The law was changed in 2009 to allow changes from male to female or vice versa by a declaration from the Family Court, and a change from either gender to "X" by a statutory declaration. A Family Court declaration is still required for a male/female gender change on citizenship documents, but this policy is under review.
A Passport Office spokesman said gender changes on passports could now be made purely by a statutory declaration stating a person's preferred sex or gender identity and how long they have had that identity.
The passport application form still asks people to tick either male or female and gives no indication of any other option, but the spokesman said the "X" option was known to the transgender community.
The commission report said about 400 people recorded their gender as "X". Mr Macdonald, 28, changed his passport to "X" two months ago and has just been to Melbourne and back without raising any eyebrows.
He said he grew up happily as a girl at Bethells Beach without the need to question his identity.
On the web
www.passports.govt.nz/Transgender-applicants
Gender changes
Birth certificate
Apply to Family Court (no change).
Citizenship
Provide Family Court declaration unless sex is indeterminate (no change).
Passport
Provide statutory declaration stating how long you have lived in your preferred gender identity (from November 30).