For Australia to truly harness the power of AI across all sectors, the Australian Government must spearhead AI adoption by becoming a sophisticated and ethical user, says the Business Council of Australia.
The primary challenge for Australia is the rapid pace of AI evolution and the risk of falling further behind. Australia has already largely missed the first major economic opportunity of AI, that of generative AI and large language models.
The era dominated by LLMs is already giving way to a new paradigm: agentic AI, which operates with a degree of independence, capable of setting goals, making decisions, and executing complex tasks without constant human direction.
This shift is the next major wave in AI.
This demonstrates the urgency of our situation. One of the most important levers that governments at all levels – federal, state and territory – have to build confidence in AI is adoption in the public sector. However, government uptake of AI in Australia has been slow.
The federal government conducted a trial of generative AI from January to June 2024 and released Policy for responsible use of AI in government in September 2024. More needs to be done to match the scale and speed of the technology.
Leadership will demonstrate AI’s benefits, build public trust, and encourage broader private sector uptake.
Industry is making significant strides in AI adoption and innovation, demonstrating the technology’s transformative potential. However, for Australia to truly harness the power of AI across all sectors, the Australian Government must also spearhead AI adoption by becoming a sophisticated and ethical user.
This involves implementing AI in healthcare for improved diagnostics and efficiency, in education for personalised learning and educator support, and across government services to enhance responsiveness and resource allocation. AI also has great potential to review, simplify and improve complex regulation and policies across all areas of government work.
Such leadership will demonstrate AI’s benefits, establish best practices, build public trust, and encourage broader private sector uptake.
To do so, the government should implement the following three initiatives:
Make it easier to use AI and get good value. Commonwealth agencies must identify and remove barriers to responsible AI use, developing agency-specific AI strategies within six months. They should ensure data compatibility for AI systems and share effective tools across government, while also focusing on recruiting, developing, and retaining AI talent.
Put AI leaders in charge to speed things up. To drive AI adoption, the Australian Public Service should appoint Chief AI Officers within two months and establish AI Governance Boards within three. It may be suitable to appoint one CAIO per ministerial portfolio or have fewer CAIOs covering multiple portfolios. These bodies will oversee AI use, ensuring adherence to governance requirements such as compliance plans, updated AI policies, and maintained AI use case inventories. A CAIO Council should coordinate these efforts government-wide.
Make sure government-used AI is safe for Australian businesses and people. Government AI must be trustworthy, secure, and accountable. Agencies must develop AI risk management policies and implement robust safety measures, addressing high-risk AI use cases.
Australia stands today at the dawn of something truly transformative. Driven by incredible leaps in computing power and data, AI has reached a tipping point. What we do now will determine whether Australia is playing catch up for decades or gains a competitive edge that improves all Australian lives.
Extract from Accelerating Australia’s AI Agenda – Business Council of Australia
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