Data sovereignty is the concept of keeping Australian data on Australian soil. This requires such data be kept in a data centre located in Australia (data residency), and only accessible by Australians at all times.
Individuals and businesses based overseas, or with head offices overseas are unable to provide such assurances around access. Australian data includes more than just data residing in a database. Operational, management and configuration data that is required to run/patch/maintain an IT environment also needs the same level of controls as data sets themselves.