Responding to the announcement in the 2006/07 federal budget of the government's funding for an access card for health and welfare services, Thomson expressed concern that cost blowouts are likely.
"Given the current government's previous track record with IT implementations such as the Customs debacle, such a figure is fictional," he said.
Thomson called on Human Services Minister Joe Hockey to release the full KPMG International cost report to increase public confidence in the benefits of a smartcard rollout.
To date, Hockey has released only an edited version of the report.
As a result, Thomson believes the government is hiding the real cost projections from the public.
"Government industry experts have suggested that the cost will be more than A$1 billion and even the head of the smartcard taskforce has resigned due to a lack of confidence in the project," he said.
"The KPMG report came up with a figure of A$2.3 billion to implement the smartcard which is vastly more than what the government is saying.
"The government is rushing ahead without considering public acceptance and there are myriad unanswered questions," Thomson said.
Thomson hopes the current tendering process will answer some of those questions.
He said scope creep will be the biggest problem and determine if the rollout will be a worthwhile exercise.
"If using the smartcards will cut A$3 billion in welfare fraud over a 10-year period and cost us A$1 billion to implement ... the big question is, will this A$1 billion hold or blow out."