The Government hopes a new digital ‘trust’ system will help protect consumer data. 

The Albanese Government has announced the development of a new digital identity system called the Trust Exchange (TEx), described by Minister for Government Services Bill Shorten as “brand new and world leading”. 

The system aims to streamline the process for Australians to verify their identity and credentials, potentially reducing the need for businesses to hold sensitive personal documents. 

However, some experts have raised concerns about privacy and security, particularly in light of past government controversies.

Speaking at the National Press Club, Shorten said that TEx is currently in the “proof of concept” phase, with a pilot expected in early 2025. 

The technology would allow users to verify their identity through their digital wallets, consenting to share only selected information with third parties such as banks, telcos, or real estate agents. 

This is intended to reduce the risk of data breaches, as the information shared would be minimal and controlled by the user.

In practical terms, TEx could simplify everyday transactions, such as proving one's age at a pub without handing over a physical ID or providing necessary details to rent a property without sharing excessive personal information. 

The digital token exchanged in these interactions is designed to offer businesses the verification they need while being worthless to hackers due to the absence of personal data.

Despite the government’s assurance of strong privacy controls, cybersecurity experts have expressed caution. 

Some have described the project as “risky”, warning that any system centralising data poses a significant target for cybercriminals. 

While the government insists that TEx will be decentralised to mitigate these risks, experts remain sceptical, citing the potential for the system to become a “honeypot” for hackers.

Shorten says the initiative has garnered support from major corporations, including Telstra, Google, and the Commonwealth Bank, with organisations like the Tech Council of Australia endorsing the government's commitment to data security. 

However, public trust remains a critical hurdle. 

The recent Robodebt scandal, which resulted in a Royal Commission and exposed severe flaws in government data handling, has left many Australians wary of new government digital initiatives.

There are also concerns about the potential for “data creep”, where government agencies could use the information collected for purposes beyond the original intent. 

This issue was highlighted during the COVID-19 pandemic when some agencies attempted to access contact tracing data for unrelated investigations.