One Nation is on the right of the political spectrum. Like many populist parties, it has raised issues such as housing and the cost of living, which many Australians are finding difficult. But this does not mean that Hanson has correctly assessed these problems, let alone provided the right answers to Australia’s social problems. However, with the Victorian and New South Wales elections approaching, mainstream parties such as the Liberal Party and Labor Party have not responded strongly to One Nation’s position on a monocultural society. The reason is simple. At a time when these parties are both losing voter support, the second preferences of One Nation supporters, as well as the possibility of minority governments emerging, have become decisive factors in determining whether these parties can govern. It can be expected that in the upcoming November Victorian election, neither party will actively respond to One Nation’s demands. As a result, One Nation’s momentum continues to grow day by day.

What is worth watching is whether Australians really support One Nation, which will become clear in the Victorian election. Victoria is the most multicultural state in Australia, and migrants have not developed long-term established support for either Labor or the Liberal Party. Whether they will actually cast their votes for One Nation is therefore a real indicator of the level of support for One Nation. In the Melbourne City North-East electorate for the Legislative Council, a migrant is running as an independent candidate with “intercultural democracy” as their political platform, clearly asking voters who are dissatisfied with the mainstream parties to make a choice between voting for One Nation.

One Nation sees immigration as the biggest problem facing Australian society today, believing that the problems Australia faces today are all caused by Australian society having absorbed too many multicultural migrants, and that if the number of migrants is immediately reduced and certain groups of migrants regarded as “bad” are restricted, Australia’s problems can be solved immediately. Faced with this situation, responsible and capable political parties should put forward accurate analyses and solutions to difficulties such as housing supply, house prices, the cost of living and public safety, rather than being led by One Nation and focusing only on questions such as the speech delivered by Home Affairs Minister Tony Burke last week: “Who can come? Who can stay? Who needs to leave?”

In Burke’s speech, the sharp increase in temporary residents was identified as the biggest issue behind population growth, and Burke proposed a series of policy responses. However, society generally believes that these reforms will have little impact on the fundamental problems and are merely going through the motions. As first-generation migrants, we can actually feel more strongly that after settling here for decades, Australian society has undergone fundamental changes. What is needed is for society as a whole, including multicultural settlers who have arrived over the past 40 years and generations who have lived here for many generations but mistakenly believe that Australia is still a Western society like Britain, to work together to find a new definition of Australians and Australian society today.

Australia’s Self-Redefinition

To make such a redefinition, as migrants, we need to understand some of Australia’s immigration history and how it has evolved into its current situation before we can develop a balanced and practical response.

Australia, as a country, has gone through roughly seven stages since colonial migration began in 1788.

(1) Colonial migration, (2) White Australia Policy, (3) Populate or Perish, (4) Assimilation, (5) Multiculturalism, (6) Immigration management, and (7) Intercultural democracy.

(1) Colonial Migration (1788–1901)

Before 1850, Australian society was mainly made up of British colonists, along with a small number of Europeans. After gold was discovered in 1850, the gold rush brought large numbers of Chinese migrants, while Queensland’s sugar industry made extensive use of Pacific Islander indentured labour. At the time, white workers and politicians often regarded Asian migrants and Pacific Islander labourers as threats to wages, employment and “white society”. The colonies therefore introduced different degrees of exclusionary policies.

When Australia became a federation in 1901, immigration directly became one of the important responsibilities of the new federal government.

The first major piece of legislation passed by the first Federal Parliament was the Immigration Restriction Act 1901, which opened the way for the White Australia Policy.

(2) 1901–1945: The White Australia Policy

This was the first major stage in Australian immigration history. Its core idea was very clear: Australia was to become a country of white people from the British Empire. The law did not simply state that “Asians could not enter Australia”. Instead, it achieved this objective through an administrative system.

The most famous example was the dictation test. Immigration officers could require applicants to write 50 words in a specified European language, with the particular language chosen by the officer. This meant that it could easily be used to make certain people “fail”. Between 1901 and 1909, 1,359 people were required to take the test, and only 52 were allowed to enter. After 1909, no one required to take the test passed it. At the time, there were also:

• Pacific Island Labourers Act 1901
• Restrictions on non-European immigration
• Various restrictions imposed on non-white residents already in Australia
• Preferential encouragement of British migration

Therefore, the White Australia Policy was not simply an “immigration policy”, but a population, racial and national identity policy.

