Australian Treasurer Jim Chalmers has shared the government’s financial motivation for its AI push, saying it is critical to improving the nation’s productivity and, in turn, dropping interest rates.
As originally reported by the ABC, Chalmers spoke to the host of the ABC’s That’s Business podcast, Alan Kohler, outlining how AI will lead to lower interest rates and expenses.
While capital expenditure is showing signs of rising, the nation’s productivity levels, business investment and wage growth have hit a standstill over the last decade.
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As a result, rather than higher production leading to increased revenue for expenses and profits, businesses are raising their prices, leading to inflation rises and pressure on the Reserve Bank to raise interest rates.
Chalmers told Kohler that the government’s new AI plan centres productivity increases as its main goal.
“If you look at all the big shifts in the global economy and in our societies – aging and demographics, changing industrial base, geopolitical fragmentation, the energy transformation, all of that is relevant to this technological revolution which we see in AI,” he said.
“For me, it’s central to the work that I do as Treasurer, and it’s central to the work that I do trying to turn around a couple of decades of ordinary productivity performance.
“Everybody recognises at the most basic level that AI has the capacity to make our economy more dynamic, and therefore more productive and the best way to grow our economy over time and lift living standards for people is to make it more productive.”
Chalmers said the most recent budget showed the biggest boost to productivity in three decades, after it cut an estimated $10 billion in compliance costs, forecasting a potential gross domestic product (GDP) lift of $13 billion.
He also commented on Australia’s unique position as an AI investment from tech giants.
“I see a lot of upside in AI when it comes to our economy and our society,” he said.
“When investors look around the world, they see our renewable energy opportunity, they see our government stability, our geography, our national security arrangements, all of that is very attractive to them.”
Chalmers said the government wants to make the most of this.
“One of the brightest parts of our economy right now is the way that business investment has come up substantially. That’s not just about data centres, but they are an important part of the story.”
AI giants are indeed interested in Australian investment, with OpenAI last year laying out its economic blueprint for Australia, giving the government a plan for AI rollout.
Promising an economic growth of $115 billion by 2030 if the government were to adopt data centre construction, the company said: “To secure its AI future, Australia should:
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Roll out national AI skills training for workers, students, and managers.
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Offer targeted tax incentives for all businesses adopting AI.
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Embed AI literacy and responsible use in schools and universities.
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Modernise government services delivery through responsible AI.
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Provide secure access to government data for public-interest AI use.
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Upskill public service and empower a central AI capability unit.
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Reform AI procurement rules to support innovation and pilots.
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Invest in AI-ready infrastructure like data centres and compute.
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Ensure access to affordable, renewable energy for AI infrastructure.
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Establish Australia as a trusted regional hub for AI standards and investment in the Indo-Pacific.”
However, the government has been working closely with OpenAI rival Anthropic, with Chalmers discussing a meeting with CEO Dario Amodei regarding Australia’s AI position.
“The meeting that I had with Anthropic was really about understanding their position, but also conveying our position,” he said.
“It wasn’t Anthropic presenting to us a series of conditions. It was understanding each other’s position.”
Prime Minister Anthony Albanese and the government have maintained a strong position on AI copyright, ensuring that creative works belong to their creators and are not free for AI giants and tech companies to train on, despite that happening overseas.
“Creators need to maintain control of their work; that’s a non-negotiable. How we go about getting to a landing that everybody can live with is part of the work that we will do now,” Chalmers said.
“There is a balance to be struck here. And I’m really confident that we are finding an effective balance to attract this investment, not to deter it.”
AI’s risks to the labour market were also discussed, to which Chalmers said the government was carefully navigating the technology’s ability to displace or change work.
“The big risk is, obviously, that we don’t find a way to make this improve people’s standard of living at work,” he said.
“We are dealing here with some of the biggest, most fundamental issues, not just in our economy, but in our society more broadly. These are historical questions.
“We don’t intend to get it wrong. We intend to get it right.
“Getting it wrong invites a whole bunch of consequences that we don’t want to contemplate.”
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Daniel Croft
Born in the heart of Western Sydney, Daniel Croft is a passionate journalist with an understanding for and experience writing in the technology space. Having studied at Macquarie University, he joined Momentum Media in 2022, writing across a number of publications including Australian Aviation, Cyber Security Connect and Defence Connect. Outside of writing, Daniel has a keen interest in music, and spends his time playing in bands around Sydney.