Digital ID bill passes senate

It’s only taken two decades, but Australia is officially on the path to having a national, government-regulated, digital identity scheme to replace the hoarding of vast amounts of personally and financially sensitive data by banks, insurers, utilities and agencies now being routinely hacked.

The Albanese government finally secured the required support for enabling legislation for the digital ID system in the senate from the Coalition and the Greens on Wednesday after making concessions on safeguards and bank access to the new scheme, which will toughen privacy and speed up access to financial institutions and their client.

Banks, through the domestic payments network Australian Payments Plus (AP+), had wanted to modify the proposed digital ID legislation to circumvent the explicit prohibition on the use of racial markers, horrifying some stakeholders and policymakers.

The bid got short shrift, although the government conceded to allowing banks and private businesses expedited supposedly faster access to the phased rollout of the Australian Government Digital ID System (AGDIS), down to two years from four. Still, it is clear the government intends to run the digital ID show.

Banks are keen as mustard to flip the current model of wholesale fees of around 70 cents per identity verification check flowing to the government under the Document Verification Service for gateway providers back to financial institutions so they can monetise the ID checks for regulated transactions.

Australia Post had been an early entrant into this market as a credential provider.

But it is unclear where the Labor government intends to head with the state-backed retail credential, as banks try to offload access to cash and over-the-counter transactions on Australia Post in the absence of a Universal Service Obligation for cash, like has been imposed in the UK under the legislated “right to cash”.

After the Optus, Medibank and Challenger hacks and mass data exfiltrations, both banks and the government are bracing for the next wave of scams and identity fraud to hit at a weaponised scale after a key Russian ransomware operator was officially sanctioned under international law.

“Digital ID makes it safer and easier for Australians to prove who they are online,”  finance minister Katy Gallagher said.

“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.”

A statement issued by Gallagher said: “Digital ID is just one of the ways the Government is responding to the increase in third-party data breaches, alongside the National Strategy on Identity Resilience, funding for the ACCC’s National Anti-scam Centre, the introduction of the Identity Verification Services Act 2023, continued reforms to the Privacy Act and the Government’s Cyber Security Strategy 2023-2030.”

The minister dutifully criticised the opposition, but in reality, there is now almost no federal political opposition to the digital ID legislation now that increasing numbers of people and organisations are being extorted and looted, often before they realise it.

It will get worse before it gets better, with both Russia and China now invested in, and salivating at, the ability to structurally shift confidence, be they government or financial institutions.

People get annoyed when phone services drop out. People revolt when their money or property disappears.

But who’s counting the years…

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Banks continue to jawbone for racial markers in digital ID