MICROSOFT has struck a deal with the Australian government to build cloud infrastructure designed to dramatically modernise how the government handles our data, and the services it provides.

Microsoft, in partnership with Canberra Data Centres, and the Australian government announced the initiative on Tuesday describing it as the first hyperscale government cloud designed to handle unclassified and protected government data.

The basic idea behind the project — which has been about three years in the making — is to modernise the system that underpins services such as healthcare, immigration, border protection, welfare and tax to pave the way for things like individual digital identities and connected health records.

Due to come into operation in the first half of 2018, Microsoft will effectively build two new cloud regions over the top of government data, which is being securely stored in Canberra.

“We’re building cloud platforms close to where the data is. By building our cloud infrastructure in the data centre where most government data already lives we can really unlock some of that data and innovate on top of it,” the lead engineer for Microsoft Azure in Australia, James Kavanagh, told news.com.au.

Described as “nation building infrastructure” the initiative will allow government agencies to unlock the potential of innovative technologies such as machine learning, artificial intelligent bots and blockchain.

It could even usher in a new and more efficient tax system, Mr Kavanagh said.

At a basic level, the partnership will mean that the government can join together services for Australians, helping to connect healthcare records, education records and other data to make it easier to access government services.

“The Australian Government has embarked on a sweeping program of change, bringing digital innovation to the transformation of the Australian public sector,” said Assistant Minister for Cities and Digital Transformation Angus Taylor.

Mr Kavanagh believes being able to unleash artificial intelligence on public data could be a real gamechanger.

“I think what’s going to be key is artificial intelligence and applying things like bots and machine learning and language translation — bringing all these capabilities that frankly right now aren’t really accessible to government because of their security and privacy requirements.”

“Making that available you can imagine some scenarios where blockchain could be used for protecting our healthcare records, you could see artificial intelligence being applied to human services,” he said.

“When you ask government for advice actually getting tailored advice to what you want rather than generic advice to everybody. It’s just incredible the possibilities it could open up.”

Today’s news follows a June announcement in which the Australian Signals Directorate (ASD) formally certified an expanded range of Microsoft Azure and Microsoft Office 365 services for inclusion on its Certified Cloud Services List.

The two CDC campuses are also the only private data centre facilities in Australia with the security controls and accreditations appropriate for the handling of top secret government data.

“We have some of the strongest privacy and data laws in the world,” said Greg Boorer the CEO and founder of Canberra Data Centres.

While the CDC handles secret government data, such data is “isolated and protected in a different way to the data that will enter this platform,” he said.

As the largest provider of data capacity to the Australian government, Mr Boorer said the new partnership is “all around unlocking the potential of that data to the benefit of the Australian citizen”.