Marles says suburbs are the wrong place for data centres as politics heats up

Deputy Prime Minister Richard Marles told ABC News Breakfast on Friday 6 November 2026 that suburbs are not the right place to build data centres. Asked whether the government wanted a ban on suburban data centres, Assistant Minister Andrew Leigh did not endorse one and pointed instead to government principles on electricity and water use. Leigh said the "basic principle of the Albanese government is ensuring that Australians get the benefits of data centres located in their communities".

Legislation for mandatory standards for large AI data centres is expected to go to parliament early next year. Under the proposed standards, facilities would have to pursue renewable power to fully offset their energy demand, backed by firming technology such as gas, batteries and hydro. ABC analysis said the government's proposed rules were expected by the end of the year and are aimed at attracting AI investment on what industry figures call "our terms".

Nationals leader Matt Canavan attacked the plan at a dairy farm in Kyabram, in north-central Victoria. He said the current approach was a "train wreck waiting to happen for our energy system" and that regional dairy farmers would bear the cost through higher energy prices. Greens leader David Shoebridge linked opposition to data centres in the US midterms to Australia, saying successful candidates there wanted to "oppose the rollout of AI data centres".

The US results are driving much of the commentary. The ABC reported about 41 proposals were put to voters in ten states and all but one were on track to lose. An NBC News exit poll found three-quarters of voters opposed data centres in their community, according to the ABC. The ABC also noted Australia's 163 data centres have a combined capacity of about 1.6 gigawatts, according to Data Centres Australia, against about 50 gigawatts in the US by one estimate. Recent polling found 44 per cent of Australians would oppose a data centre built near them, the ABC said.

The economic argument is also live. Reserve Bank governor Michele Bullock said in the week of the decision that investment, including data-centre-related investment, had been stronger than expected and added to inflationary pressures. Deloitte Access Economics reported on Thursday an investment pipeline that included 37 data centres worth $141bn, a 36 per cent increase in a year. The Guardian noted Deloitte's warning that construction demand and inflation pressures arrive now while any productivity dividend may come much later.