Topics: Artificial intelligence, copyright, data centres
E&OE
Laura Jayes, Host: Business Council of Australia Chief Executive Bran Black joins me now in the studio. So we heard a little bit from you there. Your overall take on the speech yesterday and the direction in which this government is going?
Bran Black, Chief Executive: Thanks, Laura. Look, we see with the speech, it’s a good thing that the Prime Minister is making it a priority for him personally to help develop AI policy for the country. That’s a very useful thing. We think that AI presents an extraordinary opportunity for the country. He is leaning into that, also a good thing.
We know that people have concerns in terms of trust, as AI is rolled out across the board, but particularly in terms of their specific workplaces, and that’s an area that does need to be worked on. We’re doing a lot of work with our members in that regard as well. So, again, that’s useful, but we have to be cautious. We do have to be cautious because we are in a race, and what we’re worried about is that there is a tendency in Australia to over-regulate, and we’re worried that we will see that tendency play out in terms of AI too.
Laura: Isn’t caution the problem here, though, Bran? You know, caution will slow things down. There is a risk here that we are too cautious. The Prime Minister has acknowledged that we need sovereign capability. This all goes to AI and data centres, that we need it for security, we need it for growth in the economy. So, how cautious do you want the government to be? Where does caution give way for the need to be faster here?
Bran: Well, I’m saying that we need to be cautious that we don’t overregulate, because what we want to see is Australia nimbly be able to pursue these opportunities that AI presents.
If we overregulate, we will miss out on investment. I was in the US recently talking with investors, and they were saying that there is about a trillion dollars in capital that needs to find a home, particularly for data centres, in the next 12 to 18 months. And I stress that point: the next 12 to 18 months.
Laura: So the timeline is important here as well. I think the Prime Minister is talking about six months to get a kind of framework, but I’ve seen how legislation works. 18 months, we’re pretty tight on time, aren’t we?
Bran: We are. We are tight on time, particularly if you want –
Laura: Do you think the Prime Minister understands that?
Bran: I think he does. What we would say is that it’s important to move with haste, but not so much haste that we get settings wrong. So, for instance, copyright, that is a challenging issue. You wouldn’t want to see us resolve it in such a way that makes us unviable for the purposes of investment, but we do need to resolve it reasonably expeditiously.
Laura: Yeah, because Anthropic, OpenAI have made it pretty clear, haven’t they, that some kind of copyright deal is contingent upon their investment here? What timelines do you think we’re on there?
Bran: I couldn’t speak to the exact timeframes, but as I say, if we can move with haste, but at the same time recognise the fundamental importance of getting the settings right, then that should be the priority, both for government and for business organisations and unions that are involved in these conversations.
Laura: Let’s talk about jobs and unions as well, because I think the signals out of the Prime Minister’s speech was that they’re not going to sop to the unions. The unions aren’t going to get this veto power, but he is cautious and knowing in the community that people are worried about AI taking their jobs.
I don’t think we’ve seen the broad, worst warnings and kind of doomsayer predictions play out. But they are going to take jobs. What is the business plan here, because that kind of stuff can’t be left up to government, but it means that business needs to step in, doesn’t it?
Bran: I think it’s a really good point, and yes, I agree with you. Business does have a really important role to play here. There have been lots of predictions, as you alluded to. I can remember when I started in this role, we were hearing predictions that within 12 months we’d have some type of jobs apocalypse. That certainly didn’t happen, and those revisions got continually updated. We still haven’t seen that.
In fact, the most recent data, which is just this week old, from the government Department of Workplace Relations, is showing that right across the board, in every sector, we are still seeing jobs growth, including in those sectors that are most exposed to AI. So, jobs growth, which is a good thing, but we know people are concerned, and we have to address those trust issues on the rollout so that it can be as effective as possible. Most importantly, that means making sure people have the skill sets that they need, and that’s where our focus is.
Laura: Sure, but isn’t part of the problem as well is that it’s not so much that AI can’t do these jobs, it can. It’s how businesses integrate, which is proving one of the biggest problems and the cost of it. I mean, tokens are very expensive, but eventually that’s going to sort itself out right.
So we’re in this sweet spot now where business can reskill or think about how they’re going to reshape jobs?
