The bill, staunchly opposed by the tech giants which fear Australia could be an example as other nations explore similar rules, is set to become law before the end of the year.
“Let’s just make Australians safe over Christmas,” opposition Labor party leader Bill Shorten told reporters outside parliament in the capital of Canberra.
The bill, passed by the lower house of parliament earlier on Thursday, was to be debated in the upper Senate, where Labor said it intended to suggest new amendments, before going back to the lower house.
In an eleventh-hour twist, Labor said that despite its reservations, it would pass the bill in the Senate, on the proviso that the coalition agreed to its amendments next year.
“We will pass the legislation, inadequate as it is, so we can give our security agencies some of the tools they say they need,” Shorten said.
The bill provides for fines of up to A$10 million ($7.3 million) for institutions and prison terms for individuals for failing to hand over data linked to suspected illegal activities.
When it becomes law, Australia will be one of the first nations to impose broad access requirements on technology firms, after many years of lobbying by intelligence and law enforcement agencies in many countries, particularly the so-called Five Eyes nations.