Treasury has not calculated net benefit of attracting AI data centres, inquiry hears

Treasury has not established whether drawing large AI data centres to Australia will leave the country better off, a parliamentary inquiry has heard. Treasury official Jeremy Lawson told the Joint Select Committee on Artificial Intelligence on 30 October that the department had not carried out "a formal net benefit calculation" on such investment. Lawson said he doubted such a calculation was possible given the uncertainties, and that any figure would probably be too "rubbery" to guide decisions by itself.

Lawson argued that Australia would slip further behind other countries on productivity and living standards without upfront investment. He cited Productivity Commission research suggesting AI could raise labour productivity by about 4.3 per cent over a decade. Nationals Senator Ross Cadell replied that the same research found the largest gains came from using AI, not from training models, the most power-hungry part of the industry.

Cadell said governments had already spent $12.5 billion supporting energy-hungry businesses, including $2.5 billion for the Tomago aluminium smelter in his region. He added that one proposed Queensland data centre would draw 2.16 gigawatts at full capacity. Cadell said the word "‘May,’ for a politician, is the scariest word you can ever hear, because we don’t know what we’re getting".

Independent Curtin MP Kate Chaney likened the data centre push to the gas industry, where she said much of the value went offshore into private hands. She asked whether Australia would end up as a landlord for training models. Treasury's submission, a chapter of the 2026 Intergenerational Report, notes that much of the equipment is imported, so only about one-third of data centre investment is expected to directly support Australian activity.

Lawson agreed under questioning that the facilities need not sit beside a local industry for Australia to gain from AI. He said, "In a modern economy, co-location isn’t strictly necessary to enjoy the benefits of having that domestic capacity". He added that local training capacity could still help researchers and businesses develop AI, though he stressed nothing was certain. A previous Senate inquiry heard that foreign firms could train their most advanced models here without giving local researchers access to the development process, and that the models stay the firms' intellectual property wherever the computing happens.

On tax, Treasury's Trevor Power said data centre operators would pay company tax like any other business, with the Tax Office policing multinationals. Chaney raised concerns about "clever accounting" and transfer pricing. Power, who said he was not Treasury's tax expert, pointed to national AI standards under development, which he said would set the rules for ensuring the investments are net economic benefits. Prime Minister Anthony Albanese announced in July that the government intends to legislate the standards, including mandatory requirements for large data centres, and Treasury's submission says they will cover energy, water and location.

Independent Senator David Pocock has separately argued in a Guardian opinion piece, reported by Mindiam, that tech multinationals building AI data centres should be taxed to deliver a fair return, citing Microsoft's A$25 billion and Amazon Web Services' A$20 billion pledges.