Milton Dick (Speaker) | Link to this | Hansard source

I have received a letter from the honourable member for Warringah proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The urgent need for the Government to ensure AI data centres are built on Australia's terms by managing local community impacts, mandating developers to fund clean energy, transmission and water infrastructure, and ensuring the benefits of AI are shared across society.

I call upon those honourable members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Zali Steggall (Warringah, Independent) | Link to this | Hansard source

AI data centres are not just warehouses full of servers. They are the physical infrastructure of the future economy. Like all transformative technology, AI presents extraordinary opportunities alongside significant risks that must be managed. Data centres draw on our energy system, water resources and local communities. If global hyperscalers want access to Australian resources, they must help build the clean energy, transmission and water infrastructure their projects depend upon. The government's data centre voluntary expectations document is a start, but expectations are simply not enough. They should be mandatory, enforceable and transparent.

AI is often viewed as software, but the technology that enables it has profound impacts on the physical world. Demand is accelerating rapidly as generative AI expands and more advanced, agentic systems emerge. This presents a genuine opportunity for Australia. We have abundant renewable resources and world-class research institutions. If AI infrastructure is built here, we gain a seat at the table where the rules, standards and governance frameworks of the AI age are being written, rather than leaving those decisions to others in other nations.

The risks are equally real. The Clean Energy Finance Corporation has warned data centres could account for up to 11 per cent of Australia's electricity consumption by 2035. Without matching investment in new generation, storage and transmission, households and businesses will face higher costs and our net zero ambitions will become harder to achieve. Communities are also raising legitimate concerns about land use, noise and environmental impacts.

The key question is whether Australia is prepared to set the rules before the concrete is poured on new centres and the cables are laid. There currently are simply insufficient protections in place for Australian communities. The government's expectations document points in the right direction, but it is an expectations document. It has no bite and no real strength to it. It doesn't actually provide any protections to the Australian people. Major AI data centres should proceed only where developers can demonstrate they will bring the necessary infrastructure with them. Households should not subsidise hyperscalers.

This debate is also about more than just energy, water and planning approvals. The other question is of sovereignty and the right to scrape public data and make sure that appropriate remuneration and sovereign control over our Australian data is ensured. Foreign laws such as the US CLOUD Act can extend beyond national borders. Australia should welcome AI investment, but critical data and infrastructure must remain governed by Australian law. This means stronger standards, audit rights and encryption controls.

AI is also built on data, much of it created through human effort—journalism, writing, creative, music, film, image and culture. A practical licensing or levy framework can support innovation while ensuring that creators share in the value they help generate. We cannot let this become another situation where an Australian resource—our public data—is used for profit by others without proper remuneration domestically. So, that practical licensing or levy framework must be established.

As a high-skill, service based economy, Australia is particularly exposed to AI-driven disruption across professional industries. If we get this wrong—and this is on the Albanese government—productivity gains will flow to a smaller number of global technology companies while Australian workers carry the disruption. The challenge of AI is that, by the time regulators understand today's technology, tomorrow's technology has already arrived. We should be honest that the social impacts of AI are not yet fully knowable. AI will affect more than productivity. It will shape how people learn, work, trust, form relationships and participate in civic life.

The lesson from social media is that a non-independent AI Safety Institute with inadequate separation from the department of industry and far less technical expertise than its US and UK counterparts leaves Australia dangerously exposed. That is why Australia must ensure that the AI age is built on our terms, with safeguards and for our people, not just focusing, as I understand the minister has, in roundtables, on seeking to ensure investment but not the protections necessary for the Australian people.

Andrew Charlton (Parramatta, Australian Labor Party, Cabinet Secretary) | Link to this | Hansard source

I thank the member for Warringah for this matter of public importance, and I thank her and many members of the crossbench for the way they've engaged in this issue, balancing both the risks and the opportunities. The question of how Australia approaches data centres is an important one for our nation. It's important in part because of what's inside those data centres: artificial intelligence, which is going to be one of the most consequential technologies in our economy over the next several decades. In the 19th century, economic power rested on coal and in the 20th century on oil, and in the 21st century it will rest on computation. AI is the issue; data centres are simply where the AI happens.

The Albanese Labor government is determined to ensure that all Australians benefit from AI. To get those benefits we need to shape and shepherd AI to make sure that it works for Australians and not the other way around. Late last year the government released its National AI Plan. It set out a simple proposition that the role of government is neither to stand back and hope nor to stand in the way; our role is to ensure that AI develops in line with Australian values, Australian laws and Australian interests. As part of that plan, we've set out a set of clear expectations for the companies building the physical foundation of the AI economy: data centres. Those expectations include what I call a triple lock on energy. There'll be members of this parliament who want to pretend that we can stop or ignore AI. I think that's irresponsible. AI is here. The arrow is loose from the bow. Our job is to make sure we benefit from it.

