It sounds troubling, but it's hardly even a Government proposal for legislation, never mind a Bill being laid before parliament. And the decision to withhold the draft may still be appealed.
This seems to be an early draft (a bit like the ACTA negotiations, perhaps) since the grounds for withholding are:
- the material is still in draft form
- the material has not gone through the necessary whole-of-government review and approval processes; and
- to release such material at this stage would, in [the bureaucrat's] view, prejudice the current negotiations and decision making processes which are in train
So the Department concerned is probably committed to something like the draft, and they are trying to work out what is feasible, but the rest of the government has not yet had a chance to comment.
The appropriate response at this stage is probably (1) appeal, (2) contact representatives in government and opposition who may oppose any provisions that threaten civil liberties, and (3) use the media (and slashdot) to raise awareness that something is coming in the future.
But it is not normal to release early drafts (that have not yet been thought through properly) to the public - at that stage you could not possibly have a workable policy, and people may get very worked up about errors that the government themselves will address. Surely the time for public scrutiny is when concrete proposals are made?
Though crowdsourcing of bills might be interesting... it worked for the constitution in Iceland, didn't it?