By 1947, people born outside Australia, Ireland and Britain accounted for only a small proportion of the Australian population. The proportion of the Asian population also fell from approximately 1.25% in 1901 to around 0.21% by the late 1940s.

(3) 1945–1960s: Populate or Perish

This was the first major turning point after the establishment of the Australian Federation. The Second World War created a very strong sense of national security in Australia: if the population was too small, the country would not be secure. In particular, the military threat posed by Japan during the Pacific War led Australia to seriously consider the idea of “Populate or Perish”: Australia needed to increase its population or it might not be able to defend the country.

After the war, Labor Immigration Minister Arthur Calwell began strongly promoting immigration. But there was a contradiction: Australia still had the White Australia Policy. Therefore, the large numbers of migrants initially recruited were mainly from Britain, displaced Europeans, the Balkans, Southern Europe and Eastern Europe. One of the most representative examples of the policy at the time was the “Ten Pound Poms” scheme, which operated from 1945 until it ended in 1982. More than one million mainly British European migrants paid ten pounds and received subsidies from the Australian Government to settle in Australia. During this period, Australia’s population increased from only seven million to 15 million.

(4) 1950s–1973: From a “White Country” Towards Non-Racial Immigration

The White Australia Policy was not created in a single day, and it was dismantled gradually. In 1957, the government relaxed some restrictions on non-European immigration. Non-European migrants began to have the possibility of longer-term residence and citizenship, although they were still subject to stricter conditions than European migrants. In 1958, immigration legislation formally abolished the dictation test, marking a very important institutional reform. In 1966, the Liberal Government under Harold Holt decided that immigration selection would no longer be based on race and nationality, but would begin to be based on skills and contribution.

This marked the first very important transformation in Australian immigration policy: moving from asking “What race are you?” to asking “What can you contribute to Australia?” This policy eventually evolved into the skilled migration program that exists today.

(5) 1973–1990s: The Emergence and Institutionalisation of Multicultural Australia

The real ideological transformation took place under the Whitlam Government. In 1973, Immigration Minister Al Grassby formally introduced multiculturalism. Australia officially abandoned the final institutional remnants of the White Australia Policy and stated that Australia could be a country made up of people from different cultural backgrounds. Grassby had a particularly noteworthy concept of seeing citizens as a “family of the nation”. Grassby believed that members of a family could uphold common interests without every member becoming exactly the same. Family members did not need to have the same appearance, behaviour or thoughts. He also pointed out that individuals or ethnic communities did not need to abandon their cultural heritage, personal identity or characteristics in order to reach consensus.

Grassby’s proposal in 1973 represented an ideological turning point, but for it to truly become government policy, institutional changes were required. The 1978 Galbally Report was an important milestone. It pushed the government to expand settlement services, English-language support, migrant services and equal access to community services. In other words, migration did not end when migrants arrived in Australia. On the contrary, this was only the beginning. The government needed to help them settle, learn English, find employment and participate in society.

When the Galbally Report was published, non-white migrants accounted for only 5–6% of Australia’s population. Most of the migrants who required assistance to integrate were British and European migrants whose cultures were relatively close to Australian culture, which was completely different from the circumstances of multicultural Australia today. Unfortunately, over the decades, successive governments have not seriously adjusted the recommendations of the Galbally Report to suit globalised migrants who arrived in Australia after the 1990s and who had completely different cultural and social backgrounds, experiences and goals from those who settled in Australia before the 1970s.

The fact that multicultural Australia is being questioned today precisely demonstrates the indifference of successive governments towards migrant communities and social integration, as well as their lack of basic understanding.

(6) 1990s–2010s: From Multiculturalism Towards Australian Values

During this period, the Australian Government began placing greater emphasis on both cultural diversity and shared Australian values. In other words, people can retain their languages, cultures, religions, food and festivals, but everyone must still accept democracy, the rule of law, equality, freedom and civic responsibility. Therefore, multiculturalism should not mean that “each community lives separately”, but rather that “cultures can be diverse, while civic institutions must be shared”.

Clearly, today some people see the root of Australia’s increasingly difficult social conditions as multiculturalism being unsuitable for Australia, and are calling for a return to a monocultural Australia. This reflects the fact that over the past 50 years, while governments at all levels have significantly increased immigration, they have failed to address how to establish Australian values and social cohesion within society. When economic and livelihood difficulties arise, migrants are seen as the root of the problem and become scapegoats for the policy failures and governance failures of successive governments.

