AUSTRALIANS could be required to carry a national ID card at all times and be obliged to produce it when challenged.
Attorney-General Philip Ruddock yesterday announced a study into the issue.
The study will look into what data they may contain and when a person would be required to carry and produce it.
"The question as to whether or not you would need to have a form of national identification which people were required to produce, and that would mean carry with them, is something we would look at, obviously," Mr Ruddock said.
"It certainly would be a massive cultural change but we are living in a very different environment and it's certainly an issue that we should properly look at."
ID cards have been tentatively supported by some state premiers but opposed by big business, who say they will cost $15 billion - or $750 a person - to introduce.
Federal Labor has not ruled out supporting a card, but says the Government has not yet produced any hard evidence they are needed.
Defence Minister Robert Hill urged caution, warning that Australians treasured their privacy.
"I've always been on the cautious side of that issue - I don't believe governments are entitled to any more information about you than is absolutely necessary," Mr Hill said.
Australian Federal Police chief Mick Keelty said he wanted to know what information the proposed cards would hold.
"The announcement by the Attorney-General of a review or an inquiry into it is probably a good idea to see whether the thing is going to be feasible or not," Mr Keelty said.
"We would have a view to put forward, particularly about identity security and identity fraud, which is something that not only faces the Australian law enforcement community but the law enforcement community across the world."
NSW Premier Morris Iemma said the cards could help fight terrorism, crime and fraud.
Mr Iemma wrote to Prime Minister John Howard in September saying they could be a useful law enforcement tool, as long as civil liberties are protected.
But the Australian Chamber of Commerce and Industry said it could not see how ID cards would stop serious crime and terrorism.
"Overseas experience indicates the potential cost of an identity card could be as high as $750 per person or around $15 billion in total - and that does not include the flow-on effects to business," an ACCI spokesman said.
The ACCI is also worried the business community would become entangled in the ID card process and that businesses would be required to manage and store confidential information in areas such as employment verification.
Labor security spokesman Arch Bevis said the Government should be focussing on more practical efforts to defeat terrorism.
"A national ID card would not have prevented the London bombings, the Bali bombings or September 11," he said.
The debate over whether Australians should be required to have a national identity card has been reignited following an announcement by Attorney-General Phillip Ruddock yesterday that a study will be conducted.

The concept is not new, being first floated by Bob Hawke in 1986. The idea was abandoned after being defeated in the Australian Senate and due to strong criticism.

The government cites terrorism and fraud protection as needs for a universal national identity system.

The opposition remains neutral on the proposal, saying only that cost and privacy would be major issues.

Defence Minister Robert Hill is cautious of such a plan, saying "I don't believe governments are entitled to any more information about you than is absolutely necessary".

The Australian Chamber of Commerce and Industry, which represents big business in Australia has voiced its opposition to the plan claiming the system could cost $750 per person to introduce, most of which would be borne by big business.