The 2018 Budget will include $65 million for a new data agency, with plans to overhaul privacy regulations that limit sharing of Australians' data between departments, the Turnbull government announced on Tuesday.
The new office of the new data commissioner will oversee access to government-held data on citizens, working alongside the existing privacy commissioner.
Human services minister Michael Keenan said there were "too many rules and regulations" around privacy that led to public servants refusing data access by default, referring to a Productivity Commission report from last year that found "more than 500 secrecy provisions" in federal law and other guidelines.
"Public servants don't understand it and as a result their answer is generally no, even to sharing data that is not sensitive, that could be easily shared," Mr Keenan said.
"We need to cut through all of that."
The government said privacy protections would "remain strong" and flagged new legislation to "protect the privacy of individuals".
But existing red tape was getting in the way of public servants and academics who wanted to use government data in their research, Mr Keenan said.
Setting up the office of the new commissioner and the planned privacy reforms will cost $65 million over the first four years, according to the government's modelling, which will be published in the upcoming federal budget.
'Data is not an evil'
Mr Keenan said the reforms would help data flow between government departments, as well as allowing "trusted third parties" like university researchers to access anonymised government records.
The recent Cambridge Analytica scandal had made the public fearful of opening up access to data, Mr Keenan said. Much of the government's data was "mundane", including weather records, he said.
"Data is not an evil, in fact it's an enormous good," he said. "The potential for it is monstrous, for what we can do with it."
The minister used the example of the government's recent decision to release its database of around 13 million Australian addresses, which allowed easier auto-fill forms on websites and created a new resource for emergency services and insurance companies.
SBS News asked Mr Keenan if increasing the number of departments with access to sensitive datasets would increase the risk of data breaches, like the recent sale of Australians' Medicare card details on the dark web, which was only exposed by journalists.
"There is an escalation of risk when we're creating all this new data, but the thing is, we've got to respond to that," the minister said.
"So yes, there is more risk, but we've got to understand that there's more risk and make sure that what we're doing is mitigating that risk."
The data covered by the new regime would not be "sensitive national security data", but there could be "some" impact on the flow of information between government departments and law enforcement agencies, Mr Keenan said.
SBS News has contacted Labor's shadow human services minister Linda Burney for a response.
A new 'right' to access your data
The government will also create a 'Consumer Data Right' designed to give customers the right to request digital copies of personal information held by private companies.
The rollout will begin in the banking sector, then roll out to the telecommunication and energy industries, giving consumers access to "transaction, usage and product data", with plans to add more sectors over time.
Treasurer Scott Morrison will lead the reform, which the government said would help improve competition by letting customers "shop around".
