How one Australian State Built a Digital Government

This experience taught me a simple truth: that citizens value seamless interactions with their governments just as much as they value physical infrastructure. Digital government is not a sideshow. It is central to trust, productivity, and quality of life.

Australians live in a digital world, and much of this is their own choice. Despite the availability of analogue options, people choose to transfer money instantly, to stream entertainment on demand, and to order basic goods with a single tap. 

In this world, people expect services to be personalised and anticipatory. They expect control of their own information, transparency, and a consistent experience across agencies and jurisdictions. 

When government lags behind, frustration builds and trust erodes. In the digital present, trust is not earned through outcomes alone. It is also earned through the responsiveness of the service that makes those outcomes happen. If a portal is clunky or a citizen must re-enter the same information again and again, the message is clear: the government is out of touch, and failing to serve its citizens.

And we have already seen what happens when trust is lost in a digital context. The Robodebt saga eroded confidence because service design flaws and opacity hurt people. Getting this right is not only about good service design and efficiency — it is also about how democratic institutions maintain legitimacy, security, and cohesion in a digital age.

But despite the stakes, Australia (at all levels of government) has no pathway toward government digitisation. We are trapped in the space between Government 2.0 — a system of siloed portals and limited data use — and a more integrated system: Government 3.0. 

Of course, even this space between is an improvement on the past. It is certainly better than Government 0, where everything was paper-based: forms were filled out by hand, people had no choice but to queue at counters for hours, and every agency worked in isolation. With Government 1.0, services moved online through basic web forms, but each department still had its own isolated portal. Government 2.0 brought improvements through mobile apps and active social engagement, making services more interactive and accessible, though still siloed in frustrating ways.  In Government 3.0 horizontal service delivery is key: a single app or platform lets you renew your licence, pay a council levy, and update your details all at once — with all of this flowing seamlessly across government, creating a truly connected, citizen-centric experience.

This is certainly aspirational, but it is far from impossible. To realise this aspiration we must change how we think, fund, decide and use data, and we must start by placing trust — in both the government and its services — at the centre.  The logical place to start this transformation is with one key piece of backbone infrastructure: a single robust Digital ID for all Australians.

Even in its own right a single Digital ID would be of enormous value to Australia.  A national, citizen-led Digital ID could unlock about 19 billion dollars a year in benefits, the equivalent of roughly 0.7 per cent of GDP, with the high-adoption scenario generating about 32 billion dollars or 1.2 per cent of GDP. Which is why getting this right matters. The mechanism is simple: digital identity reduces fraud, streamlines verification, cuts compliance time for citizens and businesses, and unlocks new digital services across the economy. It is economic reform delivered through better experience and stronger trust.

Sceptics sometimes say large-scale digital reform in government is too hard, too expensive, or too risky. My experience in NSW shows the opposite is possible when architecture, culture and trust align.

To transform NSW’s digital delivery, we started with two simple priorities: we consolidated citizen interactions at Service NSW, and we built a digital driver’s license to reliably deliver something that our citizens wanted. These lay the foundations for further delivery.

In 2013, Service NSW was built to make government simple, reliable and respectful. Instead of forcing people through dozens of portals or offices, we created one easy front door. The results were transformative. Customer satisfaction was consistently in the mid to high nineties across channels and millions adopted the app. That polling booth moment stays with me. Convenience often beats concrete in daily life.

The Service NSW app started with a digital drivers license, then expanded into other services

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Service NSW

Next, we launched a digital driver’s licence. We thought that getting something basic, like driver’s licences, would be a good first step to prove our potential. The digital driver’s licence was downloaded by over 600,000 people in its first week. Today, more than 5 million people use the app, with satisfaction above 93 per cent. The project proves that a trusted, citizen-led digital identity can achieve mass adoption and stay embedded in everyday life. 

During COVID, we distributed vouchers through the app. Small businesses told me they loved them, customers loved them, and, crucially, everyone got paid in days rather than months. For many, this proved a lifeline during the toughest times. Fraud stayed low, adoption stayed high, and the economic impact was measured in the billions.

Since delivering these simple foundations, hundreds more features have been rolled out across NSW through the infrastructure that we established. 

So why did NSW succeed where others failed? I put it down to three things: 

First, we got the financing model right. One of the most powerful levers was budget reform through the Digital Restart Fund (DRF), which ended up being a $2.1b trove of funding for different digital projects across government. Starting in 2019, the DRF shifted tech program funding  from waterfall to agile. Projects were funded in tranches against outcomes, which halved delivery costs, cut the median time to market from 42 to 19 months, and delivered multi‑billion dollar economic returns. 

Project sizes were capped at $20m, with a transparent and clear six-step process to receive funding: projects were developed, then prioritised, then detailed in a lean business case; only after ministerial approval of projects did they receive funding, which was withdrawn once the program was delivered. This sat outside of the traditional Expenditure Review Committee (ERC) process, and enabled oversight across the portfolio of digital projects being done across the government.¹¹1

The Digital Restart Fund's funding process was outside the traditional ERC rhythm

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Source: Digital NSW

I remember arguing with Treasury that traditional funding models did not work. They would only consider one-off big ticket items or bundle digital into the yearly budget cycle. I told them it was too slow. A new smartphone is released every year, but government was expected to run on the same digital infrastructure for decades, until problems boiled up to being large enough that ERC paid attention. We needed a fund that let us innovate and, more importantly, iterate fast. The DRF provided that permission structure, and the results followed.

