On 15 July 2026, Prime Minister Anthony Albanese (Prime Minister) announced by media release an expansion of the Federal Government’s (Government) existing artificial intelligence (AI) governance framework, including the establishment of a new Office of AI as well as plans to legislate national standards governing large-scale data centres, AI training and the use of Australian copyright material.

The Government expects to introduce the proposed laws into Parliament in early 2027.

Establishment of the Office of AI

The Office of AI commenced operation within the Department of the Prime Minister and Cabinet on 15 July 2026.  The Prime Minister said in his media release that the Office of AI will coordinate the Government’s AI policy across departments and oversee the development of the proposed Australian Standards for AI.  Those standards will build on an existing body of voluntary guidance under the Government’s National AI Plan, including the National AI Centre’s Guidance for AI Adoption and its earlier Voluntary AI Safety Standard, as well as international standards adopted by Standards Australia.  These standards remain voluntary unless incorporated into legislation, regulation or contractual obligations.

Mandatory standards for large data centres

The proposed standards will establish nationally consistent rules concerning where large data centres may be built and how they use electricity and water.

The Government intends to create a legal obligation for the next generation of large-scale data centres to fund new electricity generation, pay their full grid-connection costs and contribute at least as much electricity to the grid as they consume.

The Prime Minister described the intended approach as requiring data centres to become “net-generators, not net-users.”

Data centres will also be required to minimise their water consumption, maximise energy efficiency and pay for additional water infrastructure required for their operations.  The Prime Minister said in his speech that these measures are intended to ensure that the rapid expansion of data centres does not increase household and business electricity costs.

 AI training and use of copyright material

In his speech, the Prime Minister made the following statements:

“Australian writers, musicians, artists and journalists must retain ownership and control of their work.
Our laws will spell that out, plain as day.
An artist’s creative endeavour is their work and their property.
No company should use Australian books, music, art or news to build or train AI without the artist’s control.
That includes the artist’s control of the price and value of their work.
Anything less, is theft”.

The Government’s proposed standards are therefore expected to address whether copyright material may be used for AI training and the conditions or compensation for rightsholders applying to that use, though no legal model has been released.

What the announcement means for businesses

The proposed changes have not yet been legislated so this announcement does not alter existing legal obligations of data centre operators, AI developers or businesses adopting and using AI. 

More useless red tape or necessary guardrails?

Here’s hoping that the Office of AI doesn’t stifle the very innovation they state they intend to foster by adding to the significant administrative and compliance burden on businesses adopting AI by requiring them to:

• register with the Office of AI;
• conduct a risk assessment of the AI System adopted;
• develop an AI Compliance System;
• appoint an AI Compliance Officer;
• assign a “risk rating” to the AI System implemented;
• consider the impacts of the AI System adopted on disadvantaged or vulnerable consumers;
• conduct risk assessments into whether or not consumers and employees could be affected by the adoption of AI and keep records about the risk assessment process undertaken; and
• complete technical risk assessments into the security of any personal information collected and stored in an AI system;

That said, it seems inevitable that one of the consequences of this “innovation” at least in part will be consequential amendments to the Privacy Act 1988 (Cth) and the Criminal Code Act 1995 (Cth) to introduce offences that relate to irresponsible implementation of AI Systems by businesses. 

What happens next?

National Cabinet is expected to consider the proposed framework in August 2026.  The Government will then consult with industry, state and territory governments, trading partners, copyright owners and other stakeholders before introducing legislation, which is presently expected in early 2027.

Further details are also expected concerning the Government’s broader AI consumer-safety priorities and the relationship between the Office of AI and Australia’s $30 million AI Safety Institute which became operational in June 2026.

Links and further references

Federal Government publications

Media release, ‘AI in Australia’s Interests’, 15 July 2026.
Speech, ‘AI in Australia’s Interests’, 15 July 2026.

Existing voluntary Australian AI guidance

National Artificial Intelligence Centre, Voluntary AI Safety Standard: Guiding Safe and Responsible Use of Artificial Intelligence in Australia.
Australian Government, Guidance for AI Adoption: Implementation Guidance.

Standards Australia Information Technology standards

Standards Australia, Artificial Intelligence — Management System standard, AS ISO/IEC 42001:2023 (2023).
Standards Australia, Artificial Intelligence — Guidance on Risk Management standard, AS ISO/IEC 23894:2023 (2023).
Standards Australia, Governance of IT — Governance Implications of the Use of Artificial Intelligence by Organizations standard, AS ISO/IEC 38507:2022 (2022).

Legislation

Privacy Act 1988 (Cth).
Criminal Code Act 1995 (Cth) sch 1.

Further information

If you need advice on the legal obligations when implementing AI into your business, please contact us for a confidential and obligation‑free discussion.

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances

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