Australia Is Building Its AI Rulebook, and a New Office to Run It

A new office, sitting close to power

On 15 July, the Albanese Government established the Office of AI within the Department of the Prime Minister and Cabinet. Placement matters here. PM&C is the department that sits closest to the Prime Minister and coordinates policy across the whole of government, so putting an AI office there signals this is being treated as a whole of government priority, not a niche portfolio issue for a single agency.

The office's stated job is to design and legislate a new Australian AI standard and to unlock AI training and investment in the country. It works alongside the Minister for Industry and Innovation, the Assistant Minister for Science, Technology and the Digital Economy, and the Department of Industry, Science and Resources, rather than operating in isolation.

What the framework actually covers

The plan includes mandatory requirements for large AI data centres, covering energy consumption and water usage, alongside copyright protections for Australian creators whose work may be used to train AI systems.

The stated goal, in the government's own words, is to ensure "investment in AI benefits the Australian people, is aligned with our values, and advances our national interests."

That is a broader remit than a typical technology regulator. It reaches into infrastructure planning, creative industries and investment policy at the same time, under one coordinating office rather than several disconnected agencies each handling their own slice.

Why one office instead of several separate rules

Australia's approach up to this point has largely been reactive, individual agencies responding to individual AI issues as they surfaced. A copyright question went to one part of government. A data centre approval went to another. Workplace impact sat somewhere else again.

The Office of AI is a bet that this piecemeal approach does not scale as AI touches more of the economy at once. Consolidating coordination in one place, physically inside the Prime Minister's own department, is meant to produce a framework businesses can actually plan around, rather than a shifting set of individual decisions from different directions.

How this connects to South Australia's Royal Commission

It is worth reading this alongside South Australia's Royal Commission into AI, announced less than a month later on 10 August. Two different levels of government are now moving on AI policy at the same time, a state running the country's most serious form of public inquiry, and the Commonwealth standing up permanent machinery inside its own executive.

That is not necessarily contradictory. A federal office can set standards while a state inquiry examines specific local impacts like job disruption or data centre resourcing. But it does mean Australian businesses now have two live processes to track rather than one, and there is a real chance of overlap or friction between state and federal approaches before this settles.

What this means for a business right now

The framework is still forming. There is no legislation to comply with yet, and the office's design and legislate mandate suggests real rules are still some way off. But the direction is now unmistakable, and three things are worth doing ahead of it.

Expect data centre and infrastructure rules first. Energy and water requirements for large AI data centres are explicitly named in the framework's early scope, so if your business depends on AI infrastructure or cloud capacity, that is the area most likely to see concrete rules soonest.

Take copyright seriously now, not later. If your business uses AI to generate content, images or marketing material, the framework's creator protection language is a signal that provenance and rights around AI generated material are becoming a live policy question, not a hypothetical one.

Do not wait for a finished rulebook to start acting responsibly. Governments consistently look more favourably on businesses that were already operating carefully before regulation arrived, rather than businesses scrambling to comply after the fact.

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Sources

• Office of AI, Department of the Prime Minister and Cabinet
• Australia's National AI Framework: What the Albanese Government's Office of AI Means for Australian Businesses, Otto IT
• Anthony Albanese established new PM&C AI office to make Australia world-first, The Canberra Times, Jul 2026
• Australia wants to 'manage' AI. What will that look like?, The Conversation