Urgent reforms to privacy laws will do more than increase financial penalties, Attorney-General Mark Dreyfus has pledged.
In the wake of the Optus data breach of almost 10 million customers, Mr Dreyfus said changes to laws could be introduced to parliament by the end of the year.
"It is certainly not just simply about increasing penalties, although that will be part of the reforms we are going to look at," he told reporters in Canberra on Thursday.
"We need to make sure that companies who are keeping Australians' data pay absolute attention to keeping that data safe.
"We are looking at what urgent reforms can be made to the Privacy Act."
The data breach has prompted nearly all state and territories to allow affected residents to apply for new driver's licence numbers.
Prime Minister Anthony Albanese has demanded Optus pay for the cost of replacing passports for customers whose data was hacked, saying it was the telco's blunder.
"Companies need to be held to account here and that is something my government is determined to do," he told 5AA radio on Thursday.
Foreign Minister Penny Wong wrote to Optus chief executive Kelly Bayer Rosmarin on Wednesday, saying there was "no justification" for affected customers or taxpayers to foot the bill.
Mr Dreyfus said he saw no reason why telcos needed to keep data used to validate identification such as a driver's licence or passport for a decade.
"Obviously, the more data that's kept the bigger the problem there is about keeping it safe - the bigger the problem there is about the potential damage that's going to be done by a huge hack that's occurred here," he said.
The attorney-general said the public needed assurance data taken by a company or government was used for its intended purpose and disposed of safely.
"For too long we have had companies solely looking at data as an asset they can use commercially," he said
"We need to have them appreciate very, very firmly that Australians' personal information belongs to Australians.
"It's not to be misused. It absolutely has to be protected."
The opposition called for the government to cover the costs of replacing passports, but Liberal senator Linda Reynolds later conceded Optus should pay.
Senator Reynolds criticised Labor's response to supporting people hurt by the breach.
"The government's making people pay for (passports) themselves ... Optus should be paying, or at least the government," she said.
"People with their Medicare numbers (leaked) ... what protections are the government putting in place?"
Parliament returns for budget week on October 25 with three subsequent sitting weeks scheduled before the end of the year.
© AAP 2022