Bran: Again, a really good point. One of the bits of feedback that we get from businesses here, but also in the US, is that there’s been this extraordinary rush just to bring AI into businesses. Executives and boards have thought, ‘Well, my competitor’s doing it, I’ve just got to get it in my business too.’
What that’s meant is that in many instances, they haven’t really thought deeply about what is the problem that they’re trying to solve, and the consequence is that they haven’t realised any productivity gains yet. Now some businesses have done that really well, and they’ve thought
‘What is the problem that we need to solve? ‘ and they specifically try to adapt AI to solving those specific issues, and that’s where you get the productivity gains.
What that points to, to your point in terms of integration in the workplace, is a couple of key points that we would make. And we’ve recently released a best practice guide for how you can do this. Engage right at the outset with your workforce on what the problems are, because they’re the people that, at the end of the day are on the ground dealing with the challenges day to day. Make sure that you take on board their feedback. Consult with them with respect to how they might be affected by these roles.
But then also make sure that to the extent that there’s an impact on the employee, you have humans in the loop around those decision-making processes. That’s really important. That’s best practice. But what we don’t advocate for is a change to the law because the data just doesn’t support that type of change at this point.
Laura: Okay, let’s talk about energy and water use. Is it reasonable for the Prime Minister to expect that these AI companies that come in, they’re very energy intensive, these data centres with water and energy shouldn’t they replace in the grid what they take out? And wouldn’t that be a reasonable expectation for the community, given the cost of energy at the moment?
Bran: I think it is a reasonable community expectation. What we would say, rather than mandating those requirements, is that we should preference applications for new data centre developments that bring with them new capacity for power generation and which have minimal water use. But I stress that word preferencing rather than mandating that.
And the reason why I say that is that taking that mandatory approach puts us out of step with some of our competitor nations. Now, one of the points that I often hear is ‘Australia is so wonderful that we’re going to get all of this investment anyway?’ There’s no doubt that we’re going to get some investment, but are we going to get all the investment that we could, noting that there are other countries that have lots of the attributes that we do, in some instances, like Canada and the US, all of the attributes that we do, are we going to get the investment that we could? And we already see companies like AirTrunk, an Australian company, choosing to invest a whopping $42 billion, not in Australia, but in India.
Laura: Why?
Bran: Well, because they get better access to settings, regulatory approvals. My understanding of the Indian system is that, particularly in the context of data centres, there’s almost a 20-year tax-free process that’s available.
Laura: Are you advocating for that here, though?
Bran: I think we should be looking at how we can better support companies to make investments in Australia.
Laura: Hang on, Anthropic is not a profitable company anyway, so they wouldn’t be paying company tax.
Bran: But at some point, companies hopefully are always going to become profitable.
Laura: Sure, but this is the whole argument with multinationals at the moment that the political class has been trying to grapple with, with profit shifting offshore, so would you not support some kind of digital service tax? We’re talking about trillion-dollar companies that aren’t yet profitable, but they will be.
Bran: They will be profitable, but what we’re saying is that we need to make sure that we can attract the investment to our shores, and if we have settings that are uncompetitive –
Laura: Do we really need to do that with the tax-free status, like India is, though?
Bran: I’m not saying that we need to have a tax-free status, but I’m saying that we need to have competitive settings. And in circumstances where a company’s got investment options in many different jurisdictions, including in Australia, they will go in many instances to those countries where they can secure the best outcomes.
Laura: Why wouldn’t we just preference Australian companies wanting to build data centres because there’s plenty of them?
Bran: There are plenty of companies that want to do that, but we’re also seeing that Australian companies, as per the example that I gave just before with AirTrunk, are in some instances choosing to invest overseas. We don’t want to lose that investment.
Laura: And you’re saying these energy requirements might cause more of them to look offshore?
Bran: Well, it’s another regulatory hurdle, it’s another challenge. And when you add up existing challenges that they have in terms of the existing costs of regulation, our tax settings, our planning delays, our industrial relations challenges, this could be in some instances the straw that breaks the camel’s back. We don’t want that to be the case.
Laura: Okay. Bran, thanks so much for your time.
Bran: It’s a pleasure.