Australia will hire 500 cyber spies and spend more than £750m on bulking up its cyber defences after the country was hit by a series of state-backed cyber attackers earlier this year.
Prime minister Scott Morrison unveiled the A$1.35bn (£750m) package on Tuesday – the largest ever investment in cyber defence by the nation.
“The federal government’s top priority is protecting our nation’s economy, national security and sovereignty," he said. “Malicious cyberactivity undermines that.”
It comes just weeks after Australia warned that a sophisticated state-based actor with "very significant capabilities" had been attempting to hack into businesses, critical infrastructure, essential services and all levels of government for some months.
It did not say who was behind the attacks, but experts claim that the nature of the hacks suggest they originated in China.
An earlier attack on the country's national parliament, which took place in 2019, was reportedly attributed to Beijing by Australian intelligence agencies.
Reuters had claimed that a report into the hack had suggested keeping the findings private. Other countries such as Russia, Iran and North Korea also have the capacity for such attacks.
China is believed to be the most likely culprit for the recent attacks given worsening relations between Beijing and Canberra in recent years. Australia is among the countries which has banned Huawei from its 5G networks following concerns over espionage – which Huawei has repeatedly denied.
Peter Jennings, from the Australian Strategic Policy Institute think tank, said he was "absolutely certain that China is behind it" earlier this year.
Since the start of the year, relations between the two countries have been particularly fraught, after Australia led calls for an independent inquiry into the origins and spread of Covid-19 from Wuhan.
China responded by banning beef experts from Australia's largest abattoirs as well as introducing new tariffs on barley and urging Chinese students against visiting Australia.
Since then, tensions have continued, and earlier this month, Australia's Mr Morrison said the country would not "trade our values in response to coercion from wherever it comes".
More recently, this weekend, Chinese state-backed media claimed Canberra had been “waging an intensifying espionage offensive against China”.
The Global Times claimed Australia had been sending agents to China to spy on the country and had also attempted to install wire taps in the Chinese Embassy in Canberra. The Australian government did not respond to requests for comment.