Canberra wants one national rulebook for data centres instead of a state-by-state scramble, a shift that could reset how commercial and industrial land is assessed, powered and watered across Australia.
Prime Minister Anthony Albanese has confirmed the federal government will establish an Office of AI inside the Department of the Prime Minister and Cabinet, tasked with coordinating a single national framework for artificial intelligence – including new rules for where data centres can be built and how much power and water they’re allowed to use.
Mr Albanese said the government’s response to AI had so far been “issue-by-issue” and “sector by sector,” and that the new office would end that fragmentation, according to Reuters.
“This is our time to decide what AI looks like here in Australia,” he said.
“It is not a question of if or when AI will transform our economy, we are past that.”
Legislation is expected to go before Parliament early next year and for property professionals, the detail that matters most sits in planning.
According to ABC News, states have taken markedly different approaches to data centre approvals: NSW classifies large facilities as state significant development, Victoria routes major proposals through the planning minister, South Australia released a dedicated data centre strategy in June tying government support to coordinated energy and water use, and Western Australia has no special category at all, relying instead on high-value project pathways. Queensland, the ACT, Tasmania and the Northern Territory generally process approvals through normal local channels.
That patchwork has shaped where investment lands, and Mr Albanese’s pitch is that a single national standard will make Australia more attractive to global AI investors by giving them clarity and speed on approvals.
“Getting this right will enhance our appeal to international investors by delivering greater clarity and speed for approvals and a streamlined process for verifying compliance,” he said.
Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton framed it as a response to problems already seen overseas.
“We want to learn the lessons from abroad where many of these data centres have been rolled out in ways that have damaged local communities,” he said.
That community impact is central to why this isn’t purely a commercial property story. Data centres draw enormous volumes of power and water, and their proximity to residential precincts has already fuelled local opposition in several states.
Amanda McKenzie, chief executive of the Climate Council, warned the stakes extend well beyond planning approvals.
“The AI-driven surge in data centres will have a profound effect on our energy system, and unchecked, this growth could mean soaring prices and rampant climate pollution,” she said.
With state governments having spent recent years competing for data centre investment, the new framework signals Canberra now wants a say in which projects get built, where, and under what conditions, a shift that will directly shape industrial and commercial land use decisions in the years ahead.