A push to compel Australia's telecommunications companies to install spyware on customers' phones under broad new security plans could be "severely damaging" to the country's cybersecurity, the industry has warned.

Telcos are part of an expanded group, which includes device makers like Apple, search engines like Google, and social media apps like Facebook, which could potentially be compelled to help federal authorities gain access to encrypted communications, according to submissions made on a draft bill currently before parliament for consideration.

Minister for Home Affairs Peter Dutton. Credit:Alex Ellinghausen

"Agencies could oblige a device manufacturer to preload (and then conceal) tracking or screen capture software (spyware) on commercial handsets which could be activated remotely," said a joint submission lodged by the Communications Alliance (the representative body for Telstra, Optus and device manufacturers like Nokia and Huawei), the Australian Information Industry Association and the Australian Mobile Telecommunications Association.

"The lack of clarity and detail raises significant concerns around intent, actual implementation and, ultimately, legislative overreach."