When I had time for such things, I used to go to a gym in Melbourne. One of the things I liked was its great way of dealing with complaints and queries.

A noticeboard in the weights room had a pad and pen next to it. If you wanted to ask something, you scribbled a note, stuck it on the board and waited for a staff reply to materialise on the bottom.

Instead of people having to track down a staff member individually, issues were dealt with by a form of continuous public discussion. It saved time, and gym users could read what was happening in between sets. In most cases you didn't need to raise an issue, because someone else had already done so.

Unfortunately government doesn't usually operate this way. Dialogue with citizens tends to be one-to-one, not general. We broadcast a lot to passive audiences, but when it comes to more active engagement, we're still in the dark ages.

The emerging world of blogging, wikis and social networking enables government agencies to engage with the community in a far more substantial and comprehensive way than ever before. In effect, we can build electronic equivalents of my gym noticeboard. A Nielsen survey released last week shows Australians spend more time on social media sites than anyone else in the world.

The government has just received a report from a taskforce headed by Nicholas Gruen called Engage: Getting on with Government 2.0. It recommends we enable public servants to blog in online communities relevant to their work and develop resources and protocols to support and guide them. It argues for massive cultural change across government, so Web 2.0 mechanisms like blogs and wikis become a standard means of government engagement with the community. It proposes much greater accessibility for public sector data and much freer copyright arrangements for government publications.

Web 2.0 opens up a world of opportunities for better government but also some challenges. More freely available information and deeper engagement between government and citizens will improve the quality of government regulation and services.

It will also challenge public servants and politicians to move beyond traditional mindsets of secrecy, hierarchy and control. While that's great in theory, it won't be easy in practice.

New Zealand is doing some creative things. It set up a Police Act wiki to enable public contributions to debate on reforming the Police Act. Its Families Commission runs an online forum on family issues called The Couch.

The Howard government took some good initial steps in this area. It allowed the Bureau of Statistics and Geoscience Australia to make the most of their data available free under Creative Commons licence.

There's been some blogging at federal and state level recently, but there's a long way to go.

A mate of mine, who works for a Victorian government agency, has been asked by his boss to pursue its Gruen Web 2.0 reform agenda. He was rather amused to discover I'm one of the people responsible for the whole exercise!

Applying Web 2.0 reforms to government raises another interesting question: what about the private sector?

While reading the Gruen report, I thought about the relationship between listed companies and shareholders. If any relationship is even more stuck in the dark ages than that of government and citizens, it's this one. While many company boards and management might quail at the thought, the opportunity for deeper communication with small shareholders has obvious possibilities.

Companies are starting to use Web 2.0 tools. In their book Wikinomics, Don Tapscott and Anthony Williams quote some examples. Procter & Gamble is now outsourcing research and development efforts, using the web to invite scientists anywhere in the world to contribute to solving technical problems and improving products.

Canadian miner Goldcorp went from near-bankruptcy to enormous growth by opening up its exploration and drilling decisions to the world. $US575,000 ($660,601) in prizes on the web led to innovative suggestions from professionals and amateurs, 80 per cent of which yielded positive results. A few weeks ago, a survey reported on US website Information Age revealed 37 per cent of American businesses used Web 2.0 approaches last year.

Australian internet service providers, including Internode and Telstra, use online tools like social networking to support and communicate with customers. The chief executive of Sun Microsystems, Jonathan Schwartz, has long used blogs to communicate with shareholders and customers.

Just like governments, companies can use Web 2.0 technologies to improve what they do and engage better with stakeholders. We're just starting out on this path in the national government. Hopefully our business sector will be pursuing these opportunities even more vigorously and speedily.

Lindsay Tanner is the federal Finance Minister.