The Australian Senate has passed a Digital ID Bill, which sets up Australia’s first digital identity scheme to roll out to the private sector and states and territories.

The bill passed on 28 March with the support of several independent senators, the Jacqui Lambie Party, and the Greens.

According to the Labor government, the bill will strengthen the current digital ID accreditation scheme and provide a legislative framework for the current digital ID system to expand, boost privacy, protect consumers, and strengthen the governance of the scheme.

The scheme will also be voluntary, and a Greens amendment will, according to Greens Senator David Shoebridge, put “in place a clear obligation for service providers to have a comparable non-digital service available”.

Speaking to the ABC, Finance Minister Katy Gallagher (pictured) described how the new scheme will work.

“The idea is that you would provide your ID, and that would establish who you were. And then as you engage with other people that will be involved in the system – businesses, private companies, state and territory governments – you’d be able to access that, the myGov ID system, as a way of verifying who you are,” Gallagher explained.

“So you don’t have to provide all those pieces of paper ID, or emailed ID, to all of those different providers, thereby reducing the amount that you have to share about yourself. And also, you control how you engage with those companies using your myGov ID system.”

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However, she said, you don’t have to sign up for it if you don’t want to, but that the point of the legislation was to keep the ID scheme properly regulated.

“People who participate are accredited; those important privacy protections are enshrined in legislation, as is the fact that it’s voluntary and that government services need to continue to be provided in a range of ways so that people who don’t want a digital ID don’t have to have one,” Gallagher said.

“We’ve got 10.5 million people with a myGov ID in place already; you know, it’s there and it’s safe. And we will review it over time as well to make sure that we are ensuring that people’s trust is maintained.

“But, you know, a lot of people use it already. This is about enshrining it in legislation and hopefully providing people with a really convenient way of proving who they are without sharing all their information many, many times over.”

Lynn Kraus, chief executive of Australian Payments Plus, believes passing the legislation is an important step forward.

“The establishment of a secure, unified digital identity framework is a stride towards building a more efficient and secure digital ecosystem where businesses can thrive, and consumers can navigate the digital space with ease and confidence,” Kraus said in a statement shared via email.

“Once in place, the digital identity framework will open new opportunities for productivity and provide enhanced security for people’s personal information. As Australia furthers its digital transformation, AP+ and ConnectID are excited to be part of the journey, leveraging the benefits of the digital identity system to deliver greater functionality and security for consumers and businesses in Australia.”