Pocock proposes 5 per cent levy on data centre revenue, citing low tax paid

ACT independent senator David Pocock has called for a 5 per cent levy on the Australian revenue of AI data centres. He says it would raise more than $500 million for the budget by the end of 2030 if it began in January next year. Pocock made the pitch in a National Press Club speech on 21 October 2026.

Pocock described the rate as "modest" and argued it would stop Australia repeating the mining boom, when global companies paid relatively little for the country's resources. He said the Parliamentary Budget Office had costed the model. The Canberra Times, as relayed by The Australian Developer, reported that the levy would cover data centres drawing more than 5 megawatts from the national grid, sit on top of existing taxes and council rates, and exempt co-location centres that lease racks or compute capacity to customers other than hyperscalers.

According to The Australian Developer, the PBO put the cost at just under $500 million over four years, with a possible net benefit of just under $3 billion by 2036-37. The outlet said the PBO flagged high uncertainty around the longer-term figure because of thin data on local data centre revenue, customers and market development, and noted the levy would have to start within the coming year for the numbers to hold.

Pocock cited the Australian Tax Office's latest transparency report, saying Microsoft's Australian data centre business earned $2.3 billion locally and paid no company tax. He said most foreign-owned data centres will "likely never" pay company tax, and that Microsoft, Amazon and Google face effective rates of 1 per cent to 4 per cent. He weighed the levy against a forecast $200 billion of investment.

Pocock accused the federal Labor government of being starstruck by US AI companies and fixated on what big tech wants. "We have to get better as a country at capturing long-term benefit and setting the terms of engagement," he said. He said communities want to know what data centres will do for them. He also warned that the rights of Australian copyright holders risked being given up on the "altar of AI frontier training".

Data Centres Australia chief executive Belinda Dennett opposed the idea, arguing that capital is mobile, global customers have choice, and a sector-specific levy added to existing infrastructure costs could erode Australia's appeal for investment. The ACT Government and the federal government had not responded when The Australian Developer reported.

The idea comes from a single crossbench senator and no bill has been introduced. The next test is whether it moves as a private senator's bill or within a wider budget debate.