It's important to note that the AI boom is no small thing. The investment now flowing into data centres is on a scale that is difficult to overstate. Moody's expects global data centre investment to reach $3 trillion in the next five years. For Australia, this boom could ultimately prove to be bigger and more consequential than the mining boom—a boom that shaped our prosperity for a generation. The question isn't whether the boom is coming; the question is: on what terms do we let it in? The government's approach is not to be boosters of AI and not to be naysayers. We want to be pragmatic, and we need to be clear-eyed about both the big risks and the big opportunities that flow from this boom.

Let me be clear about the risks first, because they are real and Australians can see them. First, let's talk about energy. Around the world, data centres are pushing up prices in countries where these centres have not been well managed. In the United States, it's already happening. In the PJM grid, one of the largest in the country, the Independent Market Monitor attributed more than half of one year's surge in capacity prices to data centres—more than US$9 billion in additional power prices billed straight back to households. We cannot let this happen in Australia, and we need to act early to make sure that it doesn't. Today, data centres use around two per cent of the electricity in our National Electricity Market. That sounds modest, but the trajectory is steep and, if demand arrives faster than new supply, the consequence is obvious: prices rise and households feel it.

There are also concerns about water. Nationally, the volume is still small. Data centres use around one-one-hundredth of what mining uses, but that use can be locally acute, and some communities overseas found that out when taps ran dry during construction of data centres near them. There are also community concerns about the noise of data centre clusters, their visual impact and industrial sites built close to homes. These are real concerns and they deserve real answers. We've seen it here in Sydney. A single proposed data centre in suburban Sydney drew a record 374 objections and just nine submissions in support. Residents were worried about noise, diesel generators and a facility that is barely 160 metres from a local primary school.

These risks from data centres are not theoretical. They are materialising around the world, and almost every country that was slow to address the data centre boom has had problems caused by it. The United States let the market lead and is now improvising after-the-fact fixes amid a huge public backlash. Ireland let data centres pass 10 per cent of national energy demand before the grid around Dublin seized up and new connections were frozen. Singapore has had to halt approvals. The pattern around the world is unmistakeable. The countries that were slow to manage the costs were the ones that faced the worst consequences, so that's exactly what our approach in Australia addresses.

Under the National AI plan 2025, we've released our expectations of data centres and AI infrastructure developers. These are not red tape. They are the foundation of the sector's social licence to operate here. They are a plain statement of what we expect in return for access to our grid, our land and our market. They're framed as expectations, as the honourable member pointed out, because they cover areas of responsibility that intersect with state, territory and local governments. For that reason, as a federal government, our approach has been to outline our expectations first, which we've done, and then work with other jurisdictions to create alignment and certainty to make these expectations binding across the Commonwealth. That is the path we have laid out and the path we are making progress on.

Let me lay out what these five expectations do. The first expectation is the national interest. We expect that this investment will build genuine Australian industrial and technological capacity, advancing our sovereignty and security, not simply adding floor space and consuming our resources. The second expectation is energy, and it's at the heart of this framework. Here we are applying our triple lock. The first component of that lock is that we require data centres to bring their own renewable energy supply, underwriting fresh generation rather than drawing down power that households and businesses are relying on. Second, we expect them to pay their full share of grid connection to cover the cost of the poles, wires and transformers they require and make sure that those costs are not passed on to people's bills. And we expect them to be demand flexible, working with market operators to dial their consumption up and down so they strengthen the grid rather than strain it. These three things—bring your own supply, cover your network costs and be demand flexible—are the triple lock. These are the things that enable us to look Australians in the eye and say that the growth of data centres will not push up your power prices. Energy ministers across the Commonwealth, states and territories are now working together to embed it.

The third expectation is water. We expect operators to use efficient, modern cooling systems to draw on recycled and non-potable sources wherever they can.

The fourth expectation is workforce and skills. We expect this build-out to invest in Australians through apprenticeships, training and partnerships with our colleges and universities, so the boom leaves behind a deeper pool of local capability than it found.

And the fifth expectation is innovation. We expect the global operators to make their computing power available to Australian start-ups and to partner with Australian researchers, so the benefits of this build out flow to Australian ideas, not merely Australian real estate.

This last expectation matters a lot, because it goes to the question underneath all of this: why are we all doing this? The AI economy is coming, whether we are ready or not. What is not settled is our place in that economy. We can be a country that rents intelligence by the month from foreigners on terms set in another hemisphere, or we can be a country that helps build it, owns the infrastructure, trains the people and shapes and regulates the technology to our own values and our own interests.

The choice is not whether the boom arrives; it is whether Australians end up as tenants in someone else's digital future or owners of our own. At its heart, whether we have AI in Australia or not is an issue of sovereignty. When our government activities, our research and our AI models run on Australian soil, we are not a tenant in someone else's economy. And, in a contested region, that is not a luxury. It is about national resilience.

That's why this debate matters so much. We must be clear eyed about the risks and the opportunities and make sure that data centres and artificial intelligence benefit all Australians.

