'Unrealistic' rules for AI data centres spark warning

AI could boost living standards but Australians want stronger rules on how it's used. Prime Minister Anthony Albanese announced plans to introduce legal requirements governing AI use and data centres in July. He will convene a meeting of the nation's leaders later in August to discuss data centres to reach an agreement on uniform standards, as Queensland and the Northern Territory hold out. Energy Minister Chris Bowen reaffirmed the Commonwealth would override the two governments if they refused to agree to national policy settings, warning the result would mean higher bills. "What we're not going to do is let one state or one territory dictate to the rest of the Commonwealth or the other states," he told ABC radio on Thursday. "Their way is going to be the lowest common denominator. Nor is it in the best interest of the country." Acting Opposition Leader Jane Hume said the investments were important to ensure Australia's economy was "contemporary and fit for purpose." "If we start putting unrealistic impositions on new data centre investors, particularly trying to make them meet Chris Bowen's 82 per cent renewable energy target, that's just going to turn investors away," she told reporters in Western Australia. Mr Bowen revealed data centres would have to underwrite new energy generation capacity through the renewable electricity guarantee of origin scheme to prove they were fully offsetting the power they used with renewable energy. Opposition energy spokesman Dan Tehan said it was a matter for developers to decide on their energy source. "They should have the flexibility to decide how they go about their energy mix," he told ABC radio. "Our view is we should be technology agnostic when it comes to our energy source." Australia was already the top destination of data centre investment outside the US, but that investment risked being pushed elsewhere by lengthy approval times and slow upgrades to energy and water infrastructure. A report by consultancy EY showed AI could deliver Australia's economy a productivity boost of up to 2.4 per cent, potentially ending a decade of weak productivity growth responsible for the nation's declining living standards. This would result in a $116 billion increase to real GDP and an extra 44,000 jobs in the economy. Labour productivity growth had averaged just 0.3 per cent a year in the past decade, which is why the potential uplift from AI matters. Whether Australia can fully harness AI's productivity potential depends on whether it gets the regulation right. While businesses cautioned that greater regulation would limit AI adoption, more than 80 per cent of Australians wanted stronger rules on how organisations use AI. Despite community fears about widespread AI job losses, EY found most industries would register a lift in employment as a result of productivity gains or stronger real wages boosting demand, although capital-intensive industries such as mining and agriculture could experience a slight decline.