The federal government is promising that in four years Australians will be able to do the "vast majority" of their business with the government online.
The decision to accelerate the "digital first" strategy means applicants for public service jobs may be able to do their first interview by teleconferencing rather than attend in person.
Communications Minister Stephen Conroy has issued a public service "mobile roadmap" to help government agencies use the technology to deliver services.
He said mobile technology had the potential to greatly simplify the way Australians used government services.
The Australian Industry Group welcomed the announcement, saying it should cut red tape.
Already 88 per cent of Medicare claims are submitted electronically and 6.9 million people are registered for online services with the Department of Human Services.
However, across all agencies, the use of digital channels to access government services has plateaued at between 30 to 40 per cent.
"By December 2017, Australians will be able to fully complete the vast majority of their business with government online," Senator Conroy said.
"This includes the initial registration for a service and subsequent transactions.
"Commonwealth agencies will be required to expand key services to smartphone and tablet users as well.
"Just as most people don't want to queue in a bank anymore, people want the convenience of being able to choose to interact with government online."
Senator Conroy said the Australian Communications and Media Authority found that 82 per cent of internet users aged 18 and older expected online services from business and government.
He said the upload speeds available through the National Broadband Network would make high-definition video conferencing practical and affordable.
"Digital First will also call on agencies to offer interviews online with NBN-enabled video-conferencing, instead of requiring them to be in person," he said.
Senator Conroy said a pilot program by the Department of Human Services had been successful.
"The department has been testing the delivery of job-capacity assessments for disability support pension recipients over video-conferencing," he said.
"The feedback has been positive – customers and staff love it, they are finding the service intuitive, high quality and much more convenient.
"With the implementation of Digital First, every service delivery department and agency will look to offer this sort of service."
Senator Conroy said more Australian businesses needed to seize online opportunities.
"Failure to adapt rapidly enough will in turn mean missing out on valuable productivity gains and expanded markets," he said.
"To get the most out of the digital economy, businesses need to start doing things in completely new ways.
"If 10 per cent of Australian employees were to telework 50 per cent of the time, the total annual gains to the Australian economy would be around $1.4 to $1.9 billion."
Innes Willox, chief executive of the AI Group, said Senator Conroy's announcement was a positive development.
"Improving the quality, efficiency and convenience of government service delivery cuts the red tape burden and can play an important role in boosting productivity by saving businesses time and money," he said.