The reality is that Australia today is already one of the most multicultural societies in the world. A return to a single British or European culture is no longer possible. How to turn Australia’s ethnic diversity into its greatest asset as it moves towards globalisation has become the most important issue facing society today.

(7) Immigration Becomes an “Economic Management Issue” (2010s to Today)

At this stage, the focus of immigration policy changed again. The initial question asked by Australian society, “Who can enter Australia?”, became “What kind of people does Australia need?” As a result, skilled migration became extremely important. For example, doctors, nurses, engineers, teachers, IT professionals, construction workers and tradespeople became people Australia sought to attract. The government also used points-based systems, occupation demand lists, employer sponsorship, regional migration, temporary visas and permanent residency planning to manage immigration, with the focus also placed on numbers and economic benefits.

But the government has overlooked the fact that migrants today are no longer lower- and middle-class people without much leverage seeking a place to settle. Instead, they are successful people from different countries around the world who aspire to Australia’s high quality of life and bring higher education, capital, experience, global networks and successful experiences to this country, hoping to achieve greater development in their lives. These migrants come with the motivation to build a future together with Australians and to contribute their abilities more fully, yet the majority of society still has not recognised their potential to help build Australian society.

During this period, dealing with the issue from an economic management perspective highlighted the lack of consensus among different sections of society about how migration should be managed. Farmers who have long faced labour shortages in regional areas have had to rely heavily on working holiday visa holders or certain refugee groups to provide workers during harvest seasons, or on overseas workers who do not speak English in slaughterhouses, in order to keep production going. Investor migrants temporarily brought capital into Australia but were unable to drive industrial development, create employment or diversify the economy, and this category of migration was eventually abolished under pressure. The points-based skilled migration program…

In recent years, the Victorian Government has pushed a controversial labour policy, seeking to become the first jurisdiction in the world to enshrine the right to “work from home” (WFH) in law, allowing eligible employees to work from home for up to two days a week, in proportion to their working arrangements.

However, the bill took an unexpected turn before the vote. On September 10, the Victorian Coalition, together with several crossbench MPs, voted 18 to 17 in favour of referring the bill to a parliamentary committee for inquiry. As the committee is not due to report until October 20, while Parliament will rise after September 24 until the state election, the bill is essentially unable to pass during the current parliamentary term.

On the surface, this is a policy aimed at increasing workplace flexibility and improving work-life balance. But behind it lies a series of practical and management challenges. Should WFH become a legal right? What impact would WFH have on society? And the most fundamental question is: how far should the government intervene?

From “Company Benefit” to “Legal Right”

The most significant change introduced by the bill is to transform WFH from an arrangement determined by employers into a right that employees can legally request. Eligible employees whose jobs allow them to work remotely can apply to work from home for up to two days a week. Applications must be made in writing, while employers must respond within a specified period. If an application is refused, the employer must also provide an alternative arrangement and reasonable grounds for the refusal.

However, this right would not apply to all employees. Probationary employees, apprentices, interns, participants in graduate programs and some casual workers are excluded from the scheme. Even where an employee is eligible, an employer can refuse a request based on operational requirements, such as when work must be performed on site, involves on-site equipment, or when WFH would affect productivity, safety, training, customer service or data confidentiality.

If a dispute arises over a WFH arrangement, an employee can first seek conciliation through the Victorian Equal Opportunity and Human Rights Commission. If the matter cannot be resolved, it can be taken to the Victorian Civil and Administrative Tribunal (VCAT).

The Practical Challenges Facing Businesses

Once WFH changes from an arrangement determined by individual businesses into a legal right, businesses will need to deal with more than simply deciding whether employees can work from home. They will need to establish a long-term system for managing work arrangements. Businesses will need to determine which positions are suitable for remote work, how employees should submit applications, and what principles managers should use when making decisions. When different employees make similar requests, businesses will also need to ensure that applications are handled fairly and consistently to avoid disputes.

In practical management terms, businesses will also need to deal with who provides and maintains equipment, how company information can be securely accessed outside the office, and how office space should be reorganised. When employees can work from home on different days, managers will also need to reorganise staffing to ensure enough people are present when face-to-face collaboration is required, while maintaining work handovers, meetings and day-to-day communication. For teams that need to respond to customers immediately, they will also need to ensure that services continue to operate normally when employees are not in the office.

