The Prime Minister said he was already looking at the idea very carefully but warned there would be costs associated with it.
"What we need to do is assess carefully with industry, with the airline industry in particular, how it would operate to do so in a way that is as cost effective as possible," Prime Minister Malcolm Turnbull told reporters in Sydney.
He has also highlighted initial concerns about keeping disruptions and delays to a minimum.
"It's very important to – if you're going to make a change like this – to get it right. So that's what we're working through very carefully,' Mr Turnbull said.
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Currently passengers who board domestic flights across Australia can do so without showing ID either online or via machine upon arrival even if they have checked baggage.
"You've got to go through this very carefully and make sure that any new requirements are introduced in a way that is effective, both cost effective and efficient," Mr Turnbull said.
