The decision tois expected to save the Australian government AU$4.5 million over the next three years.
The government said in the Budget statement documents for the Department of Broadband, Communications and the Digital Economy that the "cybersafety enhancement program" will achieve the savings, because the government will instead force ISPs to only implement the Interpol filter.
The government was originally planning to force Australian internet service providers to block any content that was deemed to be "refused classification"; that is, sitting outside of the current rating system that the Classification Board uses to determine ratings for content.
Opposition to the proposal saw the filter become the subject of a major campaign against the government, with many saying it would lead to government censorship, and would ultimately be unworkable.
Prior to the last election, the government ordered a review of what was deemed to be "refused classification" in response to criticism that the classification was too broad. In the meantime, a number of ISPs have implemented a filter of the Interpol "worst of the worst" child abuse websites.
The government sat on the recommendations of the classification review for a number of months before canning the filter project entirely, instead saying that it would force ISPs to block the sites on the Interpol list under obligations in the Telecommunications Act.
It is understood that Telstra, Optus, and Vodafone are already complying with this. iiNet has previously said it would comply if given the notice to comply. The government has so far refused to disclose which ISPs have implemented the filter.
The move to shelve the filter was broadly welcomed by most, apart from religious lobby groups such as the Australian Christian Lobby, but there has been growing concern from the Greens that the filter is operating under the radar, and the party has suggested that it could be expanded over time to cover more content than is just on the Interpol list.