The Australian government has recently announced bold moves to keep pace with the quickening development of disruptive artificial intelligence (AI) technologies. These officials are looking very seriously at the prospect of developing a stand-alone AI Act. This legislation will set up a framework of rules commensurate with the societal risks that these technologies are likely to generate. This step is particularly timely given the increasing concern about possible effects of AI on the economy and jobs.
In his budget speech, Treasurer Jim Chalmers highlighted how serious the government is about protecting Australians. At the same time, they are trying to reduce regulations to foster innovation in this nascent industry. He noted that AI could be “the most transformative technology in human history,” highlighting its potential to reshape Australia’s economic landscape dramatically.
The Proposed AI Act and Its Implications
The Commission’s draft AI Act will likely create a new set of regulations that would sort AI technologies into categories based on the risks they pose. This regulatory framework should be complemented by bans on some high-risk technologies, such as those that could produce major harms to society. The challenge for policymakers is to protect the public while allowing innovation to flourish within what will no doubt be a booming new AI economy.
Chalmers emphasized the importance of taking a holistic approach to potential AI regulation. He stated, “It is not beyond us to chart a responsible middle course on AI, which maximises the benefits and manages the risks.” This approach recognizes the enormous space for innovation. Importantly, it acknowledges the huge challenges AI adoption will bring, if adopted at scale.
That’s why former Industry Minister Ed Husic has gone all in on the new AI Act. He further noted that the federal government is leading the charge towards mandatory guardrails for AI technologies. He said they were in “the final stages” of this process as recently as the spring of this year. Federal regulators should seek to remove regulatory barriers that hinder innovation while supporting the responsible development and deployment of new technologies.
Economic Impact and Productivity Growth
The Productivity Commission has already warned that there’s a great deal of uncertainty about the likely effects of AI on the economy. Other estimates predict that AI will contribute to growing the economy by a mere 0.05% per year. Some other forecasts hope for a much larger boost of 1.3 percentage points or more. The commission estimates that AI will increase the growth of labor productivity by at least 4.3% over the next 10 years. This is a jarring difference from the 20-year average of roughly 0.9% per year.
The deployment of AI technologies comes with significant hurdles. The Productivity Commission has sounded the alarm bells. They warn that the move away from outdated technologies can result in “painful transitions” for workers across industries. This concern highlights the importance of a proactive and comprehensive strategy to address the workforce impacts of AI implementation.
Commissioner Stephen King warned of the potential pitfalls of adopting too stringent regulations. He remarked, “Adding economy-wide regulations that specifically target AI could see Australia fall behind the curve, limiting a potentially enormous growth opportunity.” This view further underlines the critical need to create smart new regulatory framework that fosters innovation but meets the risks it poses.
Engaging the Public and Industry Stakeholders
That’s the good news The government knows they need to engage the public and potential industry stakeholders from day one to fully realize the AI benefits, potential and otherwise. As discussions surrounding AI regulation progress, officials are keenly aware of the need to bring citizens along in this journey. Our next productivity round table will be an invaluable opportunity to lay the ground rules for AI’s development to ensure it helps create a more productive Australian economy.
Chalmers reminded everyone that the government was still committed to creating an environment where AI could flourish as “an enabler, not an enemy.” To that end, the government is working to develop a smart and adaptive regulatory framework. This more holistic approach encourages innovation and private sector experimentation while furthering the goal of societal welfare.
