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I don't get it... why does Australia need to store a copy of US secret data? Isn't this why the Defence Industry invented the internet?
NSA isn't allowed to spy on its own citizens.

Australia is allowed to spy on US citizens.

US and Australia pool their collected intelligence. The US gives a list of names to Australia and asks if Australia has any information on those names.

This is pretty much how ECHELON worked, with UK, US, Australia, Canada and New Zealand all cooperating.

Wow, I'd never thought of that way, We'll spy on your people if you spy ours...
The NSA directly spies on Americans in every way they possibly can. They're not supposed to, is the actual situation.
Speaking of ECHELON, I saw a recent map of US intelligence assets around the world (Can't find it now, but will keep trying) which had a few sites in Australia, but was glaringly missing Pine Gap. [1]

Apparently the current foreign minister Bob Carr, when recently asked about this "...did not respond directly to a question about whether the Pine Gap facility is being used as part of the PRISM program."[2]

Considering that one of the primary concerns of Pine Gap is monitoring "transmissions intended for communications satellites; and microwave emissions, such as long-distance telephone calls." I'd find it hard to believe it isn't a fairly major part of the PRISM system for the southern hemisphere.

[1]: http://en.wikipedia.org/wiki/Pine_Gap [2]: http://www.zdnet.com/au/australian-government-to-assess-pris...

I guessed this exchange of data was happening earlier in the week: https://news.ycombinator.com/item?id=5861516

Though I said ASIO rather than DSD:

> But what if the NSA gave the PRISM tech and data feed to ASIO so ASIO could spy on Americans and answer any question the NSA asks (and vice versa).

> Now neither intelligence service has an 'illegal wiretap' on their own citizens. They just receive 'foreign intelligence' from each other.

Great, now we get access to the worlds corporate secrets too. I wonder which companies will be the beneficiaries..
US signals intelligence is also described as "absolutely critical" to Australia's diplomatic campaign to win a seat on the United Nations Security Council.

"Without intelligence support, overwhelmingly provided by US capabilities, we would not have won the seat," one Department of Foreign Affairs and Trade officer recently said.

Spying on other countries is something Australians want our government to do when it can't be avoided, not just because they can and Stalin did worse. Doing it to win an election is wrong. Here's another reason to make these activities as transparent as possible: it's obvious to everyone in Australia, except for Kevin Rudd and a few DSD agents, that we have always gained more by not doing things like this than we could possibly gain from some diplomat sitting on a committee in New York.