledged that critical infrastructure, including telecommunications services and networks, was at risk from espionage, sabotage and foreign interference, and companies have a commercial motivation to harden and protect their networks.
The groups warned that onerous, one-way notification requirements would affect responsiveness of service providers to cyber threats and asked the government to consider more collaborative, effective approaches, as adopted or contemplated in the US, UK and Canada.
The proposed TSSR regime “may in fact divert scarce resources away from investing directly in addressing cyber security threats, to compliance overhead arising from the regime. It may reduce the ability for the ICT industry and its clients to proactively monitor and quickly respond to threats and breaches”, the submission stated.