Australia has been building a national digital identity framework for the better part of a decade. The idea was straightforward: create a single, verified digital identity that Australians could use to access government services and eventually private sector services too.

In 2026, we have a system that works sometimes, for some things, for some people. That’s not quite the vision.

The Current State of Play

MyGovID—the Australian Government’s digital identity app—has been downloaded over 12 million times. It allows users to verify their identity once, then use that verification to access participating services without re-proving who they are each time.

In practice, the experience is uneven. MyGovID works well for ATO services, which was its original design context. Tax returns, business activity statements, and superannuation services are relatively smooth. The single sign-on experience is a genuine improvement over the old AUSkey system for businesses and the password-plus-SMS approach for individuals.

But beyond tax, adoption is patchy. State government services largely don’t integrate with MyGovID. Most banking services don’t either. Healthcare, education, and local government remain on their own identity systems. The result is that Australians still maintain half a dozen different digital identities for different purposes, which is exactly the problem the national framework was supposed to solve.

Why Integration Has Been So Slow

The technical barriers are real but solvable. The more fundamental problems are jurisdictional and political.

Australia’s federal structure means that the Commonwealth can build MyGovID, but it can’t compel state governments to adopt it. Each state has its own digital identity initiatives—NSW has its Digital ID, Victoria has the Service Victoria app, Queensland has a digital licence. These systems solve similar problems with different technology stacks and different governance models.

The Trusted Digital Identity Framework was supposed to provide interoperability standards that would let these systems talk to each other. Progress has been slow. The framework has been through multiple iterations, public consultations, and legislative drafts. The Identity Verification Services Bill, introduced in 2023, still hasn’t passed in its final form.

States have reasonable concerns about ceding identity management to a Commonwealth system. Identity is power. The government that controls identity verification has significant influence over how citizens interact with services. States aren’t eager to hand that influence to Canberra, regardless of the technical merits.

The Privacy Elephant

Public trust in government-managed digital identity has taken hits that no amount of marketing can easily undo.

The Optus data breach in 2022 exposed personal details of 9.8 million Australians. The Medibank breach shortly after compromised health records of 9.7 million people. The Latitude Financial breach in 2023 exposed 14 million records including driver’s licence and passport numbers.

These weren’t government breaches, but they fundamentally shaped how Australians think about centralised identity data. When you’ve had your driver’s licence number stolen because a telco couldn’t secure its database, the idea of putting even more identity information into a single digital system doesn’t feel reassuring.

The government’s response has been to emphasise that MyGovID doesn’t store identity documents centrally—it verifies against authoritative sources (the passport office, state transport departments) and stores only the verification result. This is technically true and architecturally sound, but the distinction between “we store your documents” and “we store verification that we’ve seen your documents” is too subtle for most people to find comforting.

According to a 2025 survey by the Australian Information Commissioner, 58% of Australians said they were concerned about how their personal information is handled by government agencies. That’s up from 49% in 2020. Building a national identity system on a foundation of declining trust is an uphill battle.

What Other Countries Did Differently

Estonia, India, and Singapore all built functional national digital identity systems. The common thread isn’t technical sophistication—it’s political commitment. These countries decided digital identity was critical infrastructure and invested accordingly, including the political capital needed to overcome institutional resistance. Australia hasn’t made that same level of commitment.

The Private Sector Workaround

While the government framework stalls, the private sector has built its own identity verification layer. Companies like Illion, Equifax, and GBG provide verification services to banks and telcos. When you open a bank account online and upload your licence for a selfie check, a private verification provider is doing the matching.

This works but creates its own problems. Your identity data is held by multiple private companies, each with their own security standards. A functional national system would reduce the need for each company to independently collect identity documents. But that requires a system people actually use, which requires a system that works across enough services to justify the setup effort.

What Needs to Happen

Three things would move the needle. First, get the legislation passed. The legal framework defining identity provider standards and liability has been in draft form too long. Certainty attracts investment from both government agencies and private sector services.

Second, solve the state-federal integration problem through financial incentives—Commonwealth funding tied to interoperability standards—rather than mandates. States need a reason to integrate, not an order to comply.

Third, invest in public communication that takes the trust deficit seriously. Not promotional campaigns, but honest engagement about what data is collected and what protections exist. Australians aren’t opposed to digital identity. They’re cautious, and that caution is entirely rational.

The goal isn’t to make everyone use one identity system. It’s to make one system good enough that people choose to use it. Australia isn’t there yet.