Digital transformation in government is no longer a distant ambition—it is a present-day necessity. Across Australia, the rapid evolution of citizen expectations, economic pressures, and technological innovation are reshaping the landscape of public sector service delivery. Two forces stand out as particularly influential: the ongoing cost-of-living crisis and the emergence of generative artificial intelligence (AI). Together, these trends are accelerating, complicating, and, at times, impeding the adoption of digital government services. Understanding their impact is essential for agencies seeking to future-proof their digital strategies and ensure equitable, trusted, and effective public service.
Australia’s cost-of-living crisis has had a profound effect on the digital transformation journey. According to the latest Publicis Sapient Digital Citizen Report, the number of Australians describing their financial situation as precarious has surged by 85% compared to the previous year. This financial stress is not just a personal hardship—it is a macroeconomic force that shapes how citizens interact with government services.
Survey data reveals a clear correlation between financial stress and digital service adoption. One-third of respondents in households earning less than $100,000 reported struggling to find, use, or understand online government services, compared to just 23% of higher earners. The digital divide is widening: lower-income, unemployed, and less-educated Australians are less likely to engage with digital services and more likely to report negative experiences. For those most in need of government support, digital barriers can mean missed opportunities for assistance and increased risk of being left behind.
Despite these challenges, overall satisfaction with digital government services remains high—93% of Australians express satisfaction with the quality of digital offerings. However, the data underscores that financial stress is a key impediment to digital inclusion. When people are under economic pressure, they are less likely to access and benefit from digital services, even though these services could help alleviate their stress.
Alongside economic pressures, the emergence of generative AI is reshaping both the capabilities of government and the expectations of citizens. AI holds immense promise for improving service delivery, personalizing citizen experiences, and driving operational efficiency. In Australia, 40% of citizens have used generative AI in the past year, and 21% use it weekly. More than half (55%) support the use of AI to enhance government services.
Yet, this enthusiasm is tempered by significant concerns. A vast majority (94%) of Australians expect strong governance and transparency around AI regulation. Citizens are acutely aware of the risks—data privacy, security, and the potential for job displacement. Nearly half want full transparency into the code behind AI systems, with this sentiment even stronger among those facing financial or mental health challenges.
The lesson is clear: while AI can be a powerful enabler of digital transformation, its adoption must be accompanied by robust ethical frameworks, transparent communication, and citizen engagement. Without these, the risk is not just technological failure, but a loss of public trust that can stall or reverse digital progress.
Trust is the linchpin of digital government adoption. Australia’s experience offers a cautionary tale: despite high satisfaction rates and widespread use of digital services, recent high-profile data breaches and concerns about data management have led to a sharp decline in public confidence. Over half of Australians now express doubts about the government’s ability to protect their data—a dramatic drop from just two years ago.
This trust deficit is especially pronounced among younger Australians, those in precarious financial situations, and vulnerable groups. The result is a direct impact on digital service uptake: citizens who lack confidence in data security are less likely to use digital services, particularly digital identity solutions like myGovID and digital wallets. The digital divide is not just about access or skills—it is about confidence and trust.
To navigate these intertwined economic and technological trends, government agencies must adopt a holistic, citizen-centric approach to digital transformation. The following recommendations are grounded in the latest research and proven best practices:
Australia’s digital government journey illustrates both the promise and the pitfalls of digital transformation in a rapidly changing world. Economic pressures and technological innovation are powerful forces—but their impact is mediated by trust, inclusion, and the ability of government to adapt. By prioritizing digital equity, ethical innovation, and transparent engagement, agencies can accelerate digital adoption, close the digital divide, and deliver lasting value for all citizens. The path forward is clear: future-proofing digital government requires not just new technology, but a renewed commitment to serving every member of society with trust, empathy, and excellence.