The proposed data retention scheme is mainly focus to provide police agencies of clear back picture of crimes committed, Attorney-General Nicola Roxon said in a letter forwarded this week to the joint parliamentary committee.

Under the laws, local telcos and other internet service providers will be required to maintain communication logs, voice and data, of their subscribers for two years, which authorities can access while probing criminal and terrorism cases.

The arrangement, Ms Roxon stressed, will not compromise customers' privacy, adding that Australian law enforcement agencies were more concerned on scrutinising information about a given communication and not its contents.

If ever the latter becomes a necessity, "access to the content of communication is only ever carried out under warrants issued in accordance with the Telecommunications (Interception and Access) Act 1979. There is no intention to alter the requirement for warranted access to the contents of communications," Ms Roxon assured in her letter.

In a report by ABC on Friday, the Australian Security Intelligence Organisation (ASIO) confirmed that the data that would aid its operations are limited only to the following concerns: identifying information about the sender and receiver, the date and time of the communication, its duration, location and type of communication.

Apart from giving specific clues, analysis of the information would allow the government to track down terrorist activities and foil their planned attacks prior to execution, the ASIO said.

The local spy agency admitted too that its functions would be bolstered by data retention, meaning it will enjoy stronger intelligence gathering capability, which it said will be matched with the required responsibility on the part of ASIO officials and operatives.

ASIO will back the inclusion of new penalties in the laws for those who will abuse the powers that will make up the country's national security legislation, ABC said.

Federal authorities, according to Mr Roxon, would merely want to give law enforcement agencies more teeth in unearthing the mysteries surrounding crimes like murder or even corruption committed by those in power.

"For Australia, the principal argument in favour of a data retention scheme is to maintain our agencies' access to a critically important source of intelligence and evidence," the AG was reported by Computerworld Australia as saying on Thursday.

"Agencies have indicated that the need to access this information is immediate and that the eroding of such access is seriously affecting agency investigations," she added in the letter.

The letter also cited the European model of the scheme but Ms Roxon said the government has yet to decide on the specific form of Australia's version.

The local telecommunications industry, however, is apprehensive that the measures, once implemented, would lead to unnecessary expenditures.

Optus, according to ABC, has indicated that keeping customer records on company database for too long would not come cheap while both the Australian Mobile Telecommunications Association (AMTA) and the Communications Alliance have both informed the parliamentary inquiry that the undertaking would certainly be expensive.

In a joint submission by the two industry groups, it is projected that data retention would at least require $500 million, Computerworld Australia said.