AUSTRALIA'S security and law enforcement agencies are world leaders in telecommunications interception and data access and like most successful industries, they want more. Federal Attorney-General Nicola Roxon is canvassing a further expansion of surveillance powers, most controversially a requirement that telecommunications and internet service providers retain at least two years of data for access by government agencies.
Security and privacy are in the balance as the Federal Parliament's secretive joint committee on intelligence and security considers Australia's future digital surveillance regime.
Australia was slow to get into the business of telecommunications interception. Alexander Graham Bell's invention was nearly 70 years old before Australian security authorities took advantage of the telephone as a surveillance device. But since then they've never looked back.
David Forbes Martyn was a highly accomplished Scottish physicist who brought radar technology to Australia in 1939. He was the first chief of CSIRO's radiophysics laboratory at Sydney University, a fellow of the Royal Society and a founder of the Australian Academy of Science. He delivered the first ABC Boyer Lectures.
Martyn also had the unfortunate distinction of being a target of the first telephone tapping and bugging operation by an Australian security agency nearly seven decades ago.
Despite playing key roles in Australian defence science in World War II, his loyalty came under suspicion owing to his friendship with two women, one of whom was suspected by military intelligence, on little more than gossip, of being a Nazi sympathiser, if not an actual spy.
In early 1944, Brigadier Bill Simpson, director-general of the wartime Commonwealth Security Service, ordered the interception of Martyn's phone, the phone of his fiancee, Margot Adams, and installation of listening devices in the Sydney apartment of their close friend, Shanyi Maier, the Chinese wife of a German internee and alleged femme fatale.
By today's standards, the operation was incredibly primitive. There were no recordings. Security officers would take a trip to the local telephone exchange, sit with a switchboard operator who inserted a special plug to enable them to hook into the phone line and take notes as they listened in on the conversation.
Other agents sat in a room above Maier's apartment and listened through headphones to two microphones, one placed in the living room, the other in her bedroom.
For five months the Security Service listened to conversations such as ''I'm going down to the wine shop, should I get one or two bottles of red?'' and tried to work out if a word such as ''red'' was some sort of code. They eavesdropped as Martyn and Adams discussed their wedding plans. They also listened intently to Maier's love life and most intimate moments, filling voluminous files with verbatim transcripts.
But she was no spy. Six decades later the files were transferred to the National Archives and made publicly available. Long divorced, remarried and widowed, Shanyi Balogh, as she was then, was still alive and well, and living in the same apartment. She read some of the transcripts with deep distress, indeed broke down and cried at the violation of her privacy.
Australia's first technical surveillance operation was judged a success, even though nothing of security significance was uncovered. Brigadier Simpson thought the exercise had been ''first class from a technical viewpoint''.
There was no espionage, either. However, Martyn's career was severely damaged by suspicions that the Security Service never thought necessary to dispel. Many years later, embittered and in deteriorating mental health, he was consumed by constant fears that he was under surveillance and took his own life.
The Security Service's successor, the Australian Security Intelligence Organisation, quickly turned to telephone interception in its post-war investigations of Soviet spies in Australia. There was no legal authority for what were called ''special facilities'', but Labor prime minister Ben Chifley gave the go ahead in July 1949 for ASIO to tap the phone of Walter Clayton, an Australian Communist Party operative suspected, rightly, of being involved in Soviet espionage.
Within a year ASIO was phone-tapping 14 people. By the end of a decade they had tapped 174 telephones, mainly belonging to Soviet diplomats and Australian communists.
Anxious to put this growing surveillance activity on a legal footing, attorney-general Sir Garfield Barwick presented a top-secret submission to the cabinet of Sir Robert Menzies in February 1960.
''The usefulness of interception of telephones by the Security Service is undoubted,'' Barwick wrote. ''[T]he obtaining of factual evidence of subversion, espionage and sabotage is one of the most difficult aspects of investigation … One of the most vulnerable points in so far as the detection of these activities is communication … Telephone and mail interception, therefore, become of paramount importance.''
Barwick referred to the ''natural disfavour, not to say aversion, with which people regard this form of assault on the privacy of the telephone'', but concluded that interception was ''indispensable to the security of the nation.''
There were to be legislative safeguards. Subject to authorisation by warrant from the attorney-general, intercept operations were only to be carried out by ASIO for national security purposes. ''In my opinion, it is quite clear that the Commonwealth cannot carry the responsibility of providing telephone [intercept] facilities for state purposes - even for the detection of crime,'' Barwick added.
