An assessment of the Federal Government's plan for a national facial recognition system has raised concerns about its impact on privacy.

Key points: Facial recognition system known as The Capability would house 100 million images

Facial recognition system known as The Capability would house 100 million images Could compile images from multiple databases including Facebook

Could compile images from multiple databases including Facebook Fears hackers could have citizens compromised for life

Fears hackers could have citizens compromised for life Launching by mid-2016

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 2 minutes 31 seconds 2 m 31 s Government promises to address privacy risks of facial recognition system Download 4.6 MB

The Government is planning to spend $18.5 million setting up the National Facial Biometric Matching Capability, known as The Capability.

A Government-commissioned assessment has warned it could collect more information than necessary and there is a risk it will not do enough to protect data.

The Capability will give law enforcement and security agencies quick access to up to 100 million facial images from databases around Australia, including drivers' licences, passport photos, and perhaps even Facebook photos.

The photos will be coordinated through a system called The Hub that will help agencies quickly identify people and tackle cross-border crime.

Privacy activists, such as Australian Privacy Foundation vice-chair David Vaile, are concerned.

"Biometrics, unlike any other form of identification, is tied to your biological existence, which has some benefits for its use as an identifier but it has the great downside that if something goes wrong, if it's breached, if it's hacked, it can't be revoked," Mr Vaile said.

"It's not like cutting up a credit card or getting a new phone number or something.

"Basically if anybody manages to get this, they breach the security, potentially you're compromised for life."

'Right to anonymity' at risk

The Federal Attorney-General's department commissioned a privacy impact assessment of The Hub, which has identified a number of risks.

It said The Hub would leave a metadata trail which could lead to increased tracking or surveillance of individuals.

It warned that if the Hub's functions were expanded, it could lead to people being required to present their photo ID more often.

"The idea that you have to have a single unified identity or that you can't have a right to anonymity or just go about your business is potentially under threat; the more that we move into a show-your-photo-at-every-opportunity situation," Mr Vaile said.

The report also warned that biometric and biographic information passing through The Hub could be vulnerable to hacking or interception.

Justice Minister Michael Keenan said the Government fully or partly accepted all of the 16 recommendations in the report.

He said the report was the first of a series of privacy impact assessments to be conducted as the system is designed and implemented.

The Capability is due to become a reality by mid 2016.