Fitch Solutions, which specialises  in managing counterparty risk, has warned the government's controversial new encryption laws could harm Australia's flourishing tech sector as well as the global operations of tech giants like Google, Facebook and Apple.

"The new rules are negative for Australia’s tech sector, but they will have the most impact globally, as they target international companies. If they have to follow these rules in Australia, other jurisdictions will also ask for the same concessions, further weakening the security of messages," the report from Fitch Solutions Macro Research said.

The Assistance and Access Bill 2018 was passed by both houses of Parliament last week despite widespread opposition from the tech industry and civil liberty groups.

Telcos, device makers like Apple, search engines like Google, and social media apps like Facebook, could potentially be compelled to help federal authorities gain access to encrypted communications.