Second, we set-up Service NSW as a greenfield entity, to allow for a new culture. With new branding, leadership, and employees, Service NSW had a clean break from the agencies that preceded it — like Roads and Maritime Services. This allowed the agency to take new approaches and establish new standards, without the burden of how things had been done in the past. For Service NSW, this meant a new culture centred on citizen experiences, with data informing all that we did. One part of that was its leaders, many of whom — like Mike Pratt, Glenn King and Emma Hogan — came from the private sector.

Finally, I took accountability for outcomes as a Minister. As a Minister, the buck stops with you. This means you must make decisions. The less contentious decisions are normally distributed throughout the team for quick resolution; however, complex, high risk, and politically charged decisions normally end up on your desk. Creating the Digital Restart Fund enabled these decisions to be made with greater cadence. This not only removed log jams but also reduced risks — as you have the runway to make the right calls. 

Leadership is a non-negotiable ingredient to Government 3.0 thinking and delivery. One example that sticks with me is the experience of digitising the NSW Seniors Card. Having talked to the agency responsible for administering the seniors card, I knew the importance of it. Not only was it technically feasible to create a digital seniors Card, but it also was a critical part of helping older citizens begin to engage with our digital government. There were strategic benefits to funding this initiative that weren’t immediately apparent to the bureaucracy. So, when I saw that it was not recommended for funding in a round of the Digital Restart Fund, I intervened to ensure it was prioritised. And the result was more than 330k downloads of the digital seniors app, with more than 96% satisfaction.

This shift — from paper to digital servicing, through Service NSW — delivered upwards of $15b in cost savings in its first four years of operations. Underpinning this was an 80% reduction in cost to serve, which enabled NSW’s Department of Customer service to reduce its overall cost base while drastically increasing its volume of interactions. In fact, Service NSW increased the number of customer interactions by over 400% from 65m per year to over 335 million.

It was not just the public who benefitted. The staff at Service NSW loved what they were doing because they could see the difference it made. Service NSW even became the first government agency in Australia to win a Great Place to Work Award, which speaks to the pride and purpose of the team. A motivated public service is a strategic asset. When staff are energised, citizens feel it every time they interact with their government. When modern services are well-delivered, everyone wins.

Australia has the talent, proof points and ambition to deliver digital governments. 

We are the home to many leading tech organisations, like Atlassian, Canva, Afterpay and Airwallex. And we have pioneered some of the most substantial global developments in digital technology, like Google Maps and WiFi. The problem is also not a lack of vision. As Minister Katy Gallagher says:

Millions of Australians interact with the APS every day… They don’t care which program belongs in what portfolio. They don’t care who the Minister is or the Departmental Secretary… What they want is a system that works. They want to be treated as a human being, with respect, dignity and fairness. Whether someone is looking for work or starting a business — they want our systems and processes to be quick and uncomplicated.

There has been some good progress made on national digital infrastructure — particularly within the ATO and Services Australia. However, improvements of significance — across all tiers of government — are hard to find and are the exception rather than the norm. In this section of the piece, I highlight the system level constraints that hold us back.

Many agencies are saddled with decades-old systems. These platforms are expensive to maintain, hard to secure and often unable to share data. Take, for example, Australia’s visa processing system, which is decades old; a recent review highlighted this challenge:

Australia’s current core visa processing ICT systems are built on technology from the 1980s and 1990s. The main visa processing system (referred to as ICSE) is approaching 25 years of age, while other foundational systems that operate in the background are approaching 40 years of age. While reform efforts have taken place, they have added layers of additional systems and layers of complexity… This complexity must be navigated by visa decision-makers and managed by ICT support teams, all at a cost.

The impact stretches beyond the costs of maintenance and risk of system failure. Citizens feel the impact every time they retell their story at a new counter or upload the same document to different portals. Interoperability is not a technical nicety. It is the difference between a humane experience and a bureaucratic maze. 

Our governance settings are still analogue. The annual ERC and budget processes were designed for large capital projects rather than iterative digital delivery. Even the tailor-made ICT Investment Approval Process is designed for projects of $30m or larger; these business cases typically take at least a year to deliver funding, with no formal requirement that any features be delivered between the two steps of the business case processes.

At the same time, Commonwealth and state fragmentation creates parallel systems for similar tasks. People do not live inside organisational charts, nor do they want to deal with different state and federal systems. They expect government to be connected, but our federated arrangements too often create duplication and confusion. Beyond this, without common national standards and rails, we risk duplicating investment in IT systems eightfold across each jurisdiction. Put simply, it sacrifices experience and cost effectiveness.

