"It includes whatever techniques are relevant, and that's how the current system works," he said. "It's not appropriate to have a world where we can do this for analogue data, analogue communication, but we can't do it in the digital world."
However, he insisted that it won't involve a built-in back door to bypass encryption.
"There's been ideas around for decades that you should create some kind of key that law enforcement can get access to, to access any data at any time -- that's not what we're proposing here," Taylor told ABC.
The laws will apply to Australian telecommunications companies like Telstra and Optus, in addition to international tech companies like Facebook, Apple and Google. They will face major fines if they fail to comply.
Draft legislation will be presented in the coming weeks, followed by a period of public consultation.