The Government's privacy code will be overhauled after a series of high-profile errors and concerns the public is losing confidence in its ability to handle personal information.

Australia's top public servant Martin Parkinson announced the overhaul today after extensive lobbying by Information Commissioner Timothy Pilgrim.

In a letter to Dr Parkinson, Mr Pilgrim said the Government needed to ensure it respected privacy and community expectations.

"I have formed the view that there is a need to strengthen the overall privacy governance processes within Australian Public Service (APS) agencies," he said.

"I believe that if this is not done, there is a risk that the community may lose trust in the ability of Government to deliver on key projects which involve the use of personal information."

The Government has been criticised for a number of inadvertent privacy breaches in recent years and Mr Pilgrim said there was an "urgent need" for reform.

The disclosure of a Centrelink client's personal information to a journalist has been heavily criticised by Labor, which considers it an unethical act.

The Australian Public Service Commission was forced to take down its census of up to 96,000 bureaucrats because de-identified data may have revealed who reported misdemeanours.

Former health minister Sussan Ley was also forced to apologise to doctors in September after sensitive Medicare data was accidentally leaked.

"I have formed the view that there is a need to strengthen the overall privacy governance processes within APS agencies," Mr Pilgrim said.

"The broader community must believe that the uses of data which are permitted are valuable and reasonable, considering the relevant circumstances."

The code will be developed by Mr Pilgrim in cooperation with the Department of the Prime Minister and Cabinet and will apply from 2018.

Mr Pilgrim also announced he would conduct an audit of the Centrelink's automated debt recovery program.

The Commonwealth Ombudsman found the program lacked transparency and had treated some customers unfairly.