One hundred and sixty warrants were issued for interception operations, codenamed ''Bugle'', over the next 12 years. When the Whitlam Labor government took office in December 1972, 52 warrants were in force, mainly covering the USSR embassy in Canberra, Soviet bloc diplomats and Australia's feuding communist and socialist parties. Labor parliamentarians often featured in intercept transcripts thanks to their contact with communist union officials and Soviet diplomats. ASIO tapped the phone of Labor Senate leader Lionel Murphy's secretary who was having an affair with a Soviet diplomat who was a senior KGB officer.
Prime minister Gough Whitlam revoked all warrants and, after a review, attorney-general Murphy approved 29 new warrants for Soviet bloc diplomats, Croatian nationalist extremists and pro-Palestinian groups supportive of terrorist activity.
Under prime minister Malcolm Fraser, ASIO interception operations were extended to again cover Australian communist party members, anti-US alliance protesters, as well as Bill Hartley, a prominent member of Labor's socialist-left faction, a pro-Palestinian activist and paid agent of the Iraqi intelligence service.
More significant in the longer term was the Fraser government's legislation in 1979 to allow interception by the Commonwealth Police, now the Australian Federal Police, to cover the narcotics trade and wider criminal activity. Revelations that the NSW Police had for many years conducted numerous illegal phone taps eventually led the Hawke Labor government to legislate to empower state police to undertake lawful interception operations.
Aside from ASIO and the AFP, 15 police, anti-corruption and police integrity agencies now conduct telecommunications interception under warrants from judges or members of the Administrative Appeals Tribunal.
In 1996-97, law enforcement agencies carried out 675 phone taps. By 2001-02 the annual number had grown to 2157. The most recently published figures show the number of warrants had risen to 3488 in 2010-11 - a five-fold increase since the beginning of the Howard government. (Figures for ASIO's intercepts are classified and will only become available from the National Archives after more than 20 years.)
Also, 588 federal listening and tracking device warrants were issued in 2010-11 - a 43 per cent increase on the figure two years earlier.
This is an Australian growth industry. Telephone tapping and bugging have become routine investigative tools. Indeed, published statistics show that Australian law enforcement telecommunications interception activity is greater both in absolute and relative terms than that undertaken in the United States.
American federal and state judges issued only 1491 wiretap authorisations for law enforcement purposes in 2001. By 2011 the US figure had risen to 2732 warrants. Taking into account the difference in population between Australia and the US, the per capita rate of law enforcement telephone interception in Australia is 18 times greater than that in the US.
Australian law enforcement and government agencies are also accessing vast troves of phone and internet data without warrant. Indeed, they did so more than 250,000 times during criminal and revenue investigations in 2010-11. Comparative statistics suggest this is a far greater level of telecommunications data access than that undertaken in the US, Britain or Canada.
Data accessed includes phone and internet account information, outwards and inwards call details, internet access, and details of websites visited, though not the actual content of communications.
Federal government agencies gaining access to such data include ASIO, AFP, the Australian Crime Commission, the Tax Office, the departments of Defence, Immigration and Citizenship and Health and Ageing, and Medicare. Data is also accessed by state police and anti-corruption bodies, state government agencies, local government bodies and even the RSPCA.
Telecommunications data now accessible without warrant also includes location data, which can be accessed both historically and in real time. Few Australians would have agreed two decades ago to carry a government-accessible tracking device, but that is precisely what they do when carrying a modern mobile phone or tablet.
It is against this background of a world-class surveillance regime that Attorney-General Roxon recently echoed her conservative predecessor, Sir Garfield Barwick, saying further expansion of surveillance and data access is required to ensure national security and community safety.
According to Roxon, action is required to ensure that ''vital investigative tools are not lost as telecommunications providers update their business practices and begin to delete data more regularly and more Australians communicate online in a wider variety of ways''.
''The loss of this capability would be a major blow to our law enforcement agencies and to Australia's national security.''
The Attorney-General says she hasn't made up her mind on all the latest proposals, and her referral of the matter to a parliamentary committee is likely to delay a decision and implementation until next year, probably after the next federal election.
But in nearly 70 years, Australia's surveillance industry has never taken a step backwards.
In today's world of email, text and internet chat, Facebook and Twitter, electronic business transactions and ever wider CCTV coverage of business premises and public spaces, almost every aspect of people's daily lives will soon be recorded electronically in one medium or another.
With the costs of data collection and storage continuously falling, all-encompassing surveillance will be achievable at the touch of a button.
The pull of technology and push of security will continue to radically diminish the realm of privacy. In some ways we will be ''safer'', but privacy will be at the discretion of law enforcement, security and bureaucrats. With that will come a profound, qualitative change in the relationship between citizens and government that is yet to be considered by Parliament or the public.
All this is a long way from the first, primitive surveillance operation directed against David Martyn, Margot Adams and their friend Shanyi Maier nearly seven decades ago. From little things big things grow.