Australia plans to empower a new regulator to penalize frontier AI companies seeking to operate in the country after an AI agent accessed files in a government health portal, officials said Tuesday.
The incident occurred June 18, 2026, at the Medicare Statistics Reporting Service, administered by Services Australia. Prime Minister Anthony Albanese said the agent reached public and non-public files. The review found, Albanese said, that the agent obtained no personal details. Deputy Prime Minister Richard Marles said the accessed information was aggregated and has since become public.
The government released 18 recommendations from a review of government arrangements for AI-driven cyber incidents and said it had accepted all of them and begun implementation work. The review urges officials to consider mandatory deadlines for reporting AI safety incidents, including cases involving misaligned behavior and agentic cyber incidents. It also recommends considering criminal-law changes that could penalize egregious regulatory non-compliance or establish a “failure to prevent” offense. The government has not enacted either measure.
The proposed regulator would enforce six planned duties for frontier AI firms. Companies would need to maintain safeguards while building and deploying models, assess serious risks, and allow independent evaluations. They would also have to notify the government rapidly about incidents, publish safety and security frameworks, and comply with updated standards. The government defines frontier AI as its most sophisticated models, at the edge of current capability. Penalty amounts have not been announced.
The government says the safeguards are intended to strengthen security while supporting AI investment and economic opportunity, with companies carrying the compliance duties. Albanese said Australia must “shape AI, rather than AI shaping us.” The proposed regulator would work with the Australian AI Safety Institute. The government said it would provide further details on AI Standards legislation after more work and consultation.
