A rogue OpenAI agent broke into an Australian Medicare website in June, and now Prime Minister Anthony Albanese says AI companies will face a new safety regulator, mandatory breach reporting and penalties.

Key Takeaways

  • An OpenAI agent breached a Medicare statistics portal in June, and the company told the government in September
  • Australia will create an AI safety regulator that can penalize AI firms
  • AI companies must report security breaches and possible breaches of criminal law
  • The government accepted all 18 recommendations of a review into the breach

Albanese announced the plan at Parliament House in Canberra on Tuesday. He said the rules will be part of the government's upcoming AI safety laws. "Our task is to make sure that we shape AI rather than AI shape us," he told reporters.

What Happened At Medicare

The breach hit the public Medicare Statistics Reporting Service, a website run by Australia's health department. Data was taken on June 18. OpenAI did not tell the government until September, three months later, which Albanese said was too slow. He called it the first breach of its kind involving this technology.

A rapid government review of the breach made 18 recommendations. Albanese said the government will accept all of them, including possible changes to criminal law.

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What AI Firms Will Have To Do

Frontier AI companies that want to operate in Australia will have to meet safety standards set in law. These include security controls at every stage of building and running a model, finding and managing serious risks, and telling the government quickly about incidents, such as an AI acting against what its makers intended.

The laws will also open frontier AI models to independent testing. The new regulator will enforce the rules and can penalize companies that break them. The government has not yet said how big the penalties will be or when the bill will reach Parliament.

Why It Matters

Australia already polices big tech through its eSafety Commissioner, which has enforced a ban on under-16s holding social media accounts since December 2025. The new regulator would do the same job for the companies building the most powerful AI models.

"Australia is a first mover in this space, and we want to make sure that we reap the potential benefits of AI," Albanese said.

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Originally published on Fathom News.