Training and employee performance management may also need to change. For new employees, some work skills and company culture that were previously learned gradually through everyday interaction with colleagues may require more formal training and communication as WFH increases. Managers also cannot rely simply on whether an employee is physically present in the office to assess how work is progressing. They will need to rely more heavily on work outcomes, progress and regular communication.

For large businesses, these issues may be handled by existing human resources, IT and management teams. But for small businesses with limited staff and resources, establishing a WFH system, processing applications, providing equipment, maintaining information security and reorganising office space could all create additional costs.

Does Higher Individual Productivity Mean Higher Overall Productivity?

For many jobs that rely primarily on computers, working from home can bring various benefits. Employees do not need to spend time commuting every day and may find it easier to concentrate in a quieter and familiar environment. For work involving long periods of document processing, writing or data analysis, completing the work at home may not be very different from doing it in the office, as long as suitable equipment and an internet connection are available.

However, higher individual productivity does not necessarily mean that the overall workflow of a business will become more efficient. For tasks with fixed processes that can be completed independently, remote work may be highly effective. But when work involves cross-departmental coordination, immediate decision-making or frequent collaboration, employees being spread across different locations may increase the time required for communication and coordination.

One employee may be more focused at home and complete their part of a task more quickly. But if the team then needs more time to wait for responses, reorganise tasks or communicate, the overall workflow may not become faster. From an employer’s perspective, what needs to be considered is the operation of the entire team and business, rather than simply whether an individual employee can complete their work at home.

This also shows that whether WFH can improve overall efficiency depends to a large extent on the nature of the work and how a business operates. Different positions have different requirements, and the effects of working from home may vary between employees. When governments establish statutory WFH arrangements, they therefore cannot simply apply the same standard to all businesses and jobs.

The Importance of Face-to-Face Interaction

The role of the office is not limited to getting work done. For many people, the workplace is also an important social environment in their daily lives. Seeing colleagues every day, chatting, having lunch together, or even having a few casual conversations during work are all part of building and maintaining relationships. When employees work from home for long periods, or when their days in the office do not overlap with those of other colleagues, these naturally occurring interactions also become less frequent.

For people who have recently moved to Australia, this change may be even more significant. The workplace can sometimes be an important channel for new migrants to engage with Australian society, meet people from different backgrounds and build social networks. If work and daily life are concentrated in the same private space for long periods, opportunities for employees to interact with the outside world may also decrease. These effects cannot necessarily be measured simply in terms of productivity or commuting time.

Face-to-face interaction is particularly important for new employees. People entering the workforce not only need to learn their job responsibilities, but also need to understand how the company operates, the team culture, and how to deal with situations that are not written down in work guidelines. When sitting beside colleagues, they can ask questions immediately and gain experience by observing how more senior colleagues handle situations.

For some jobs and services that require direct contact, face-to-face interaction is even more difficult to replace completely through remote methods. Taking the National Disability Insurance Scheme (NDIS) as an example, some services can be provided by phone or online. However, in remote communities, the NDIS still arranges local service teams to regularly provide face-to-face support in the community, and also has community connectors to help participants access services. This shows that technology can reduce the limitations created by distance, but different jobs and services may still require face-to-face forms of interaction.

People Being Left Behind by Digitalisation

WFH also brings another issue. As more work moves online, some services that could previously be handled face to face may also gradually shift towards remote models. Some specialised federal government agencies already have a relatively high proportion of employees working remotely or from home.

For people who are familiar with smartphones, online platforms and video communication, this may simply be a change in the way services are delivered. But for people who are less familiar with digital devices, accessing services may become more difficult as a result. As government departments, businesses and public services increasingly rely on online bookings, electronic forms, telephone services or video communication, tasks that previously only required someone to visit an office in person and explain their situation to a staff member may instead require them to log into a website, find the relevant information, fill in forms and then wait for a response.

Older people are particularly likely to be affected. Even if they own a smartphone or computer, they may not be familiar with the websites and systems used by different government departments and businesses. They may need more time to figure things out, or even rely on family members or friends to handle matters on their behalf. For older people who live alone or lack family support, the impact of reduced face-to-face services may be even more significant.

As some employees gain greater flexibility through remote work, the way services are delivered across society may also change. But this convenience may not be enjoyed equally by everyone. As the government promotes changes to working arrangements, it also needs to consider the needs of these people and ensure that the convenience brought by digitalisation does not ultimately become a burden for some members of the public.

