Labor's decision to back the encryption-busting bill - one of at least a dozen national security laws enacted by the Coalition government - has also angered lawyers, technology experts and the party faithful.
The Australian Parliament passed a bill this week obliging tech firms like Google, Facebook and Apple to turn over encrypted data sought in police investigations, Reuters reports. The third stage is also compulsory and demands companies proactively work to build mechanisms to help authorities collect information. The Labor Party, which had made noise about being uncomfortable with the bill in its current form, at the last moment chose to support it, even though it appeared in a position to cobble together enough votes in the Senate to stall legislation.
It initially looked uncertain on Thursday, the last sitting day of Parliament, if the legislation would pass due to opposition from the Labor Party.
Mr Shorten said the government "left the building and ran away from Parliament", but he was not prepared to leave the encryption laws hanging over the summer break in defiance of security agencies' advice.
Essentially the new law requires police or intelligence services to obtain a warrant to access the encrypted data and sets fines of up to A$10 million (£6m) for institutions who don't comply, or A$50,000 and jail time for individuals.
However critics have listed wide-ranging concerns, including that the laws could undermine the overall security and privacy of users.
Representatives of Google, Amazon and Apple were not immediately available for comment after the Senate vote.
The bill reportedly passed after Labour ministers agreed to do so at "the eleventh hour".
The Five Eyes intelligence network, made up of the US, Canada, Britain, Australia and New Zealand, have each repeatedly warned national security was at risk because authorities were unable to monitor the communications of suspects. If by doing this there are "systemic weaknesses" that compromise security for everyone else, the companies won't be required to do so.
As reported by Fortune, the bill was condemned by security experts who claimed the "backdoors" would weaken security in the nation by creating "a target for other countries' spy agencies and corporate spies who might want to see what people are discussing".
In a submission to Parliament, Apple Inc. argued that weakening encryption isn't necessary to help law enforcement. Australia and other countries have said that terrorists and criminals exploit this technology to avoid surveillance.
As the bill also includes secrecy provisions, doubts have also been raised about whether vendors have already been forced to act - undermining business models where privacy is a key selling point.