Zali Steggall (Warringah, Independent) | Link to this | Hansard source

Thank you to the member for Warringah for bringing forward this matter of public importance to the parliament. The National AI Plan commits to capturing the opportunity of AI, spreading the benefits and keeping Australians safe. My concern today is whether we really have the policy settings to achieve all three, or whether we are trading long-term sovereignty for a short-term sugar hit.

Let's be honest: the opportunity is real. Australia has genuine competitive advantages, abundant renewable energy, land, geopolitical stability and proximity to the Indo-Pacific market. In 2024, we ranked second globally as the most attractive destination for data centre investment. Data centre investment has kept GDP out of negative territory, so this really matters, and AI data centres have been and will be an important part of our economy.

And be honest: megabytes are far easier to export than hydrogen. Unlike our earlier superpower ambitions, digital infrastructure doesn't need a port, but it still needs power, and there is a strong sovereign capability case for having AI training and inferencing happening here on Australian soil. This case was made sharply when the US issued an export-control directive to Anthropic, cutting off Australia's access to frontier AI models overnight.

Australia already has more than 160 operational data centres, and there are more than 90 in the pipeline. In New South Wales alone, there are 44 projects totalling 11.4 gigawatts, equivalent to nearly four Eraring coal stations. It's a dominant driver of new electricity demand, and there are many people concerned that we can have the clean energy transition, or we can have data centres, but we can't have both. But we need to have both.

AI has voracious appetite for land, energy, water and construction. Other countries have acted. Singapore imposed a moratorium. The US had tech companies sign a ratepayer protection pledge. Ireland now requires data centres to source 80 per cent of demand from new renewable energy. The public is right to be concerned. No-one wants big tech put before the planet or corporations put before Australians. Trust that the government will defend Australia's interests is fraying.

Let's start with energy consumption. I recognise that the government has put in a statement of expectations and that this sends an important signal. I note the minister's comments that this is partly because of the different jurisdictional challenges in Australia and the roles of local, state and federal government. But businesses need certainty, and so do Australians. The work that the government is doing in this space needs to speed up so that we have greater certainty about what we are going to get as a nation when these data centres are being put in every single day.

The point that we also need to make is that the broader energy framework is not coherent, and that is a problem too for data centres. Centralised data centres must bring their own renewable energy under the statement of expectations, but the same compute distributed across office buildings carries no equivalent obligation, despite being less efficient. The treatment of new versus existing industrial demand is equally arbitrary when it comes to electricity. Tomago Aluminium draws close to a gigawatt—roughly 10 per cent of New South Wales electricity supply—and not only faces no BYO requirement of renewable energy but will actually have its energy use subsidised. There may be good reasons for these distinctions, but the government hasn't articulated them, and we do need a coherent approach in terms of industrial-scale energy requirements.

The deeper problem is that the government is approving demand that, at the moment, we cannot supply. New South Wales solar projects now average 1,384 days to clear planning—almost double 2023 levels and more than 10 times Western Australia's 94-day average. Data centres can be built far faster than the renewable energy to power them. That temporal mismatch is where the anxiety lies. If it isn't closed, Australians will pay through higher emissions, higher prices or both. Unlike approval, global demand for compute cannot be paused. Refuse the investment and it simply moves beyond Australia's reach. The answer is faster infrastructure approvals, locational price signals that guide investment to where the grid really can support it and the discipline that supply must precede demand, not chase it.

Australia has been here before. We've extracted gas, exported it and watched Australian industry pay some of the highest gas prices in the world for a domestic resource when we had expanded supply. We must not make the same mistake with compute. Australian energy should benefit Australians. That means energy abundance, with industry that follows, not competes with, households. It means sharing the productivity gains from the technology and building domestic sovereignty. We can't hold back AI; we need to build with it.

Claire Clutterham (Sturt, Australian Labor Party) | Link to this | Hansard source

Artificial intelligence is no longer a future concept. It is here, it is growing rapidly and it is reshaping our economy in real time. This discussion is not just about AI as a technology and what it can do. It is about the infrastructure behind it—the data centres and AI facilities—and ensuring that they are built and maintained in Australia's national interest and in the interests of the Australian people. AI must work for Australians, our economy, our communities and our future.

There is no question that AI brings with it enormous opportunity. When harnessed for constructive purposes, it drives productivity, supports innovation, strengthens industries and enables world-leading research. Data centres are a part of this. They operate to power the digital services Australians rely on every day. They create jobs and they support a modern economy. But with that growth comes responsibility. That is why the Albanese Labor government has a clear national expectation for data centres and AI infrastructure developers to ensure this investment delivers shared benefits, not just shared costs.

At its core, this is about making sure AI infrastructure in Australia serves our national interest. These facilities are not just commercial assets, they are strategic. They go to data sovereignty, national security and community trust. We expect developers to engage openly with local communities, businesses and government to minimise impacts and operate in ways that deliver real benefits for Australians. Equally important is how this infrastructure interacts with our energy system. AI data centres are highly energy intensive, and it would not be acceptable for that demand to place upward pressure on prices for Australian households and small businesses. Our approach is clear: new developments must support, not undermine, Australia's clean energy transition. That means securing additional renewable energy, contributing fairly to transmission and grid infrastructure, improving efficiency and supporting grid stability.

