AIIA calls for Budget reset on AI research and adoption


James Riley
Editorial Director

Without significant investment in artificial intelligence, Australia risks lower productivity, economic stagnation and the loss of AI research skills, the Australian Information Industry Association (AIIA) has warned in its pre-Budget submission.

Australia is fast becoming “a global laggard” in AI adoption, as a lack of strategic investment and research funding threatened the nation’s future economic competitiveness, productivity and social equity.

The submission presents a damning assessment of current Australian policy on artificial intelligence and says the 2025-26 Budget should be taken as an opportunity for a reset, and the chance to provide urgent corrective action on funding.

Recent federal government actions related to the long process of designing government regulation as risk mitigation had created a dampening effect on AI adoption.

The submission said the government’s $39.9 million allocation toward AI-related activities – amounting to about $8 million annually – was earmarked primarily for the restructure of the National AI Centre and internal studies to coordinate policy development.

“This investment compares unfavourably to other countries, with Canada and Singapore announcing AI budgets of $2.7 billion and $5 billion for AI development and adoption respectively over similar time frames,” the AIIA submission said.

“The minimal funding for directly driving AI adoption undermines Australia’s ability to harness data and digital technologies effectively,” it said.

“AIIA strongly urges the government to rectify this underinvestment to ensure Australia remains competitive on the global stage.

“A well-resourced and future-focused AI and digital strategy would be a major step towards reversing our declining productivity trends.”

The AIIA submission put forward a ten key recommendations for the 2025-26 Budget, including a call for policy that unlocks public data sets, as well as urgent investments in modernising government IT systems.

But policies for improving AI adoption across the economy and increased investment in AI-related research and skills were its central themes.

The group has called for “at least $150 million” in initial funding for a dedicated AI Centre of Excellence outside of the Australian Research Council funding process, and to invest in a cybersecurity uplift and supply chain resilience measures.

“Australia’s future prosperity (productivity) hinges on our ability to embrace technological advancements, invest strategically in AI research and adoption, and foster a digitally skilled workforce,” the submission said.

“The AIIA strongly recommends that the government significantly expand its commitments to AI, data utilisation, cyber security, public awareness, and digital infrastructure to secure Australia’s position as a global leader in innovation.

“By taking decisive action in the 2025–26 Budget, Australia can transform its productivity outlook, drive economic growth, and enhance social well-being.”

Meanwhile the Australian Academy of Technological Sciences and Engineering (ATSE) has used it pre-budget submission to propose a comprehensive strategy to achieve an investment target of 3 per cent of GDP on R&D by 2030, which would bring it in line with the government’s policy platform.

“This Budget presents opportunities to support foundational research, incentivise industry investment, scale successful innovation programs, leverage government procurement policies, and enhance R&D collaboration across sectors,” the ATSE submission said.

“These actions are key to reversing the decline in Australia’s R&D intensity – now just 1.68 per cent of GDP, of which 53 per cent is funded by industry – well below the expenditure of peer nations.

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