The Minister for Justice and Customs, senator Chris Ellison, said the report -- compiled by the Securities Industry Research Centre of the Asia Pacific -- pinpointed identity theft's involvement in criminal and terrorist activity worldwide.
Ellison said in a statement: "The use of false or stolen identities underpins fraudulent acts against governments, business and individuals and can also underpin terrorism, people smuggling rackets and illegal immigration.
"It is not only individual victims that feel the pain of identity fraud -- the impact also affects the way in which government and industry provide products and services, which has a flow-on effect for the entire Australian community.
"False identities lend anonymity to the perpetrators of crime, which makes tackling identity fraud a major ongoing challenge for governments and law enforcement agencies.
"Globalisation and e-business mean that transnational information flows can occur instantly without the need for face-to-face contact -- and, unfortunately, also means that transactions using stolen identities can occur quickly and with relative anonymity".
Ellison said a Federal Trade Commission survey in the US calculated the cost to business and financial institutions to be $48bn (£28.9bn) last year, with consumers losing $5bn, while the UK Cabinet Office estimates the cost of identity fraud to the UK economy is at least £1.3bn in 2000/01."
He said government had released a number of initiatives to deal with identity fraud, including:
The development of proposals for a common set of proof-of-identity documents of higher integrity to be used by government agencies An online document verification service for government agencies, and Enhanced data matching across government agencies to detect fictitious identities and "cleanse" registers for government agencies.
Other initiatives at the Commonwealth level, he said, included SmartGate technology being trialled by the Australian Customs Service to combat passport fraud, new passports with tamper-proof laminate, and more stringent requirements for proof of identity when applying for passports.
Ellison also cited a range of collaborative initiatives between the Commonwealth and state governments, including:
The Australian Crime Commission's Identity Fraud Register, which provides valuable intelligence to law enforcement by keeping a register of identities suspected of being fraudulent; The approval by the Board of the Australian Crime Commission of a Special Intelligence Operation on Identity Fraud, allowing the ACC to use its coercive powers to assist identity fraud investigations, as appropriate; The High Tech Crime Centre, formed earlier this year, which involves the Australian Federal Police (AFP) working together with international counterparts such as the FBI Cyber Crimes Division to investigate computer-related crimes such as fake Web sites.