Those who benefit from this growth must also help build the system that sustains it. They must understand that although government wants to encourage innovation and AI development, there does need to be regulation, with the role of government being to strike that careful and precise balance between encouraging growth and not paralysing business, at the same time as protecting the Australian people and our natural resources. This applies strongly to water, a precious resource that must be carefully managed. We expect data centre operators to adopt efficient cooling technologies, minimise reliance on potable water and engage early with communities, utilities and stakeholders. Transparency and long-term planning are essential to ensuring that these developments are sustainable and resilient.

This is also fundamentally about people—about Australian workers and the economic opportunities that come with this transition. As a Labor government, we will always stand with workers. Labor is the party of workers, and we are determined that the growth of AI infrastructure must translate into secure, well-paid jobs alongside real investment in skills, apprenticeships and training pathways. Australians should not just host this infrastructure; they should build it, operate it and benefit from it. A Future Made in Australia means we are a centre of capability where research and innovation is supported, enabling Australian startups and small businesses to access the computing power they need.

In my home state of South Australia, the state Labor government is taking a proactive approach, making it clear the state is open to AI investment—but not at any cost. With plans to attract data centres, particularly in regional areas, the focus is on creating jobs and economic opportunity while putting in place legislation to manage energy and water use responsibly. We are reflecting the same principle at the federal level. Growth must be carefully managed with clear guardrails so that communities benefit alongside industry.

All of this reflects the broader principle that has guided our approach to AI from the beginning. When it is done properly, there are real opportunities for Australians. The role of government is to regulate without paralysing innovation, to enable growth while ensuring that it is safe, sustainable and fair. We welcome investment, we support innovation, and we want Australia to lead.

Elizabeth Watson-Brown (Ryan, Australian Greens) | Link to this | Hansard source

I'm pleased to support this matter of public importance regarding AI data centres and fully agree with demands for developers to fund the mitigation of their projects' harms. Thirsty for water and hungry for power—that's how the new AI data centres springing up across Australia are being described, and for good reason. Big tech companies are taking advantage of Australia's resources, imposing their damaging data centres on our communities and consolidating their control of our personal data and our economy.

While the government seems okay with Australian land being covered in AI data centres, everyday people are rightly asking serious questions: Why are these data centres being forced on us? What risks do they pose, and what safeguards are actually in place? People want answers and proper regulation of this industry. Australia is already No. 8 in the world for the total number of operational and proposed data centres. We were behind only the USA for new proposals in 2024, with new projects proposed every week. One site, just 30 kilometres from the Melbourne CBD, would occupy 350 hectares. That's larger than many suburbs. Another 52-hectare site in Western Sydney would be Australia's single largest energy consumer.

And it's the energy consumption of these sites that is so alarming. Data centres will account for more than 10 per cent of Australia's energy consumption within a decade, jeopardising our energy transition. They're already boosting fossil fuel demand, absorbing half of one year's total rooftop solar growth. Without proper safeguards, data centres are going to drive up retail power prices, increase climate pollution and use up our scarce water. You might have seen the advocates of these data centres saying Australia was the perfect host due to its renewable energy potential. Note that key word: 'potential'. Isn't this an amazing change of heart! Big business now wants renewables when it suits them. They don't care about the climate or the fires and floods that we suffer each year. No, American executives only want renewables when it serves their business interests.

I don't support these data centres and certainly not while the regulation is so poor. Like many Australians, I'm completely at a loss regarding what benefits they would actually bring to Australians. At the very least, the government must force companies to contribute renewable energy to the grid, not compete with households for energy during a fuel crisis. There are several other major problems with AI data centres, including their use of otherwise productive agricultural and industrial land, their environmental degradation and water consumption, their noise pollution in close proximity to residential areas and the job cuts they actually cause.

So what's the government doing about them, you may ask? They're welcoming them with open arms, signing deals with Amazon, Anthropic and Microsoft in recent weeks. We are repeating the very same mistakes we made during the resources boom. Big companies set up shop here, we failed to tax them properly and we watched their profits sail away overseas, leaving behind a wrecked environment and no economic benefit. Is that the future we really want? Is that the best the government can do—our precious resources extracted and big tech companies making huge profits? All the government has to offer is a set of non-binding expectations for AI companies. Rather than imposing legal regulations on their activities, Labor's acting nicely and hoping for the best. Is it cynical of me not to trust these companies to do the right thing in Australia? We've seen this story before with the tobacco, gambling and fossil fuel industries. Big corporations use donors and lobbyists to influence government policy. The government is either being recklessly slow to regulate AI companies or it is doing their bidding, and I do not know which is worse.

