SHADOW ASSISTANT MINISTER FOR COMMUNICATIONS
SHADOW ASSISTANT MINISTER FOR CYBER SECURITY
MEMBER FOR GELLIBRAND
LOWY LECTURE SERIES: DEMOCRACY AND THE AUTHORITARIAN CHALLENGENATIONAL PRESS CLUB, CANBERRA
THURSDAY, 27 FEBRUARY 2020
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Working in cyber security today can sometimes feel like being stationed in East Berlin during the Cold War.
In recent years, we've seen state sponsored hacking groups with exotic names like Cosy Bear, Sandworm and the Lazarus Group successfully hack multinational banks, presidential campaigns and power grids.
We've seen an 'entity' named Phineas Fisher hacking Cayman Island backs and then using the proceeds to set up a 'Hacktivist bug hunting program' - a bounty for public interest hacks targeting companies working in surveillance technology mining and resources.
We've seen very well-resourced international crime syndicates mount a wave of ransomware attacks - hacks that seize control of an organisation's IT systems until a bitcoin ransom is paid - against over 1000 schools, hospitals and local governments in the US causing worldwide losses of over a billion dollars in 2019 alone.
There's a bit going on.
But I find that I spend most of my time in this portfolio pondering a less dramatic and more earnest question - the health of our democracy.
This is a new thing for someone of my generation.
My earliest political memory is the fall of the Berlin wall.
I was in Grade 2.
I can remember sitting cross-legged in a classroom while our teacher showed us a tape of a television news broadcast of people tearing down the wall.
I understood something important was going on, but I had no idea what it meant.
People of my generation - Gen Y - grew up in the most benign international security and economic environment in Australia's history.
A generation of peace and growth.
A world in which US hegemony within a rules-based international order was the default.
A world in which the internet proliferated in accordance with the norms of Western societies and economies - open and free from centralised government control.
A world which prompted the political scientist Francis Fukuyama to famously declare the "end of history".
After September 11 2001, our complacency was challenged by the growing threat of Islamic extremist terrorism in the West, but even this threat was a challenge to our physical security, not our democratic system.
Today, though, the liberal democratic model itself faces its biggest challenge in generations.
Since the Global Financial Crisis, democratic systems have faced a crisis of public confidence, and open economies have struggled to deliver the broad-based growth of the past.
Significant minorities across the west simply do not believe that democracy is delivering for them and as a result, trust in our democratic institutions is collapsing.
At the same time, in several nations around the world, an alternative model of 'techno-authoritarianism' has emerged in which new tools of mass surveillance and artificial intelligence are being used to build systems of social control.
These technology-enabled autocracies are often states founded on Marxist principles of information control, where censorship and propaganda have long been core priorities of government.
This isn't like the Cold War.
These techno-authoritarian states are not trying to impose their system upon others.
However, we have seen some authoritarian states use their model of information control to pursue national objectives via the open internet of Western democracies.
For the first time in a generation, democracies are facing external threats to their sovereignty in the form of cyber-enabled disinformation campaigns and potentially, externally controlled censorship of widely used platforms for political communication.
Whether we can meet this challenge will depend on the resilience of our democratic institutions.
In this respect, we have a lot of work to do.
The most recent Australian Election Study from the Australian National University shows that faith in our political system seriously deteriorated since the Global Financial Crisis.
Indeed, the study finds that just one in four Australians have any faith in their political leaders or institutions.
That just 59 per cent are satisfied with how democracy is working - a collapse of 27 per cent since 2007.
In Australia, faith in democracy is in free-fall.
Professor Ian McAllister, who led the study, said: "I've been studying elections for 40 years, and never have I seen such poor returns for public trust in and satisfaction with democratic institutions."
Most disturbing are the findings of the Lowy Poll that less than two thirds of Australians believe that 'democracy is preferable to any other kind of government'.
That one in five Australians - and one in three Australians aged under 30 - believe that 'in some circumstances, a non-democratic government can be preferable'.
The causes of this loss of public trust and legitimacy are complex.
In my view, one reason is that politics has been unable to deliver on the things that really matter to people - like climate change, secure work and housing.
But it's important to appreciate that it is not just our 'political' institutions that are weakened, we've seen a collapse in public trust in nearly every institution in our democracy.
The institution that has experienced the greatest change has been our media.
The proliferation of the internet has radically transformed the Australian media system.
According to the Australian Election Study, between the 1969 and 2019 elections, the proportion of Australians who followed the campaign via television news fell from 60 per cent to 22 per cent.
For newspapers the fall was even greater, from 55 per cent to 11 per cent.
The driver of this change in media consumption is obviously the internet.
The internet hasn't merely changed the medium people use to consume media, it's radically changed the entire media ecosystem.
At its most fundamental level, the internet collapses transaction costs.
Transaction costs are the costs of finding people with shared interests and then working out a way to communicate and trust them so you can work together.
Twenty years ago, if I wanted to buy a car, I might incur the transaction cost of buying a newspaper and then flicking through the classifieds section to find a seller before picking up the phone and making an offer.
The transaction costs of buyers and sellers trying to find each other underpinned the 'rivers of gold' that cross-subsidised an advertising funded, independent journalism for a century.
That business model is gone now.
Disintermediated by internet platforms like carsales.com and domain.com that allow buyers and sellers to find each other directly, and more efficiently.
In its place is a model in which media outlets try to stay afloat via subscriptions and targeted advertising.
The editorial incentives of this model are different.
Instead of seeking to appeal to a broad base of readers (and classifieds bargain hunters), media outlets increasingly seek to serve political tribes.
What drives clicks and subscriptions among these tribes are culture wars notpublic interest journalism.
The media still does incredibly valuable public interest journalism to be sure - but it's not usually what makes them money.
In this respect, social media is even worse.
The collapse of transaction costs on social media platforms has allowed people to build communities of interest around every imaginable niche.
In an age of social media of course, it takes seconds to find a group of others who share your interests.
The problem is, these groups frequently comprise people who share and reinforce our biases.
The proliferation of Facebook groups and subreddits for ultra-niche in this new media environment might be mostly harmless, but groups for anti-vaxxers, white supremacists and Qano