Senator the Hon Katy Gallagher

SARAH FERGUSON, HOST: Katy Gallagher is the Finance Minister responsible for Services Australia. She joined me earlier. Senator Gallagher, welcome to 7.30.

KATY GALLAGHER, MINISTER FOR GOVERNMENT SERVICES: Thanks for having me on.

FERGUSON: Is this the first time that an AI agent has breached a government website, as far as you know?

GALLAGHER: Yes, that's right, as far as I know. I've been advised that is the case. Obviously, you know, this is new and emerging technology and I think this example, the situation that's occurred in relation to OpenAI's agent coming into, in an unauthorised way, the Medicare Statistics Reporting Portal gives us an opportunity really to go back and have a look at everything and really investigate this incident in a forensic way so we can learn from it, take the learnings from that and protect our systems even further.

FERGUSON: Just to understand what we know already, there have been reports that this may be connected to another incident involving OpenAI agents, who swarmed onto a German website and while on that website, used the website to plot their assault on Australian websites. Do you know whether these two events, using the German website and the breach of the Australian government website, are connected?

GALLAGHER: Well, that is not information that's been provided to us at this stage, but we are in open dialogue and constant dialogue with OpenAI. They are assisting us and they are providing information, including technical logs around what they understand to have occurred, to assist us in going back and looking at what happened with us. We know from what they have advised us, their agent was given a task, which was to go and investigate the cost of health care and provision of health care across the internet. That is how it's found its way to the Medicare statistics reporting website and that is where this incident has occurred. Thankfully, in a very, you know, in a safe part in the sense that there's no personal information, there's no privacy breach as we understand it from the information available to us at this point in time. And it's a public-facing website with publicly accessible information.

FERGUSON: We understand from OpenAI that they think it's perfectly reasonable to have communicated the news of this breach via a public email. Do you accept that?

GALLAGHER: Well, no, we don't. And we've made that clear to OpenAI and said that we expect, and this is part again that the PM will look at through his taskforce, is looking at what are the systems we need in place for mandatory notification, and what are the penalties and associated costs of not following those procedures. It's clear that we need those in place. We can't have a situation where something happens on 18 June and it takes that long to be notified. And even when you're notified, you're notified to essentially a public email box. We strongly believe that this should have been reported, particularly into ASD or at very senior levels of Services Australia. That wasn't the case.

FERGUSON: And that's the Australian Signals Directorate, just for the audience. Why did it take four days for Services Australia to report the breach to ASD, and why weren't you told at the same time?

GALLAGHER: Yes, these are all very legitimate questions that I have asked as well. And look, part of the review that Services Australia are doing is going back and looking at really the escalation of this issue from the point of notification. It came in overnight or in the late afternoon of 10 September to Services Australia. It was picked up on the 11th. That email is monitored daily. So, it was picked up the next day. And then really, you know, the questions I have is, you know, was it escalated in a timely fashion, did people identify it as of the seriousness that it deserved? But certainly by the 14th, when the technical experts at Services Australia were going back to verify the information in that email, they did that on that day and notified ASD the next day. Of course, I have raised concerns myself with not being alerted until the 17th and I think Services Australia accept that. But from, you know, I think some of the assurance I think they've given and I took once I was notified was that there was no immediate threat, there was no personal information, there was no ongoing threat. This was something that had happened some months ago to a public-facing website. But still we have to work through all of those issues very closely.

FERGUSON: The Prime Minister knew at the weekend, why did he wait until today to release it publicly?

GALLAGHER: So, we've been doing an enormous amount of work. I mean, we wanted to come out and be as upfront and transparent as we could be. So, part of that was understanding the information and exactly what had happened. That really wasn't fully understood and it's still, we've still got a way to go. I want to make clear that we've got the initial information through that technical exchange happened on Tuesday. We would take the Deputy Prime Minister, myself and the team over in New York were still taking advice from some of our security agencies up to and including last night. So, I really think we were in, overnight for the Prime Minister and today, for the Deputy Prime Minister and myself, it really was the first opportunity where we were able to come out and give the public and the media, who we knew would have lots of questions, as comprehensive a briefing as we are able to at this point in time.

FERGUSON: Nonetheless, it seems like a long time elapsed between you being made aware and the Prime Minister making this public. It's not the most egregious, not the most complex breach in recent history. Couldn't he have done it earlier?

GALLAGHER: Look, as I said, I mean, I've been involved with this closely since Thursday night. The information that I received on Thursday and Friday did not give me a complete picture of what has happened, nor did it give me the opportunity at that point to have been briefed by ASD, who were also involved at that point, and to have the necessary discussions with the Deputy Prime Minister as Acting Prime Minister and Minister Burke as Minister for Home Affairs. All of that happened in the lead-up to the technical exchange of information. But really that was required to understand and to be able to provide the assurance, and I've seen some conflating of this today, where people are saying the agent was attacking Medicare. It was not attacking Medicare. It was accessing information through the Medicare statistics reporting portal. And so being able to give that assurance to people that it wasn't one of the systems of national significance, you know, one of those critical government systems was really essential as part of coming out and explaining what we understand right now to have happened.

FERGUSON: Do you accept that both an event like this, the time it took for OpenAI to inform the Australian government, undermines Australians' trust not just in the notion of artificial intelligence, but particularly in the presence of data centres in Australia?

GALLAGHER: Look, I accept people will look at this story and be worried about it, which is partly why we needed to get all the information we could and come out and provide that information in a reassuring way. OpenAI are working with us. They came to us with this incident and we appreciate the fact that they are sharing information with us. But, I mean, this is the whole point why the Prime Minister, some months ago, kind of set out the fact that we need guardrails, we need protections, we need standards, and, you know, when it comes to data centres, we need commitments around energy. We need to be making these rules not just here, but around the world, which is why those discussions in New York are important. And I think this incident gives us a huge opportunity to make sure that all of that work in the lead-up to regulating or legislating is being addressed through a real live incident that has happened here on one of our websites.

FERGUSON: Senator Gallagher, thank you very much indeed for joining us.

GALLAGHER: Thank you so much.