The good news is that there is hope. Communities are sounding the alarm, rallying together and standing up against these dangerous megaprojects. In May, one development in Perth faced overwhelming opposition due to impacts on schools, residences and cultural heritage sites. The Greens have established a Senate inquiry into these data centres, and we will call on the government to pass a comprehensive AI bill. The government should consider a moratorium on new data centres until proper regulations have been enshrined into law.

Jo Briskey (Maribyrnong, Australian Labor Party) | Link to this | Hansard source

I thank the member for Warringah for raising this matter. It's an issue I myself am particularly passionate about. AI is here and it is rapidly changing how we work, what we see, how we engage online and what future tech advances and economic opportunities can look like. Our Labor government seeks to take every opportunity to ensure that we can shape this revolution on our own terms rather than on someone else's. We will always back team Australia, and that's exactly why we've already got a plan on the table.

We know this is ours to get right, and getting it right means listening to the people it affects. Plenty of people are uneasy about AI, and I appreciate why. They are worried about their jobs. They are worried about having these enormous companies on the other side of the world calling all the shots. They worry about knowing what's real, what's genuine and what's artificial, what's mis- or disinformation. These are fair and genuine concerns, and some of what the critics say is true. But I don't talk AI down, because the opportunities are just as real. We can build this industry instead of rent it, and barely a country on Earth is better placed to do it than Australia. We have the land, we have the natural resources, we have the researchers and 1,500 AI startups already at it. So our job is to be straight about both and drive what is in the best interest of Australians.

What people feel first is what is happening in their suburbs. Data centres are significant industrial operations going up where people live, near schools and near homes in places like mine. We've seen overseas, in parts of the US, how badly this can go when it is rushed. Sites are thrown up fast, soaking up enormous amounts of resources, and working people are left to foot the bill. Well, I'm not having that here, and neither is our government.

The people in my community have every right to expect that the project down the road will not push up their power bills or take their water. That's why, back in March, our government set out five clear expectations for anyone who wants to build them here. We are doing the work with the state and local governments to set in these frameworks. On energy, we're acting to make them an asset to our energy grid, not something that puts a strain on it. If a data centre wants to benefit from Australia's energy grid, then it must pay its full share of the network infrastructure costs, to ensure those are not passed on to consumers or businesses, and provide demand flexibility and cooperate with market operators to strengthen the energy grid. On top of that, they must look after their water.

We're not doing this without listening to our communities. Our plan is backed by the ACTU, the Smart Energy Council and the Water Services Association of Australia, who are key leaders in their fields. As I said, AI is here, and we should do everything we can, in terms of the data centres that are required, to ensure that they are built in our interests. That's why energy ministers met in May. They're back at it next month, and the water ministers are sitting down in August to lock it down with the rest of the states. For me, the real test is pretty simple. As AI grows, who's better off? That's why we are already expecting companies to open up computing power to Australian startups and to work with our researchers, because we absolutely want to back in Australian innovation as part of this tech revolution. We want them training Australians and giving our kids a way into skilled, well-paid jobs.

We're not only chasing the upside; we're acting on those worries I raised at the start too. That's why we launched the AI Safety Institute—to test the systems and to make sure the rules around this technology are written here and are in our national interest.

In the end, it comes down to a choice. We can be a country that buys its intelligence off the shelf from somewhere else and rents it forever, or we can be a country that builds the thing, owns it and trains our people to run it—shaped around our values, not somebody else's. I know which one I want for the kids growing up in my community. I don't want them to be tenants in someone else's future. I want them owning a piece of their own. That's why this government is getting in early and doing it properly on Australia's terms and in our national interest.

Andrew Wilkie (Clark, Independent) | Link to this | Hansard source

I thank the member for Warringah for bringing this matter of public importance before the House. It's a timely debate about a matter on which this federal government appears to be slow off the mark. Yes, the government has laid out five expectations for data centres, but the government really should be going much further and establishing clear rules and limits which prioritise Australia's environment and national interests and provide a reasonable return for the Australian community.

I'm not against data centres in principle—not at all—because housing data centres in Australia has the potential to be a really good thing. They are the engine of much of the digital world, underpinning the operation of things like cloud computing and, of course, artificial intelligence. The fact is that Australia already has about 162 operational data centres, with at least another 90 in the pipeline. In fact, Australia is consistently recognised as one of the most attractive locations for investment in data centres, and many companies want to build here because we're close to the growing demand in South-East Asia. We've got a lot of land, significant renewable energy potential and relative geologic, economic and political stability. Moreover, if we plan it right, being a significant centre for this infrastructure could actually provide us leverage and even some steps towards digital sovereignty in what is an increasingly competitive and sometimes dangerous global AI race. It also brings investment, economic activity and jobs, though the number of long-term jobs is obviously considerably less than during the brief construction phase.

But the truth is that, at the same time, there are also a lot of reasonable community concerns about the proliferation of these centres, not least to do with the environmental impact they have, consuming vast quantities of power, water and land as they do. Indeed, by some estimates, by about 2030 data centres in Australia will use about as much energy as all the homes in Victoria. Without additional energy in the grid and renewable energy in particular, emissions and power prices will rise. Data centres also use a significant amount of water. While they may not use as much as some industries, on the driest inhabited continent on Earth any proposal placing additional pressure on water resources does need to be scrutinised and managed carefully.

