The information and communications technology (ICT) trade deficit has spiralled to $14.4 billion.
A report by the Australian Computer Society (ACS) found Australia's ICT trade deficit accounted for 65 per cent of the 2001/02 financial year total.
Opposition information technology spokeswoman Kate Lundy described it as "appalling" and said it demonstrated the need to build the local ICT industry.
The report, 2002 ICT Trade Update, said Australia's ICT exports and imports had both fallen over the last financial year.
It said that during the financial year 2001-02, Australia's ICT exports fell by $1.7 billion, or 24 per cent.
ICT imports were down by almost $1.9 billion, or 8.6 per cent.
The ACS attributed the drop to falling investment but IT Minister Senator Richard Alston dubbed the report misleading and one-dimensional.
"It is a view that totally disregards the enormous contribution made by the growing Australian ICT sector to overall economic and productivity improvement," he said in a statement, adding the ACS analysis was little more than a superficial and simplistic stunt.
"All the world, except the ACS, understands that Australia is a net winner when it can afford to import goods that help to transform the products and services base and boost productivity and efficiency," he said.