The data Australians give to the government will be stored in top secret cloud servers in Canberra as part of a new deal with Microsoft.
The "protected accreditation" deal means more than 400 businesses who have brought ideas to government can now be vetted for potential use of the data.
"I am confident that this can be more secure, (and) can enhance the rights of Australians to their data," Cybersecurity Minister Angus Taylor told reporters on Tuesday.
He promised no data will be sent overseas, and will only be stored in the Canberra Data Centre's top secret servers within Australia.
Microsoft's Australian managing director Steven Worrall confirmed the data would be safe from overseas interests.
"The US government will not have access to Australians' data under this agreement," he told reporters.
Government departments hold masses of data but progress on linking it together has been slow due to privacy, security and processing requirements.
The Canberra Data Centre is majority-Australian owned and its servers are all based in Canberra, with the highest level of physical and digital security.
"It's unusual for Microsoft, a global organisation, to invest inside the data centre of another organisation," Mr Worrall said.
But he said the level of security in the Canberra centres meant it made sense for Microsoft to install its Azure cloud computing platform there.
The announcement featured a demonstration of an app that could take live video and pictures from Australians in the event of a terrorist attack.
The data from that app, from developer Citadel, would be kept in secure government servers and linked with emergency responders, if it were to be rolled out.
Mr Taylor said using secure cloud computing opened up dramatically more powerful options for governments to better target programs to where they are needed.
He also said Australians would be protected thanks to the Consumer Data Right, which will be rolled out in 2018 across various sectors.
"You (will) have an access to and control of your data that you otherwise would not have had," Mr Taylor said.
The Consumer Data Right will operate in the banking sector, before it will be expanded into telecommunications and other industries.