There are also concerns about lack of proper community engagement and a lack of consideration about the long-term economic return to the community. The centres are increasingly big and sometimes pretty ugly. They can be noisy and could impact power prices, land prices, local water resources and the general amenity of communities. There's a reasonable expectation on the part of communities that proponents should be made to demonstrate that all these concerns will be addressed before approvals are granted.

These facilities are not being built in a vacuum. They rely on Australian land, Australian infrastructure, Australian energy networks and Australian water resources. Increasingly, they are being developed by some of the largest and most profitable multinational corporations in history, so it is entirely reasonable for Australians to ask: what are we getting in return? Our return should include requirements to invest in additional renewable energy generation, contribute to local infrastructure upgrades, support skills and training programs, and provide other direct benefits to the communities hosting these developments. For, if we roll out the red carpet without demanding proper safeguards and dividends, we risk giving away too much for too little, and that's a habit in this country. We do it with too many industries, and, once they're in, it's hard to roll anything back. That's why the government's current political approach feels inadequate.

We need a framework that recognises the opportunities and the risks—one that welcomes investment but on our terms, one that encourages sovereignty and economic growth while ensuring that environmental impacts are properly managed and that communities have a genuine say in developments that affect them, one that secures a fair return for Australian people from the use of our resources and infrastructure. Data centres will undoubtedly play a major role in the economy of the future. I think it's right we build them, but that means we should be paying closer attention and setting stricter limits on how they are built, where they are built and under what conditions they are built. Frankly, the Australian people expect their government to plan ahead, to set clear rules and to stand up for the national interest. When it comes to the proliferation of data centres, that means ensuring that growth is sustainable, communities are respected and the public receives a fair return on the investment.

Jerome Laxale (Bennelong, Australian Labor Party) | Link to this | Hansard source

I welcome this opportunity to debate the future of artificial intelligence data centres in Australia and in particular what role the federal government should play as the world scales up investment in this critical digital infrastructure.

In speaking on this, I'd particularly like to acknowledge Minister Ayres and the assistant minister, the member for Parramatta, for their mountain of work in this space juggling the real opportunities of this digital revolution but also the real and genuine concerns of local communities just like mine. As a former mayor and someone who has always been adjacent to planning processes, I can tell you that the construction of data centres in local communities is overwhelmingly a state issue. Applications are made through various planning systems on industrial land often zoned by state and local governments and assessed and determined at either the state or local level. Where those local and state governments have not used the planning system to prohibit or regulate their construction, they are essentially permissible.

For that reason, it would have been very easy for this federal government to wash their hands of responsibility here, to simply say: 'You know what? This is a state issue, a planning issue, and not our problem.' But this government has not chosen that path. In fact, much of the urgent action that the member for Warringah is calling for in her MPI is already underway by this federal Labor government. In December last year, the government announced our national AI plan. The plan has three goals: to capture the opportunities, to share the benefits and to keep Australians safe. One of the earliest priorities of that plan was developing clear data centre expectations, which were released only a few months ago.

Over the last two years, data centres have become one of the most contested pieces of economic infrastructure globally. Advocates call them the factories of a new age and a great tool for productivity. Critics call them giant sheds full of computers that consume electricity and water and create few jobs. They say that we risk the same mistakes that we made in resources. Both these views contain truths, and our job as a government is to assess both of these views openly with honesty and make decisions in the national interest. The AI economy is arriving whether we are ready or not. That much is settled. What is not settled is the federal government's place in it. The position of this government is that it is far better to set the terms of a boom at the outset than to fix the consequences a decade later, which is why we have released five key expectations. I'll focus on a few.

Labor expects that data centres must bring their own new renewable energy supply to offset their demand, so they are not drawing down power that should go to households and businesses. That's important. Labor expects that data centres must pay their full share of network infrastructure costs, so those burdens are not passed on to consumers. And Labor expects that data centres should use innovative, efficient and sustainable solutions to minimise fresh water use. These expectations have been backed by the Water Services Association of Australia, the Smart Energy Council and the Australian Council of Trade Unions. Engagements from the states, who control many of these levers, has been positive to date and is ongoing.

Labor also expects global operators to make their computing power available to Australian startups and to partner with Australian researchers so that the benefits are to Australian businesses. This matters, because it goes to the question underneath the entire debate. We can be a country that merely consumes intelligence built elsewhere, or we can be a country that helps build it, that owns the infrastructure and that trains the people that grow our local economy.

In Lane Cove West, residents are writing to me about the proposed data centre at Mars Road. They have genuine concerns about the impact of this data centre on their community. Their local concerns are the frontline indicators of whether our state planning systems can manage this boom, and they are exactly the types of examples as to why the federal government should and has stepped in. We cannot allow a 'build first, ask questions later' approach. Energy security, water sustainability and community impact need to align with our national interests and our community values. The Albanese Labor government will keep working across this parliament, the states and territories to get this right.

