Treasurer Jim Chalmers, in a recent address to the John Curtin Research Centre, articulated a compelling vision for Australia’s transition into the “fourth economy”, a future where technology, and particularly artificial intelligence, plays a pivotal role in driving economic growth. The Treasurer outlined the big shifts affecting the Australian economy: decarbonisation; digitisation and AI; ageing and demographics; and geopolitical shifts from globalisation to fragmentation.
The Australian Information Industry Association (AIIA) endorse this vision. The economic priorities outlined by the Treasurer, from enhancing productivity to fostering innovation, hinge on the successful adoption and integration of AI across every sector of the Australian economy.
However, while the vision is clear, the path to achieving it remains fraught with challenges, particularly in terms of government strategy, funding and support.
There is concern within the tech community that the government’s financial commitment to AI falls significantly short of what is required to maintain Australia’s competitive edge on the global stage. The May 2024 Budget allocated only $39.9 million over five years to support the adoption and use of AI technology in a safe and responsible manner, including $21.6 million for a reshaped National AI Centre.
These funds, while appreciated, are not aimed at driving AI innovation and adoption across the economy but rather focused on risks and regulation which are arguably inhibitors.
The Australian government’s commitment stands in stark contrast to the $2.7 billion investment in AI by the Canadian government and the $1.1 billion by the Singaporean government in their 2024 budgets.
The government will point at the $1 billion allocated within the National Reconstruction Fund (NRF) for AI that has yet to be allocated, despite the establishment of the NRF Corporation a year ago and the recent announcement of a 10-month audit by the Australian National Audit Office only adds to the uncertainty as to when these funds will make a difference.
I gave strong support in the 2021 Budget to the $121 million allocated for AI industry funding however, sadly this money was never spent by the Department of Industry, Science and Resources and was taken away.
Should the Albanese government decide to invest in local AI capability in the 2025 Budget, it would be 2026 and after another election before it would start to make an impact given how slowly the wheels of government turn.
What message are we sending to AI start-ups in Australia and our small but world class AI academics that from the AI roadmap released in 2020 no funding support has been put forward in over 5 years? Sadly, moving off-shore seems to be the answer.
The disparity between the Treasurer’s visionary rhetoric and the actual funding commitments also underscores a concerning misalignment with Australia’s newly announced National Science and Research Priorities.
Only yesterday the government announced after a 12-month process, its options for providing responsible AI adoption guardrails, which the AIIA broadly supports. As a country we need to move faster and be able to focus on both sensible regulations and guardrails but also building local AI capability.
The AI inertia whether it be on regulatory approaches or investment support does little to foster confidence or stimulate the rapid adoption of AI necessary to drive economic growth. This industry sentiment are consistent across the AIIA Tech Index and 2024 Digital State of the Nation report.
The Productivity Commission’s 2024 AI report aptly states, “focus is needed on policy interventions that effectively support safe AI uptake and productivity—particularly governments leading by example in their AI procurement and use.” With anaemic GDP growth of just 1 per cent over the year to end of June 2024 and 0.2 per cent in the June quarter, it is clear that more decisive action is required. Per capita GDP is running at -1.5 per cent for the same 12 month period.
While we appreciate the Treasurer’s understanding of the importance of AI-enabled growth, it is imperative that the government acts with greater urgency. A more measured and coordinated regulatory framework, coupled with strategic and meaningful funding, is essential to empower Australian government and businesses to adopt AI and enhance their competitiveness on the global stage.
The AIIA remains committed to working alongside the Albanese Government to realise the potential of AI for Australia’s future economy and support sensible and timely AI adoption guardrails that the Science and Industry Minister Ed Husic has just released. But this will require not just visionary statements, but tangible, timely action and targeted investments.
The gap between rhetoric and action is getting larger with each passing week and Australia’s future economic growth and the “fourth economy” no less is what is at stake.
Simon Bush is the chief executive of the Australian Information Industry Association
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