The agency that oversees Australia's intelligence and security organisations says it will need more funding if the Government pushes ahead with controversial changes to national security laws.

As part of the proposal, phone and internet companies would be required to keep logs of internet sites and phone calls made by their customers for several years instead of regularly deleting the data.

The data retention plan has come under criticism from privacy advocates and online groups despite repeated government assurances there would be strict privacy measures in place.

The Inspector-General of Intelligence and Security, Vivienne Thom, whose job involves monitoring the activities of national security agencies, says her particular interest in the proposal is to make sure there is "sufficient weight" on maintaining people's privacy.

"The proposed reforms are not insignificant, and continuing proper oversight will be essential if Parliament and the public are to be assured that agencies use these powers appropriately," Ms Thom wrote in a submission to the parliamentary committee considering the idea.

"Although current funding for the office is adequate, the proposed reforms would require additional funding for the office to continue to perform its role effectively."

Labor has moved to reassure the community that the content of emails, text messages and phone calls will not be recorded.

Attorney-General Nicola Roxon insists she has not made a final decision on whether to push ahead with the data retention plan, but has written to the parliamentary committee suggesting it look at how the system works in Europe when considering whether Australia's laws need changing.

"The reasons for the implementation of the [European scheme] are explained in the preamble to the [European Union] directive as a response to terrorist attacks in Europe [particularly, the Madrid and London bombings]," Ms Roxon wrote in the letter.

"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."

'Surveillance'

The committee assessing the proposed changes received 201 submissions from government agencies, members of the public and privacy advocates.

The Greens have previously described the proposal as "real-time surveillance" of anyone living in Australia, but Ms Roxon says that is not true.

"I want to make sure that our police and national security agencies can keep up with rapidly evolving technology and the new environment," Ms Roxon said in a statement to the ABC.

"Of course, we must also have the right checks and balances in place to ensure that national security powers are not abused and that Australian's privacy is respected."

In a submission to the committee, the Australian Federal Police have backed the proposed changes, arguing the technological changes that have taken place in the past decade have increasingly undermined the existing laws.

It says the data retention proposal would not give the agency new power, rather it would ensure existing capabilities are protected in a changing telecommunications environment.