Governments Race to Set the Rules for AI and Data Centres

The impact of artificial intelligence and data centres on the Australian Government along with communities overwhelmingly dominated the mentions this month, with data centres, AI infrastructure and the reported OpenAI incident generating more mentions than any other issue. The announcements and issues demonstrated the wide range of challenges posed, from government data security to the impact of data centres on resources to the economic opportunities for Australia. The Commonwealth opened a consultation on nationally consistent standards for large data centres and frontier AI training, the Victorian Government released its Sustainable Data Centre Action Plan, and two Federal Parliamentary Committees are conducting separate inquiries into AI and data centres.

The OpenAI incident, which involved an AI agent accessing Medicare data, drove a separate burst of political activity focused on data security and governance. Deputy Prime Minister Richard Marles and Finance Minister Katy Gallagher provided an update on the incident, and calls emerged for government datasets and systems to be audited, and for OpenAI representatives to front Parliamentary inquiries. The incident occurred while Prime Minister Anthony Albanese was in New York for the United Nations General Assembly, where he identified AI as a key issue demanding global cooperation, pointing to the OpenAI incident as illustrating the need for safeguards.

Gas was the next most active issue, with the Government conducting a two week consultation on the exposure draft of the legislation establishing a Domestic Gas Reservation Scheme. Live considerations for the Scheme include affordability, export impacts, whether Western Australia should be captured by the scheme, and the implications for manufacturers. 

In state politics, Victoria had its final sitting weeks before the State Election on 28 November. The Victorian Government will enter caretaker mode on 3 November 2026.

Also in Advoc8..

• Minister for Home Affairs Tony Burke released the Government’s plans to bring migration down to the levels forecast in the Budget, including measures to stop ‘visa hopping’, and introducing a ballot system for second- and third-year working holiday visas, with new caps for working holiday visas.
• Regional MPs raised concerns that the Government’s planned migration changes could leave regional businesses unable to find enough staff, particularly in popular tourism destinations. 
• The NSW Government changed the threshold for Independent Planning Commission referrals from 50 to 100 objections and altered councils’ ability to trigger referrals, setting faster development approvals against community input.