Government minister David Coleman says it will help protect Australians from identity fraud, which is estimated to hurt one-quarter of the community.

"The face matching services enabled by the bill will assist Australians to access services online more easily and securely," he said while reintroducing the bill to the lower house on Wednesday.

"The bill will also help to reduce the impact of identity crime on the community, helping Australians to prove their identities more securely and easily."

The private sector and local governments will only be able to use the face verification power, with the consent of the person being checked.

Drivers' licence, passport and visa images would be stored by the Department of Home Affairs.

The department would not conduct facial matching, but instead operate as a central router for external services.

The scheme also makes it an offence for Home Affairs workers to abuse the power, and ensures annual reporting to parliament on how the power is being used.

A statutory review would also occur in five years.

The proposed identity matching services laws were agreed in a meeting of all Australian state and territory leaders with then-prime minister Malcolm Turnbull in October 2017.

The government first introduced the legislation to parliament in February last year, but it lapsed at the election.

Mr Coleman also introduced laws which give the foreign minister the power to direct the automation of sharing passport data to commonwealth and state and territory agencies, for national security.

Australian Associated Press