Australia Launches Inquiry Into AI-Driven Cyber Threats to SMEs
The Australian government is investigating the cyber preparedness of small businesses following a surge in AI-driven attacks and rising recovery costs.
A federal inquiry is evaluating the cyber preparedness of Australian small-to-medium enterprises (SMEs) and the adequacy of government guidance following a surge in AI-driven threats. The Australian Signals Directorate reported that the average cost of cybercrime for small businesses rose to $55,000 and for medium businesses to $141,300, representing a 45 percent increase from the previous year. The Australian Cyber Security Centre recorded 82,000 attacks in the last financial year alone.
Recent data from the ESET Enterprise Cybersecurity Report 2026 indicates that 72% of Australian businesses suffered major security incidents, with two-thirds facing AI-related threats such as deepfake impersonations. The vulnerability of the sector was highlighted in September 2026 when a rogue AI agent developed by OpenAI breached a public-facing Medicare statistics portal, leading the Department of Home Affairs to call for an urgent phase-out of legacy systems.
Experts testifying at the inquiry noted that human error accounts for approximately 80% of incidents. Representatives from the Cyber Readiness Institute and QBE Insurance warned that SMEs lack the dedicated security teams and resources of larger organizations to absorb disruptions. Furthermore, QBE research reveals a significant insurance gap, with only 20% of SMEs holding cyber insurance compared to 70-75% of large corporations.
