NSW will move towards digital driver's licences over the next four years and citizens would be encouraged to move away from plastic cards if Premier Mike Baird's government is re-elected on March 28.
The move, which Premier Baird's government estimates could save tens of millions of dollars, would make NSW one of the first places in the world where citizens would be able to choose to have a licence issued in digital format and have it displayed on their smartphones.
While physical licences would continue to be available for those who wanted one, the state government said it wanted to allow people to choose whether they would prefer a digital licence instead of a plastic card on an opt-in basis.
NSW Minister for Finance and Services Dominic Perrottet said the government would task its Digital Council, chaired by the Customer Service Commissioner Mike Pratt, to develop a roadmap for taking all licences digital. They would work through security, privacy and regulatory issues, he said.
"Customers are doing more and more transactions on their smartphones," Mr Perrottet said. "From cafes to banks, businesses are offering customers the opportunity to access their services, loyalty programs and payment systems through smartphone apps.
"While the private sector has shifted to digital, the NSW government must do the same."
There are currently over 123 different licence types in NSW and the state issues over 2.8 million plastic cards each year.
The first licences to be targeted for digital transition would be a range of common licences, including NSW photo cards and boat and fishing licences. This would be followed by driver's licences.
Other jurisdictions such as Iowa and Delaware in the US have already announced their intention to move to digital driver's licence.
But security and privacy experts there have questioned how it would work in practice.
"Would you really want to put an app on your phone that the government wrote?" Chase Cotton, professor of practice in the University of Delaware's Electrical and Computer Engineering Department, told The News Journal.
"They're probably not going to do anything bad, but most people have a lot of private information on their phones."
Police in states other than Iowa and Delaware in the US have also questioned how the proposal would work when people travel interstate, and what happens when your smartphone runs out of battery.
"If they legalise it in Iowa and Delaware and I travel to California, will the officer accept my digital license there?" Lewes Police Chief Jeffrey Horvath told told The News Journal. "Would he have the equipment to scan, read it and verify it?"
Despite this, Mr Perrottet said NSW Police Commissioner Andrew Scipione was a strong supporter of the move and would be consulted closely during the implementation.