Australia does not have a single AI Act. The National AI Plan, released on 2 December 2025, relies on existing technology-neutral laws plus targeted reform, and the Government has dropped its earlier plan for mandatory guardrails for high-risk AI. For a business, that means the rules you already follow (privacy, consumer law, workplace law) still apply to AI, and government guidance is worth using.
The National AI Plan
The Federal Government released the National AI Plan on 2 December 2025, announced by Industry Minister Tim Ayres. According to a CommBank newsroom report and law firm Bird & Bird, it is built around three aims: capture the opportunities, spread the benefits and keep Australians safe.
On regulation, Piper Alderman reports that the Government has officially abandoned its earlier plan for mandatory guardrails for high-risk AI. It favours updating existing, technology-neutral laws, backed by guidance and a new AI Safety Institute, instead of a standalone AI law. We could not read the Plan text directly, so check it for the detail.
Other points reported by law firms:
- Bird & Bird says more than A$460m of existing AI funding was consolidated, with a new AI Accelerator round under the Cooperative Research Centres (CRC) program.
- Piper Alderman says the Government will fund SME adoption of AI, including tailored support through an “AI Adopt Program” that will also be available to non-profits.
- Piper Alderman also reports that in July 2025 the Attorney-General said she was preparing a second tranche of privacy reform.
Guidance for AI Adoption
On 21 October 2025 the National AI Centre (NAIC) published its Guidance for AI Adoption. It comes in two versions: Foundations, for businesses starting out, and Implementation practices, for those scaling up. It is guidance, not law.
It sets out six practices, according to law firm Maddocks:
- Decide who is accountable.
- Understand impacts and plan accordingly.
- Measure and manage risks.
- Share essential information.
- Test and monitor.
- Maintain human control.
The guidance condenses the 2024 Voluntary AI Safety Standard, which had 10 guardrails, into six practices, according to Maddocks. For a small business, the six practices work as a simple checklist.
The Productivity Commission’s view
The Productivity Commission released its final report, “Harnessing data and digital technology”, on 19 December 2025. According to law firm King & Wood Mallesons, it recommends gap analyses first, with AI-specific laws a last resort. It also says an EU-style framework with mandatory guardrails should not proceed unless gaps are proven. The interim report came out on 5 August 2025.
The Australian AI Safety Institute
The government has funded an Australian AI Safety Institute with $29.9m over four years, including $3.5m this financial year, according to AAP reporting in the Illawarra Mercury. Reporting says it will sit within the Department of Industry, Science and Resources and will advise government rather than regulate. The same report notes that Minister Ayres defended the funding at Senate estimates on 2 June 2026. An AI Safety Forum was held at the University of Sydney on 7 and 8 July 2026.
For your business, the Institute is a source of advice, not a regulator that audits you.
Government’s own AI policy
The Digital Transformation Agency (DTA) updated its “Policy for the responsible use of AI in government”. It was announced on 2 December 2025 and took effect on 15 December 2025. It applies to government agencies, not private businesses. It requires a named accountable officer for each use case, an internal register and an AI impact assessment for every use case. If you sell to government, expect these habits to flow into procurement.
Copyright and AI training
On 26 October 2025 the government ruled out a text and data mining exception for AI training, according to Simpsons Solicitors. Piper Alderman and ACS Information Age also reported it. In practice, no new copyright carve-out exists for training AI on copyrighted work, so check the terms and sources of any content your tools produce or use.
Data centres and investment
On 23 March 2026 the government announced five national expectations for data centres: national interest, energy transition, sustainable water, Australian skills and jobs, and research, innovation and local capability. Major investments reported include:
- Amazon Web Services: AU$20bn from 2025 to 2029, announced 14 June 2025, mainly in Sydney and Melbourne.
- NextDC and OpenAI: an A$7bn, 550 MW facility at Eastern Creek, Sydney, announced on 5 December 2025, according to Forbes Australia.
- Microsoft: A$25bn through to the end of 2029, announced in April 2026, according to Business News Australia. The same report says Microsoft will train 3 million Australians in AI by 2028.
Bird & Bird also cites more than A$100bn in forecast data-centre commitments.
Money for business: the May 2026 Budget
The 2026-27 Budget, delivered on 12 May 2026, included a $70m AI Accelerator through the Cooperative Research Centres (CRC) program to support private-sector AI adoption. SmartCompany reports grants for projects in 2026 and 2027. Check the program guidelines when they open to see if your business is eligible.
What this means for you
- No standalone AI law is in place, but existing privacy, consumer and workplace laws apply to your use of AI.
- Privacy reform is under way. See our post on the 10 December 2026 automated decision disclosure date.
- The NAIC guidance is not law, and its six practices are a sensible baseline.
- Government funding is aimed at adoption, so watch for the AI Adopt Program and the AI Accelerator.
Key takeaways
- The National AI Plan (2 December 2025) relies on existing laws, and the earlier plan for mandatory guardrails has been dropped.
- NAIC’s Guidance for AI Adoption (21 October 2025) offers six practices.
- The AI Safety Institute is funded at $29.9m over four years and is reported as advisory.
- A text and data mining exception for AI training was ruled out on 26 October 2025.
- The May 2026 Budget includes a $70m AI Accelerator.
- Rules may change, so check official sources before you rely on any summary, including this one.
If you would like help turning the NAIC six practices into a simple process for your business, talk to us. This post is general information, not legal advice.
Sources
- National AI Plan release, CommBank Newsroom, 2 December 2025
- Australia now has a National AI Plan. Now what?, Piper Alderman, December 2025
- A new era for AI governance in Australia: what the National AI Plan means for industry, Bird & Bird, December 2025
- Guidance for AI Adoption, Department of Industry, Science and Resources and National AI Centre, 21 October 2025
- Navigating the latest government-issued guidance on AI, Maddocks, undated
- Productivity Commission releases final report into harnessing data and digital technologies, King & Wood Mallesons, 15 January 2026
- Harnessing data and digital technology, interim report, Productivity Commission, 5 August 2025
- Update: Australian Government rules out text and data mining exception for AI training, Simpsons Solicitors, 26 October 2025
- AI on a budget: Aussie watchdog trails global peers, Illawarra Mercury (AAP), 2026
- AI Safety Forum 2026, National AI Centre, 7 and 8 July 2026 event
- AI policy overhauled with new impact assessment tool and procurement guidance, Digital Transformation Agency, 2 December 2025
- Government announces Australian data centre expectations, GovTech Review, 23 March 2026
- Amazon data centre investment in Australia, Amazon, 14 June 2025
- NextDC, OpenAI to develop data centre in Sydney, Forbes Australia, December 2025
- Microsoft commits $25 billion to Australian data centre and AI build-out, Business News Australia, 2026
- Federal Budget backs AI with $70 million accelerator and major agency trials, SmartCompany, 13 May 2026
- AI Accelerator initiative and digital ID development win big in 2026-27 Federal Budget, Tech Partner News, 13 May 2026