Albanese couldn't have timed his Medicare hack bombshell better

Welcome back to your weekly federal politics update, where Courtney Gould gets you up to speed on the happenings from Parliament House.

Anthony Albanese couldn't have picked a better time to drop the metaphorical bomb that a rogue artificial intelligence agent breached an Australian government system.

The prime minister has been on the world stage all week, helping to push a statement by middle powers calling for greater safeguards and for AI to remain under human control.

The statement was almost immediately rejected by US President Donald Trump, despite the chief executives of AI companies agreeing a slowdown in the pace of development for the technology was required.

So, the prime minister's unexpected disclosure that an OpenAI agent had gained unauthorised access to a Medicare statistics website three months ago caused quite a stir, especially coming just an hour after the tech giant's chief executive Sam Altman warned about the need for "accurate and speedy" reporting of incidents.

The attack on the portal occurred back in June. OpenAI knew of the incident in August and only informed Services Australia – via an email to a public mailbox – two weeks ago.

"This situation is obviously unacceptable," Albanese told reporters in New York, where he has been attending the United Nations General Assembly.

A clearly frustrated Albanese said the Australian government could not find a precedent for the breach, although he stopped short of calling it a world first.

Who knew what, when?

After sitting on the news for more than a week, the government claims it wanted to get its ducks in a row before going public. The Australian Signals Directorate was given the heads up by Services Australia last Tuesday. The minister responsible, Katy Gallagher, was told two days later.

Albanese and his office were informed some time over the weekend. In the days since, the terms of reference for a rapid review into Australia's preparedness for an AI-driven cyber-attack were drafted. A phone call was organised with Altman.

During that phone call Altman acknowledged the actions of his company were not good enough. But he offered no apology.

In recent months, the government has been actively courting AI companies to invest in Australia. A report released this week on the outlook of the Australian economy over the next 40 years, the Intergenerational Report, underpinned just how important the government considers AI to our future economic growth.

It's a delicate tightrope the government is trying to walk — enticing tech companies to train their models here by considering scaling back Australian copyright while simultaneously advocating for more controls.

Richard Marles, who has been acting prime minister this week, met with Altman in San Francisco earlier this month. There was no mention of the hack at the meeting.

Marles, who was deployed to answer questions that trickled in over the course of the morning, said he wasn't sure what the OpenAI boss knew at the time of their meeting.

"What we would expect is that the government be notified in the most timely manner possible. And we have expressed our displeasure that that did not occur in this instance," he told reporters in Sydney.

That led to predictable criticism from those across the political aisle. Greens Senator David Shoebridge declared OpenAI treated the defence minister “like a mushroom”.  

"It's an insult not just to him, it's an insult to Australia that should not be left untouched," he said.

OpenAI's vice president of global policy Ann O'Leary was in Canberra last week. She didn't touch on it either. While that doesn't mean she knew and didn't pass the message along, as my colleague Stephen Dziedzic reported, it certainly has officials annoyed.

There are several questions yet to answer, such as whether an AI-driven attack like this would even break Australian law as it stands. That's something the rapid review, announced today, will be looking into.

All smiles for a selfie as daggers drawn

All of this took place in the shadow of the prime minister's trip to the United States, where he was escalating Australia's fight against the social media giants.

From Apple's campus in Silicon Valley to the Big Apple, Albanese has been talking up his government's social media ban for under 16s and spruiking the proposed digital duty of care bill.

The draft legislation would require the tech giants to pre-emptively address harms and pave the way for giving users a choice to opt out of the algorithm.

In a rare intervention the Trump administration described the proposal as "extraterritorial censorship of protected speech" and called for exemptions for US-based platforms.

If that sounds familiar, it's because the opposition has been running a similar line in recent weeks. The Coalition is concerned the bill hands the minister too much power to determine what constitutes online harm.

Albanese hit back at his first opportunity, dismissing the criticism. But he went beyond linking the legislation to the protection of children, pointing also to misinformation, disinformation and polarisation online — exactly the things the Coalition has been saying it was concerned about.

"The truth is, this is having an impact on our entire society and how it functions with misinformation, disinformation, with the increased polarisation that we're seeing as well in the political system, where people are moving away from the centre and more and more to the extremes, be they of the left or the right," he said.

Asked about the apparently off-the-cuff remarks on Thursday, Albanese denied linking misinformation and disinformation to the draft digital duty of care.

Despite daggers being drawn between Australia and the US on social media, Albanese and Trump still posed for a smiley selfie at a welcome reception. A government source described the encounter as "warm".

These events always feel a little like diplomatic speed dating. Nowhere was that on show more than the prime minister's own Instagram account, where he posted several photos of his engagements over the week.

Buried four photos deep was a picture of Albanese and Japanese PM Sanae Takaichi. The pair met for the first time since the furore about the PM's gesture over the two crown melons she gifted him.