There is also the reality of short election cycles. Digital transformation benefits compound over years, but political incentives often prioritise twelve-month wins. This tension is not unique to Australia, but it is acute in a federation where elections are staggered. We need a model that delivers visible progress each quarter while building the platforms that will serve the nation for a decade.

Public sector innovation is still too often treated as a risk rather than a necessity. Capability gaps in data, design and cyber security persist. Multidisciplinary teams can deliver remarkable results when leaders provide air cover to test and learn, but the instinct to retreat to process is strong. That instinct must be replaced by a mindset that values measured experimentation and honest feedback loops.

Without the permission from a champion within the government to experiment and change, the incentives faced by public servants to stay out of the news dominate their desires to experiment and change.

These incentives are particularly powerful because of how Australia has stumbled before. The Australia Card failed because privacy concerns were not addressed. Robodebt collapsed because it relied on flawed design and lacked transparency. The COVIDSafe app is another cautionary tale. Despite about 7.9 million registrations, it identified only 17 close contacts that were not already found manually. It sat outside a coherent national service architecture and, when it faltered, each state and territory stood up its own QR check-in app. I remember warning colleagues that unless the Service NSW app stayed both useful and usable, it would meet the same fate. People only keep apps they use. 

The lessons from NSW, the ATO and Services Australia prove that digital government is possible here. The Digital Transformation Agency has laid foundations in common capabilities and standards. The challenge now is scale and consistency.

Across the Commonwealth we can see green shoots. Services Australia has improved payment systems and digital engagement. The ATO has shown how data can support proactive services like pre‑filled tax returns. Jurisdictions are modernising licensing, registrations and identity artefacts. These are real gains, but too often isolated or short lived. Our task is to connect them into a coherent national experience.

The machinery of government must embed agility by design. These four shifts turn aspiration into delivery.

None of this diminishes accountability. It improves it. Frequent delivery, transparent metrics and open engagement give ministers, secretaries and citizens clearer line of sight on what is working and what needs to change.

National scale also needs federal alignment. Shared rails for identity, payments, notifications and consent would let Commonwealth and states build once and reuse everywhere. Citizens should not care who owns the system. They care that it works, that it is secure and that it respects them. A compact on digital public infrastructure — akin to other agreements like the National Health Reform Agreement — would be a good place to start, with states and the Commonwealth agreeing to align on standards while keeping local innovation.

Big reforms fail when they try to do everything at once. The key is to focus on platforms that unlock value across the system and earn trust with visible wins each quarter. 

For me, Digital ID is the most important reform by a country mile. Once you establish a truly federated and interoperable, secure, citizen‑led identity, you can anchor other credentials around it, from skills to health. Just as importantly, Digital ID improves the big three: privacy, security and personalised service delivery. It reduces fraud, speeds up onboarding, simplifies compliance and unlocks new service models in both public and private sectors. The digital driver’s licence proved Australians will adopt high‑trust identity artefacts when they are convenient and respectful. The next step is a national, interoperable framework with clear standards, strong safeguards and citizen control by design. 

A clear digital identity lays the foundation for further use cases.

Consider, for instance, a skills wallet. This would let people carry verified credentials through their career, from formal degrees to micro‑credentials, licences and checks. It reduces friction for employers and helps workers move faster into new roles. In NSW we digitised trade licences and checks like the Working with Children Check. At national scale, a Skills Wallet interoperable ecosystem would support resilience in a labour market shaped by automation and new technologies, and help address hysteresis by shortening the time it takes to re‑enter the workforce.

Health data presents another valuable use case. Currently, health data is fragmented across providers and jurisdictions. A health wallet, built on digital ID, would put individuals at the centre, allowing them to hold and share their information securely with clinicians and carers. This would improve continuity of care, enable preventive health and reduce duplication. For clinicians, it means better information at the point of care. For patients, it means empowerment and better outcomes. For the system, it means efficiency and safety.

Digital reform is not about replacing people with technology. It is about empowering people through technology. I have seen this first hand in NSW. Service NSW, the digital driver’s licence, the vouchers and the Digital Restart Fund showed that transformation can work at scale when you anchor it in trust, usefulness and iteration. Customer satisfaction in the mid to high nineties, millions of active users and measurable economic returns prove that citizens reward services that respect their time and dignity.

Australia now faces a straightforward choice. We can continue with fragmented approaches that frustrate citizens and drag on productivity. Or we can scale what we know works. The prize is significant. By 2030, Australia should deliver an interoperable Digital ID that puts citizens in complete control of their personal information, with integrated digital wallets containing their essential skills and health data, culminating in a comprehensive system where Australians own and control their digital identity, credentials, and health records through secure, citizen-controlled wallets.

This is ambitious but achievable if we align across the federation and commit to agile data, agile decisions, agile funding and agile thinking.

We should not downplay the difficulty. Commonwealth–state fragmentation, short election cycles and cultural inertia are real. Yet the evidence is clear and the need is urgent. The question is whether we have the conviction to act with speed and purpose.

If citizens can trust a government app as much as they trust their local café or footy club, then we will have done our job. The poll booth conversations will take care of themselves.