Nicolette Boele (Bradfield, Independent) | Link to this | Hansard source

We've seen this all before: a big multinational company comes to town, brings 'thousands' of jobs to 'boost' the economy, then takes the resources, sends the profit offshore and pays next to no tax, all while the temporary construction jobs dry up. We've seen it with gas, and we're seeing it again with data centres. Big tech companies like Amazon and Microsoft are desperate to build data centres here in Australia. We have it all: tonnes of renewable energy potential, wide open spaces and a relatively stable democracy. Microsoft wants to invest $25 billion and Amazon $20 billion. It's the mining boom all over again.

But where does this money go? Who benefits? Tech companies claim that these investments are good for the punter, but that's by no means guaranteed. For every $100 invested here by a company like Amazon or Google, $70 to $80 flows overseas straightaway to purchase equipment that we don't manufacture here, like semiconductors and servers. The profits fly offshore too, particularly into the pockets of Jeff Bezos and Mark Zuckerberg. These tech companies are experts at tax minimisation, being rivalled only, perhaps, by gas companies. Data centres are being built on the North Shore. We already have several data centres in Artarmon and St Leonards, and there are more cropping up in and around my electorate and, as we heard from the member for Bennelong, in places like Lane Cove West and Macquarie Park.

I surveyed my electorate about these issues, and 750 people responded. Their views were unambiguous. Over half felt negatively about the growth of data centres, over 80 per cent were not confident the government will effectively regulate data centres and three-fifths were worried about a repeat of the gas industry experience and being ripped off. People were most concerned by the impacts on water supply and the energy transition, and rightfully so, because the numbers are astounding. We're a dry country, but data centres can use up to 40 million litres a day. The UN predicts that data centres will use more water by 2030 than every person on earth uses for drinking. Australia's largest proposed data centre in Western Sydney would use as much energy as two million Australian homes and generate the emissions of 560,000 petrol cars every year. This is a massive addition to energy demand at a time when we're asking Australians to help fund the build-out of our updated energy system—one that's reliable, cheap, clean and sovereign. The only way data centres can support the energy transition is if they build more renewables than they use. Otherwise, they're just sucking up new power faster than we can build it.

I want to be clear that AI offers significant economic opportunities, but we have to ensure that the build-out of AI data centres avoids these problems. So what is the government doing about it? They've issued some voluntary expectations for companies to demonstrate national interest, support the energy transition, use water responsibly, create local jobs and meaningfully engage with communities. The assistant minister Andrew Charlton, who's leading the government's data centre policy, said earlier this month:

… my view, is not that Australia should blindly accept or reject investment—Rather, Australia should actively set the terms on which that investment occurs…

I couldn't agree more, but non-binding expectations just aren't going to cut it. The government needs to make those standards binding, and that's a first step. More broadly, we need to critically engage with the data centre boom and the rise of AI.

The narrative we're being fed is that it's all about urgency. We're told that we don't have time to lose, otherwise the data centres will go elsewhere. It's the same playbook as the gas lobby. Yes, some data centres will get built elsewhere if we slow down, but there's a reason that Amazon and Google are so keen to build here, and that is they'll struggle to find anywhere half as good. If data centres really represent such an enormous economic opportunity, the opportunity is not going to go away, and we can afford to take time to get this policy right.

So we're faced with some important questions. Are we going to use our finite potable water to keep people and our environment healthy or to power AI slop? Are we going to let big tech bleed our communities dry or secure a fair return for the punter? Are we going to let data centres make climate change worse or ensure they boost clean energy supply? I think the answers are pretty clear, and my community agrees. It's up to government to slow tech companies down and ensure they deliver for us.

Julie-Ann Campbell (Moreton, Australian Labor Party) | Link to this | Hansard source

When you want something to work—when you want to shape it and when you want to have a stake in it—you can't bury your head in the sand. You can't close your eyes and pretend it isn't already happening. AI isn't coming soon. AI isn't a vision that's for the future. AI is here, and, because it's here, we now have a very important question that we need to answer. What is our role, not just as a government or as a country but as every single Australian, in that AI journey? I thank the member for Warringah for that question, because it's incredibly important. It's something that people are talking about in communities across our nation, and it's something that this Labor government is acting on right now.

In December last year, this Albanese Labor government announced the National AI Plan. That plan has three really clear goals. The first is to capture the opportunities, and the opportunities are many. We know that there are huge opportunities in terms of making the economy grow. We know that there are enormous opportunities in terms of productivity. We know that there are big opportunities in the aftermarket of data centres and AI. The second is that we have to share in the benefits. The benefits are many, but those benefits need to flow into everyday Australians every day. The third is to keep Australians safe, because we know that disinformation and misinformation are things that people are concerned about in our local communities, and we must protect Australians from them.

