Treasury analysis prepared for Treasurer Jim Chalmers suggests Australia could miss out on an economic boom if AI is not more widely adopted. Photo: Michelle Kroll.
The take-up of artificial intelligence in Australian businesses is low, with less than 10 per cent of firms reporting a significant adoption of the technology.
This analysis has led Treasury to warn that Australia could miss out on the economic benefits of the AI boom unless wider use of AI is embraced.
The department has given Treasurer Jim Chalmers its detailed analysis of where the nation stands on AI, with advice that businesses should be encouraged to change their attitudes.
About two-thirds of businesses report using some AI, but mostly in a superficial way.
Capital investments, organisational changes and workforce skills were cited as reasons firms have not moved beyond the basic use of AI in their business practices.
Companies involved in finance, insurance, information, telecommunications and professional services have led Australia’s adoption of AI, while health care, education, construction and tourism are proving slower to make the transition.
Australia has 162 operational AI data centres, with another 130 or so on the drawing board.
Treasury’s advice is that job losses have not yet materialised as feared, and the AI boom could pass Australia by without a change in mindset.
It is, however, monitoring international signs for job losses in entry-level positions.
The Treasurer’s reported response is that Australia could make the most of the benefits of AI while also minimising the risks of what he describes as the “biggest economic transformation in our lifetime”.
He said advances in AI were happening so fast, with new milestones being reached in weeks rather than years. Australia had to take advantage of the opportunities presented.
“We can’t just sit around and hope the benefits of AI fall into our lap,” Dr Chalmers said.
“We have to reach out and take them.”
The Federal Government is preparing legislation to regulate the rollout of AI, including how data centres must operate.
Except in Queensland and the Northern Territory, new data centres will have to use renewable energy.
Other conditions will govern how energy and water are used, where the centres are located, how local jobs are maintained, and how the rights of authors and artists are protected.
The Federal Government has been forced into committing to these protective measures in the face of widespread public concerns over AI.
But it aims to go full steam ahead in attracting the massive investment AI data centres promise to bring to Australia.
The Treasury analysis points to an AI-supported long-term annual productivity growth of 1.2 per cent.
The Australian Chamber of Commerce and Industry (ACCI) says it believes Australia can seize its share of the AI opportunity, but only if the nation’s economic settings are calibrated correctly.
Chief executive officer Andrew McKellar said the current regulatory and tax settings are not where they need to be to make the most of “this AI moment” in Australia.
“Artificial intelligence is reshaping Australia’s economy. It is changing how businesses deliver services and how Australians access them,” he said.
“AI offers the opportunity to lift Australia’s ailing productivity growth over the next decade, but only if we get the fundamental regulatory environment right.
“Australian business and industry will be able to compete in the AI-era if given a fair go and a level playing field with international competitors.
“Expecting Australian businesses to globally compete on AI while loading them up with excessive tax and regulatory burdens does not compute.
“Australian businesses should not have to engage in this competition with one hand tied behind their backs.”
The ACCI boss said Australian businesses are not only handicapped by one of the highest company tax rates in the developed world, but also by worsening business tax settings.
He said the Federal Budget introduced a “major tax hike” on business investment.
“We also must ensure Australia has policy settings that enable the responsible growth of data centres, not stand in their way,” Mr McKellar said.
“Data centres are critical infrastructure and an essential component of Australia’s future prosperity.
“The policy challenge is not whether data centres should be built, but how they can best be planned, powered and resourced efficiently while maintaining community and investor confidence.”
Original Article published by Chris Johnson on Region Canberra.