Appeasing Workers While Ignoring Reality

It is difficult to separate the Victorian WFH bill from political considerations. For the Labor Government, “two days of working from home each week” can both respond to employees’ demands for greater flexibility and help shape an image of the government as being on the side of workers. From an electoral perspective, the policy clearly carries an element of appealing to workers and seeking their votes.

The problem is that the political message of protecting workers is easy to promote, while the realities of the workplace are far more complex. If the policy places too much emphasis on “what rights workers should have” without fully considering how businesses can actually operate under the arrangement, it may ultimately become a policy that is popular among workers but generates controversy in its implementation.

Victoria has previously seen examples of a gap between policy ideals and practical implementation. In 2022, the Andrews Government introduced the Sick Pay Guarantee trial, allowing eligible casual and contract workers to receive up to five days of sick and carer’s leave each year. The policy was primarily justified as a way to protect workers and prevent them from having to choose between their income and their health because they did not have access to paid sick leave. However, the scheme was eventually ended in 2024 as part of spending cuts, with the government estimating the total cost of the program at approximately AUD245.6 million.

This example shows that even when policies aimed at protecting workers have a positive starting point, implementation still needs to deal with issues of cost, execution and long-term sustainability. It inevitably raises questions about whether the government had fully considered long-term costs and practical feasibility before introducing the policy, or whether it first responded to political and electoral needs with measures popular among workers and left the subsequent problems to be dealt with later.

The WFH bill also needs to confront the gap between policy ideals and reality. As discussed above, businesses need to deal with a range of practical issues when implementing WFH. If the Labor Government focuses only on the greater flexibility workers can obtain while failing to adequately explain how businesses will bear the impact of these changes, it raises questions about whether the government is simply focused on responding to workers’ demands and seeking votes while overlooking workplace realities.

How Far Should the Government Intervene?

Looking at other parts of the world, governments have taken different approaches to WFH.

Under the current system in the Netherlands, working from home is not itself a legal right. However, eligible employees can formally request a change to their place of work, including partial work from home, under the Flexible Working Act. Employers are required to consider such requests and can refuse them on reasonable business or operational grounds. Ireland has also had a statutory right to request remote work since 2024, giving employees a formal channel to make WFH requests. Employers must consider applications according to an established procedure before making a decision based on the nature of the work and the actual circumstances.

The common approach in both places is for the government to provide basic protections, ensuring that employees have a formal channel through which to make requests, while leaving specific working arrangements to be negotiated between employers and employees. This model gives employees a degree of protection while preserving room for businesses to adjust according to their actual circumstances.

By comparison, the Victorian bill would directly give eligible employees a statutory right to work from home for up to two days a week. This goes beyond protecting an employee’s ability to make a request and involves the government intervening further in actual working arrangements.

The question is whether the government needs to intervene to this extent. Whether WFH can operate effectively depends on the nature of the position, team structure, customer needs and the way a business operates. These conditions are difficult to cover through a single set of legal arrangements. The government can protect an employee’s right to make a reasonable WFH request, but going further and stipulating that eligible employees can work from home for two days a week could turn a working arrangement that would otherwise be negotiated between employers and employees into a legal right directly prescribed by the government.

Such a uniform standard may also overlook the diversity of workplaces themselves. Different positions within the same company can have completely different working arrangements. Large and small businesses also have different management capabilities, and even the same position can have different practical requirements in different companies. When working arrangements themselves vary, a standard established in advance by the government for most eligible employees could limit the ability of businesses and employees to reach arrangements that are more suitable to their individual circumstances.

The Answer to Working Arrangements Still Lies in the Future

In fact, businesses’ attitudes towards WFH continue to evolve after the pandemic. In recent years, a number of major companies, including Amazon, Microsoft and JPMorgan, have gradually tightened or removed some WFH arrangements, requiring employees to spend more time working in physical offices. This reflects the fact that businesses are still working out the balance between remote and office-based work, and that this balance may also change with economic conditions, technological development and management practices.

At the same time, working arrangements may also develop in another direction. In recent years, the rise of “digital nomads” has seen some people work for overseas companies while living in places such as Bali, with their place of work completely separate from the location of their employer and company. This also shows that there is no single fixed answer to how work should be organised.

Technology is also likely to further change this balance. Artificial intelligence, virtual collaboration tools and digital platforms continue to develop. Work that requires face-to-face interaction today may be handled more effectively remotely several years from now. At the same time, businesses may also find that certain types of work still require teams to collaborate in the same physical space. Whether more people will work from home, return to offices, or adopt more diverse working arrangements in the future remains difficult to determine.

