In the wake of the PRISM controversy, Labor government dropped its plan of implementing a law compelling phone and internet companies to retrieve or save their customers' information for up to two years of records. The shelving of the proposal was confirmed and announced by Attorney General Mark Dreyfus following a parliamentary committee seated mostly by the Australian Labor Party.

The proposal was strongly objected by private individuals seeing the proposed law of data retention as a way of invading their privacies. The proposed law was likened to the much controversial PRISM scandal. It is to be recalled that data retention was the root cause of the raucous investigations involving former NSA contractor Rdward Snowden which leaked classified information detailing US ' direct access to metadata of big telecommunications companies such as Verizon, AT&T and Sprint.

Atty. General Mark Dreyfus said that the government will "await further advice from the departments and relevant agencies and comprehensive consultation".

In a report from Australian Financial Review said that government agencies including the RSCPA retrieved metadata "more than 300,000" times. The retrieving of data can be done even without warrant. The agencies who had been proven to employ this tactic defended that these data were now becoming unattainable as phone and internet companies innovates their data recording systems.

What the Labor government proposes was that there should be an exclusive data retention committee that will only retrieve the customers' data when the need for investigation on serious crimes and security threats arise.

The proposed law sound reasonable but Labor Committee Chairman Anthony Bryne said that the shelving of the proposed law happened because the government refused to release a draft of the law legislation to be accessed by the general public.

He expounded that, "As you see from the events in America with prism, what has occurres is that the public must have confidence in its parliamentary oversight agencies, and so therefore the committee was extremely careful in putting forward a model for if the government shows... it is the government's decision to introduce intrusive powers."

The proposed law on enforced data detention was also strongly objected by civil liberty groups and the Greens arguing that the retrieving of customer's data without warrant infringed the rights of the Australians to privacy.

In an answer to the issue, Greens Communications Spokesman Scott Ludlam proposed a bill requiring all agencies to have a warrant ready before accessing metadata. The committee aimed for a legislation that will prevent security agencies from accessing private communications without a warrant and that metadata retrieved should not include the customer's browsing data. The committee also proposed that the government should reimburse all telecommunications companies that would have to establish a new software system for the data retention. The new system for metadata retention was approximately priced at $700 million.

Mr. Ludlam further appealed that any government should have public consultations as far as data retention is concern. This appeal was in line with previous reports accusing Australia of sharing metadata with US authorities.

In an interview with The Australian Financial Reviewer, "We don't know who the Attorney-general is going to be in three months' time. It would be more than appropriate for Shadow Attorney-general George Brandis to make the Coalition's position on this clear."

Liberal backbencher and former Attorney-general Philip Ruddock commented that the "government's handling of this matter has been appalling. I have long been of the view that terrorism is something that would remain with us far longer than we would like. I am not blowing any secrets when I say from newspaper reports there are suggestions that there are a number of Australians who have gone abroad to participate in these activities in Syria, that are being trained and prepared in a way which would make them, on return to Australia, highly susceptible to being engaged in terrorist activity here. All of the agencies reported believe that those are matters that they have examined."