The ACCI warned the cost of the card would be largely borne by the business sector, over and above the estimated A$750 per person it would cost to introduce the system.

The warning follows a proposal by Attorney General Philip Ruddock to have an inquiry into the introduction of a national identity card.

Ruddock said the inquiry will examine what information the card should contain, what legislation was needed and how much it would cost to implement. He said privacy fears are misplaced as the Tax Office and Centrelink already hold large amounts of personal information.

While the move has been supported by Prime Minister John Howard, many coalition MPs including Treasurer Peter Costello are sceptical. Another stumbling block is Nationals senator Barnaby Joyce who feels the government is already too intrusive.

Democrats Senator Natasha Stott Despoja also opposes the introduction of an ID card and called for privacy laws to be strengthened.