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Australian govt removes data localization rules for digital identity scheme

Australian govt removes data localization rules for digital identity scheme

The federal government has acquiesced to sustained lobbying from the technology and banking sectors, leading to the removal of regulations that would have mandated data from the nation’s digital identity scheme be stored exclusively within Australia.

The Australian Government Digital Identity System (AGDIS), set to be expanded following the enactment of landmark legislation earlier this year, will no longer require data localization, InnovationAus reports. One Nation Senator Malcolm Roberts issued a dissenting report with 10 recommendations, including that the Bills should be amended to remove the ability for identity data to be held outside Australia.

Instead, the Albanese government has gone in the opposite direction with draft rules issued by the Department of Finance.

This shift follows intense lobbying efforts by major players in the technology and banking industries, who argued that such restrictions would impose significant operational and financial burdens, limiting the efficiency and scalability of the digital identity framework.

A spokesperson told InnovationAus that it is not necessary to include the provision in the current rules as they apply to only government agencies, which do not store personal information offshore.

According to the Australian hosting certification framework, government entities will retain the autonomy to choose the hosting arrangements that best meet their needs.

Recently, the Albanese government announced it is committing a minimum of $2 billion over the next decade to enhance Australia’s cyber capabilities. This investment includes a strategic partnership between the Australian Signals Directorate (ASD) and Amazon Web Services (AWS) to establish a Top Secret (TS) Cloud for the Australian government.

Elsewhere, a 2021 report by the Information Technology & Innovation Foundation (ITIF) found that restricting data flows has a statistically significant impact on a nation’s economy, claiming it reduces total volumes of trade, lowers productivity, and increases prices for downstream industries that rely on data. It urges countries like Australia, Canada, Chile, Japan, Singapore, New Zealand, the United States, and the United Kingdom to collaborate on constructive alternatives to data localization.

The AGDIS aims to streamline access to various government and private sector services, in a bid to create a unified digital identity for citizens and businesses in the country. 

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