Clare O'Neil announces major cyber incident exercises to begin in fight against cyber attacks

Home Affairs Minister Clare O'Neil announced government and industry will begin running the exercises "systematically" and "frequently" as Australia awakes from its cyber slumber in an address at the Sydney Dialogue forum on Tuesday.

The minister warned she did not want to be alarmist but said worst-case scenarios, such as cities being held hostage by foreign interference operations, had to be considered.

The test runs will deal with responses to cyber attacks cover incidents from large-scale data breaches to the failure of critical infrastructure or integrity attacks on critical data.

Those under national critical infrastructure laws will be expected to join in with the support of the department's Cyber and Infrastructure Security Centre.

"I've said Australia is waking up from the cyber slumber, but now we need to hit the gym," Ms O'Neil said.

"This exercise series will build muscle memory in how to deal with a cyber attack - and importantly cover the types of incidents we have not yet experienced on a national scale - such as a lock-up of critical infrastructure or integrity attacks on critical data.

"I have no doubt we will discover some areas where we need to train harder on incident response ensuring plans don't just sit on the shelf or finding where vulnerabilities exist. Being forewarned is forearmed."

Ms O'Neil said some of the dystopian scenarios Australia faced included quantum-powered decrypting, data integrity attacks, and interconnected cities being hacked.

"Part of waking up from the cyber slumber is waking up to this reality: the harm and inconvenience wrought by huge data leaks through the exploitation of basic vulnerabilities from actors ranging from the proverbial teenager in a faded black hoodie in mum and dad's basement to high end threats is a big national problem," she said.

"But the truth is, we face a scale and intensity in the threat landscape that far outstrips the recent cases we have seen."

It follows a February announcement to establish a national cyber security office within the Home Affairs Department tasked with being the central point for large-scale cyber attacks.

A cyber security co-ordinator is also expected to be appointed to oversee the work being done to prevent online attacks, as well as help manage data breaches when they take place.

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Ms O'Neil also said she was working with Finance Minister Katy Gallagher to develop a national digital ID network.

The myGov ID system allows users to verify their identity in one spot in order to use government services online.

If expanded, the ID system could be used as verified identification to use private services.

"This will streamline transactions and reduce the need for companies to hold unnecessary data, and where they do hold personal data, ensure it has the highest level of protection," Ms O'Neil said.

"Ultimately, this is all about making Australian identities hard to steal and, if compromised, easy to restore."