If this is true OpenID Pilot Program to be Announced by US Government is should a huge impact on identity management within government, even in Australia.
If large agencies are willing to accept authentication from third parties, it means that users will no longer have to remember their username and password for each different agency they deal with. One username and password they use on a regular basis is all the need to access the services from any number of government agencies.
It is good for government agencies, it simplifies their task by using a third party to provide industry standard authentication and removing their involvement in password management.
The individual still has to prove their identity to each government agency, but once the identity is proven, management will be simplified.
The system is being constructed so agencies will not be able to match data on the OpenID provided. Though who does not have more than one Yahoo!, PayPal, Google, or one of the other providers OpenIDs? I only have 5 or 6. The paranoid could have one openID per agency, they just have to remember which one they need for each agency. While the rest of us settle down to doing business with government on a more secure basis.