The ACMA is currently auditing the top 25 ISPs, which cover about 95 percent of Internet users in Australia, for compliance with the codes of practice. Any ISPs found in breach of the codes could face fines of up to A$27,500 (US$19,800) a day.

Communications Minister Helen Coonan said PC-based Internet filters, which ISPs offer to subscribers at a cheap price, are being used by one in three families using the Internet.

Coonan said a recent study by Internet safety body NetAlert found the kind of filtering proposed by Labor could slow connection speeds by up to 78 per cent.