A national digital identity scheme will be up and running from mid-next year under legislation introduced to Parliament by the federal government, along with an extra $145.5 million in funding for the program.

The digital identity scheme provides a way for individuals to prove their identity in order to use certain services without having to repeatedly provide identification documents.

The Digital Identity Bill 2023 was introduced to the Senate last week by Minister for Finance Katy Gallagher.

The legislation paves the way for an Australian, economy-wide digital identity scheme, expanding the government's existing program to state and territory governments and the private sector.

“This bill will provide Australians with the choice to use a secure, convenient and voluntary way to verify themselves when interacting with government and businesses online,” Gallagher told the Senate last week.

“Digital ID will allow Australia to harness the advances of new technology and its benefits across the economy.”

The digital ID scheme has been running since 2015 when it was launched by the former Coalition government, with more than $600 million already invested in it.

But it has been unlegislated, with users only able to access Commonwealth services using the government digital ID service, known as myGovID.

Further funding

To coincide with the introduction of the legislation, the federal government also announced a further $145.5 million in funding over the next four years for the scheme.

If the bill passes Parliament, the national digital ID scheme will be up and running by July next year.

“We’ve spoken with business, community and privacy groups to ensure the bill will deliver the privacy safeguards, accreditation options and consumer safeguards they expect,” Gallagher said in a statement.

The government has consulted on the legislation over the last two months.

The bill legislates and strengthens the existing scheme for accreditation providers, known as the Trusted Digital Identity Framework, and expands it to state and territory governments and the private sector.

It also embeds privacy and consumer safeguards in law that go beyond the existing Privacy Act, and strengthens the governance arrangements around the digital identity scheme.

The legislation requires that the use of digital identity remains voluntary, and that consumers be given a choice over which providers to use.

“The Australian government digital ID system is based on the principle that people can choose which digital ID provider they use to access any website, app or other service that is connected to the system,” Gallagher told the Senate.

“Those less able, or willing, to get a digital ID should not be left behind. An essential safeguard in the bill is that digital ID will continue to be voluntary for individuals accessing government services through the Australian government digital ID system.

“The bill will require Australian government agencies to continue to provide alternate channels for people to access services.”

ACCC to be Digital ID Regulator

The bill designates the Australian Competition and Consumer Commission (ACCC) as the Digital ID Regulator, and also establishes a Systems Administrator and Data Standards Chair.

“The bill will make sure the regulatory watchdog has the teeth to enforce the safeguards with a broad suite of monitoring, compliance and enforcement powers including civil penalty provisions, enforceable undertakings and injunctions,” Gallagher said.

These penalties will apply to participants who break the digital identity scheme’s rules, which include a ban on the use of single identifiers, a prohibition on disclosing information for marketing and the use and disclosure of biometrics.

The bill has now been referred to the Senate Economics Legislation Committee, with a report to be handed down by the end of February next year.

The Department of Finance took control of the scheme from the Digital Transformation Agency (DTA) in July this year.

The DTA had previously consulted on similar legislation under the previous Coalition government in 2020, but this never made its way to Parliament.

The majority of the $145.5 million in new funding will go towards the ACCC, with the competition watchdog to receive $67 million over the next two and a half years to perform interim regulatory functions under the scheme from July next year.

The Attorney General’s Department will receive $56 million over four years to continue operating the Identity Matching Services, and $3.3 million to enhance the Credential Protection Register.

The remaining money will go towards tech updates for myGovID, an awareness campaign for businesses and supporting the Office of the Australian Information Commissioner to enforce the privacy requirements underpinning the scheme.

The government has been at pains to reiterate that the digital identity scheme will remain voluntary and does not resemble an identifying card.

The statement accompanying the introduction of the bill said that it is “not a card, not a unique number [and] not a new form of identification”.