Australia to Implement Strict AI and Data Centre Regulations

The use of AI in automated decision-making by government departments and agencies will be subject to tough rules under a new national plan, expected to extend to consumer protections, workplace safety and privacy.

As the Albanese government grapples with the rapid growth in the use of artificial intelligence and a boom in datacentre construction, senior ministers have begun work to draw up new rules to ensure safety is built into AI processes inside government, prioritising fairness, accuracy and transparency.

Federal departments and agencies continue to rely on automated decision-making in some service delivery functions, prompting fears increasingly sophisticated AI systems could replace more human-led processes.

Though the saga of the illegal robodebt scheme revealed the unreliability of some automated processes, the rise of AI is already dramatically changing the way data is used across the economy.

Labor said that the attorney general, Michelle Rowland, will lead development of the new rules – coming as AI giants including Anthropic, OpenAI, Microsoft and Google eye major developments in Australia.

The government is also progressing legislation to create a digital duty of care, designed to put the onus on AI companies to build in safety features and proactively address potential harm.

That work is being led by the communications minister, Anika Wells.

A second round of reforms to privacy laws is also planned, billed as efforts to “responsibly strengthen, modernise and simplify Australia’s personal data protection laws”. It will include rules for personal data protection.

The final element of a new work plan announced on Monday will include a focus on AI safety in the workplace.

The prime minister, Anthony Albanese, used a major speech last week to announce plans for a new office of AI within his department, part of plans for a whole-of-government approach to managing and maximising opportunities from the new technological frontier.

He promised “the strongest possible protection” for Australian creatives against misuse of their work and announced plans for rules around large energy-intensive datacentres.

Expected to be legislated from next year, the national rules will govern where the massive facilities can be built.

The assistant minister for science, technology and the digital economy, Andrew Charlton, said on Sunday that the pace of datacentre construction was already proving challenging for governments around the world.

“We already have more than 200 datacentres in Australia,” he told ABC TV.

“Those datacentres consume electricity equivalent to about 2% of our energy grid and there are projections that could grow very rapidly over the next 10 years, potentially even triple over the next 10 years.

“The government has been very clear that we are implementing this world-first AI datacentre standard, and that standard will make sure that local communities are supported, that they don’t face the negative impacts of these datacentres looming over them, being too close to houses, too close to schools, making sure they don’t push up power prices for Australians, making sure they don’t consume drinking water.”

But the deputy Liberal leader, Jane Hume, told Sky that the government’s approach to regulating AI was insufficient, and described Albanese’s speech as lacking detial.

“Talking about regulating AI by introducing rules for datacentres is a little bit like saying, ‘Well, I’ve regulated the fishing industry by setting up a licensing regime for building boats’,” she said.

“There’s so much more to it than that.

“Overregulating them could, in fact, be a problem because it’s not just about setting up certainty, it’s also about alternative opportunities.”