A single digital ID will make it easier for Australians to verify their identity online and reduce the risk of privacy breaches, a minister says, as new laws clear a major hurdle.
Legislation to set up a digital ID scheme passed the Senate on Wednesday and will head to the government-controlled lower house to be rubber stamped before it becomes law.
People who sign up for the scheme will not need to repeatedly share their passport, birth certificate and driver's licence online.
The legislation builds on the government's digital ID system, myGovID, that more than 10.5 million Australians have signed up to access more than 130 government services.
The expansion will include state and territory government services, and the private sector.
There are also transparency requirements for law enforcement officers who access new digital IDs and data protection measures.
Private businesses will also be able to apply to use the digital ID system within two years of it starting, deactivated accounts won't be used or reactivated without consent and data retention will be restricted.
Law enforcement agencies and the minister in charge of the Australian Federal Police must report annually on any disclosure or access of personal information.
A digital ID scheme would be more convenient and ensure less data is stored across different sites, Finance Minister Katy Gallagher said, pointing to concerns raised by data breaches at Optus and Medibank.
"Australians will be sharing less personal information, which is held by fewer organisations, that are subject to stronger regulation, reducing the chance of identity theft online," she said.
The coalition voted against the bill after it failed to amend it to more expressly outline Australians weren't required to have a digital ID and they wouldn't face a lower level of service for having traditional documents.
It also pushed to remove the phase in provisions so the private sector could have access immediately and alter privacy laws before the scheme started.
"There are significant problems with the government's Digital ID Bill, as is clear from the many issues raised by stakeholders," opposition government services spokesman Paul Fletcher said.
The coalition would closely monitor and scrutinise its implementation after it passed, he said.
