The Prime Minister, John Howard says a new government 'smart card' is not an identity card and people won't be required to have it with them at all times.
The hi-tech card will merge the Medicare card and up to 17 others giving the holder access to welfare services and benefits.
Mr Howard says it is very different to the 'Australia card' which was rejected in the 1980s.
But he says it does have a role to play in protecting the country from terrorism because of the personal identity details it will contain.
"20 years ago when the Australia Card was knocked over we did not know of Osama Bin Laden. We had not had the 11th of September. And we did not live in such a globalised world economy. Everything has changed so much."