A re-elected Morrison government would implement stricter rules for screen content depicting violence against women, suicide, or tending to sexualise children, Arts Minister Paul Fletcher announced on Wednesday.
But Ron Curry from the Interactive Games and Entertainment Association says the government's proposed changes are piecemeal and the entire classification system needs an overhaul.
"It should be a big step backwards to review the whole system to ensure it's workable for parents, consumers and industry... I don't think that happens by just picking a couple of things to focus on," he told AAP.
Mr Fletcher rejected criticism of the classification proposal.
"We make absolutely no apology for going forward with these measures, which are necessary to help keep children and indeed adult users safe," he told AAP.
As part of the proposed changes, gambling-like games that include in-game purchases and "loot boxes" would also be subject to a minimum classification rating.
Loot boxes are a gaming feature involving a mystery box that contains randomly chosen surprise items such as weapons or costumes, which UK research has linked to problem gambling.
"The concern is that this is educating or familiarising children with gambling type behaviour, so what we want to do is make sure that parents are aware that a game they're considering getting for their children contains loot boxes," Mr Fletcher said.
Films and computer games must be classified before they can be released to the public, under a scheme managed by the commonwealth, state and territory governments.
Australia's classification scheme, introduced in 1995, was not designed to deal with streaming services or online gaming.
A 2019 review of the system has yet to be released and Labor's Michelle Rowland says the federal government has sat on the report for two years.
"Under Scott Morrison, work to ensure the scheme reflects modern content and delivery platforms has fallen hopelessly behind and simply has not been completed," she said in a statement to AAP.
Mr Fletcher would not be drawn on the nature of the hold up and said the government is still considering the review findings.
"We're getting on with practical changes that will help protect children and data users, and we're moving forward as quickly as we can," he said.
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