The axing of Stephen Conroy's other pet project, the controversial mandatory internet filtering scheme, will save the government more than $4 million.
According to Budget 2013 papers, the government will achieve savings of $4.5m over three years by not proceeding with mandatory filtering legislation, a move announced in November.
The plan would have forced ISPs to filter web pages that contain refused classification-rated content based on a government blacklist.
Instead, major internet service providers will be required to block child abuse websites on Interpol's 'worst of' child abuse list, in accordance with their obligations under the Telecommunications Act 1997, the papers said.
Senator Conroy mooted the idea in the lead up to the 2007 election but it has been fraught with delays ever since.
While the aim was to block child pornography web pages, the methods employed by the government were deemed impractical and seen as an attempt to censor the internet.
Industry giants such as Google denounced the plan, saying a mandatory ISP filter was both unworkable and unwanted by parents.
The internet community had argued that the RC category was too wide to make any successful hits.
"RC is a broad category of content that includes not just child sexual abuse material but also socially and politically controversial material - for example, educational content on safer drug use - as well as the grey realms of material instructing in any crime, including politically controversial crimes such as euthanasia.
"Decisions in relation to instructional, educational, scientific or current affairs video material will often be much more complex than in relation to entertainment 'films'," Google said in a government submission in 2010.
Large ISPs such as Telstra and Optus have since agreed to voluntarily block child abuse web pages identified by Interpol.