When there is a big digital transition like this and infrastructure is rolling out, we have to be in the ring. But we have to be in the ring with some conditions. The first is that, when it comes to data centres, we need them to reflect our Australian values. We need to ensure that our values as a nation are implemented when we talk about rollout, and we also need to ensure that those data centres are advancing Australia's interests and our people's interests.

I know that data centres have been something that have been very hotly contested, not just here but across the globe. For some people it's a new age. It's the new industrial revolution. It's something that's big and exciting. For others they're big, gargantuan sheds that suck energy. The truth is, when we decide our role in this space, we need to make sure that we account for all those arguments and set a framework to ensure that our country gets the best out of these. That's why in late March, the government's data centre expectations were rolled out. It's why what we set were some very clear expectations that you've got to bring your own supply, that you've got to cover your grid connection costs and that you have to co-operate with market operators to strengthen the energy grid.

This is not about moving forward at any cost. It's about making sure that, when these critical decisions are made and that economic impact rolls in, we are not passengers. We cannot be price takers. We cannot be people who sit on this side of the world and aren't in the game for the benefit of everyday Australians. Instead, what we must do is ensure that data centre providers pull their weight. Instead, what we must do is make sure that, as the scale-up happens, workers are supported and are not casualties of this work. We must make sure that there are frameworks for community engagement, because the concerns that people raise around water and energy are legitimate. The way to address those concerns is to set clear expectations for what we need as a country when it comes to data centres.

We want to be masters of our own destiny in this place. We don't want to bury our head in the sand on this, and we have a choice. That choice is for an Albanese Labor government to ensure that we are.

Kate Chaney (Curtin, Independent) | Link to this | Hansard source

I thank the member for Warringah for bringing this matter forward. Data centres being built across this country right now are reshaping our energy grid, our water resources and potentially our communities. At the moment Australians have almost no say in whether they deliver us any benefit at all. Australia is one of the most attractive destinations in the world for this investment. We have a stable democracy, available land and the potential for abundant, cheap renewable energy. When the big AI and cloud companies talk about investing in Australia, this is largely what they mean. Amazon has committed $20 billion to data centres here, and Microsoft has committed $25 billion. That investment is coming whether we set the terms or not, so we'd better set them.

In March, the government released its data centre expectations. They ask operators to support our energy transition, use water responsibly, create local jobs and engage with affected communities. They're sensible asks, but that is in fact all they are—asks. Developers are not required to comply. A company can secure fast-tracked approval, consume gigawatts of our electricity, draw down our water, employ a few dozen workers and face no consequences for failure to meet a single one of those expectations. This is a wish list rather than a national interest framework, and the costs are real. Reporting suggests that between 70 and 80 per cent of the money committed to Australian data centres flows straight back overseas, while Australians provide the land, the energy and the water, and carry the risk.

The issue raised by the member for Warringah is the right one. We welcome the investment, but these companies must build on terms that leave Australians better, not worse, off. That means converting the government's expectations into a binding framework through cooperation with the states, a credible plan to run on 100 per cent additional renewable energy, binding water efficiency standards, real commitment on local jobs and training, and genuine community consultation before approval, not after the concrete's poured. The member for Warringah's MPI also refers to the need to ensure that the benefits of AI are shared across society, and this includes ensuring that, when these models are trained on the work of Australian writers, musicians, journalists and artists, those creators are actually paid for their work not stripped for free while the value flows offshore.

The matter of data centres, important as it is, is one piece of a much larger picture. I've just released an AI discussion paper setting out 18 practical policies the government should act on now. This MPI concerns one of them—data centres—and this cannot be the only priority that we pursue. We need an honest conversation about tax. AI companies will generate enormous value from Australian users' data, energy and land, and right now we have no mechanism to ensure any of it stays here. We already know this playbook. In 2025 alone, Google and Meta moved almost $11 billion to offshore entities and paid just $140 million in tax. We cannot let AI replicate that.

We need to prepare for the harder questions. My paper calls for scenario analysis of AI's impact on jobs and the economy so government is ready, whatever happens. It calls for a digital duty of care to protect Australians and especially children from real harms happening now. It calls for national AI literacy programs so every Australian can use this technology and protect themselves from its risks. It calls for properly funding the institutions, like the AI Safety Institute, which are meant to keep pace with all of this. These are not competing priorities. They're the same project: making sure AI delivers for Australians rather than at their expense.

Uncertainty about AI is no excuse to wait to act. We don't know exactly how fast or far this technology will go, but we know that data centres are being approved today, models are being trained today and value is being banked offshore today. We made this mistake with gas. We let companies invest under a generous regime and then were told it was unfair to change the rules. The result? A prolonged fight, delayed reform and billions forgone. We cannot repeat this with AI. So I support this matter wholeheartedly and I urge the government to treat it not as a standalone fix but as part of the urgent need to consider the impact of AI on the Australian economy and society and to regulate appropriately now. I commend the matter to the House.

Sharon Claydon (Newcastle, Australian Labor Party) | Link to this | Hansard source

This discussion has concluded.