1. Australia has a history of communications ministers who are simply inappropriate for the role (google: "worlds biggest luddite").
2. The latest minister, Senator Conroy, and his government choose to focus their political will and energy on attempts to censor information and apply control over what Australians can and can't see on the Internet.
3. This is largely because the sitting government has an interest in pleasing an organisation called "The Australian Christian Lobby", who have openly, publicly and repeatedly called for censorship of the Internet. The ACL influence a significant voting block across a large number of constituencies.
4. The news from down here regarding the intersection of Government and technology seems bad because there isn't any good news to plug the gaps between the bad news.
5. The government does very little to foster an environment to encourage entrepreneurship or technical innovation by start-ups and micro-companies.
6. Finally, Australia doesn't have a bill of rights. Unlike the US and England, the High Court doesn't always have the final say on matters. The government is relatively free to introduce laws where it needs to in order to continue it's agenda (getting reelected).
And to end on some good news, the government did recently open a new fund to be managed by local VCs, of which at least some of it will trickle through to Internet technology startups:
http://delimiter.com.au/2010/11/08/80m-splash-carr-fills-up-...