Therefore, there may simply be no single standard for how many days employees should work from home or which jobs are suitable for remote work. Rather than having the government establish a fixed arrangement in advance for all businesses and employees, it may be more important to create a fair and flexible framework for negotiation, allowing businesses and employees to adjust according to their actual needs while giving working arrangements room to change alongside the future workplace.

The AI data centre boom is becoming one of the most controversial new infrastructure developments in Australia. Global technology giants are investing billions, and even tens of billions, of Australian dollars in the country, driving a data centre construction boom worth more than A$150 billion.

Australia has land, renewable energy and a stable institutional environment, making it an ideal destination in the eyes of technology giants. But the enormous electricity, water and infrastructure demands behind data centres are also testing whether Australia can withstand this technology boom.

Will this data centre boom ultimately become Australia’s next wealth opportunity, or will it lead to higher energy and living costs borne by ordinary Australians?

However, before discussing the AI data centre boom, one premise needs to be clarified. This article is primarily based on the AI development model currently widely adopted by large technology companies — relying on high-performance chips, servers and large-scale data centres to provide computing power.

But AI does not necessarily have to follow only this development path. Take Chinese AI company DeepSeek as an example. Its lower-cost approach to model development has prompted the market to rethink whether AI really needs ever-increasing numbers of chips, computing power and data centres. As AI technology continues to advance, demand for large-scale infrastructure may also change in the future.

Why Are Global AI Giants Suddenly Looking to Australia?

In recent years, Australia has become a popular market for AI data centres worldwide, with technology giants stepping up their investments. Amazon’s AWS plans to invest around A$20 billion over the next five years, while Microsoft has also increased its AI investment in Australia to around A$25 billion. OpenAI plans to build the Stargate computing campus in Sydney, while Project Southgate, involving Nvidia, and Anthropic, the developer of Claude, also have plans for large-scale deployments. Although some projects are still in their early stages, Australia is becoming an important market for global AI companies.

There are actually common considerations behind so many technology giants entering Australia one after another. Australia’s conditions happen to meet the development needs of large-scale data centres.

One of the most direct advantages is land. Large data centres do not necessarily need to be located in city centres. Instead, they require large areas of land, as well as access to infrastructure such as power grids and telecommunications networks. There are still many areas around Sydney and Melbourne that can accommodate large-scale projects, making Australia more capable of accommodating increasingly large data centres than land-constrained markets such as Tokyo and Singapore.

The second factor is energy. Australia has abundant solar and wind resources, while what AI data centres need most is large amounts of stable electricity that can be secured over the long term. This means that when technology companies choose the location of their next large data centre, they are no longer considering simply whether there is enough electricity today, but whether electricity supply can continue to increase over the next decade. As a result, Australia’s enormous renewable energy potential has become an important factor attracting technology companies.

Third, Australia’s relatively stable political and legal environment is also an advantage. Once built, data centres often need to operate for many years, so companies naturally want to invest huge amounts of money in a place where the policy and investment environment is relatively predictable. In addition, Australia has close ties with the United States and possesses submarine cables and telecommunications infrastructure connecting Asia and North America, giving it a certain strategic value in the eyes of global technology companies.

The Energy Cost Behind Data Centres

However, the rapid expansion of data centres has also triggered a backlash in Australian society. These facilities require large amounts of electricity around the clock and use water for cooling. As the number of projects continues to increase, residents are beginning to worry: Where will the electricity and water come from? Can the existing power grid cope? And who will ultimately bear the cost of the additional infrastructure?

These concerns are not unfounded. The Australian Energy Market Operator, AEMO, estimates that data centres currently account for around 2% of electricity supplied through Australia’s power grid. But as AI demand increases rapidly, related electricity consumption could grow by around 25% per year, reaching approximately 12 TWh by 2030, accounting for about 6% of national electricity supply. By 2050, this could increase further to around 34 TWh, accounting for approximately 12%. In other words, data centres currently account for only a small share of Australia’s electricity demand, but over the coming decades they could gradually become one of the grid’s major electricity users.

Looking at the scale of individual projects makes it easier to understand the size of the issue. For example, in Plumpton, around 30 kilometres northwest of Melbourne, plans are underway to build a massive data centre precinct covering approximately 350 hectares. Around 140 hectares would be used to build four data centres, making the site almost six times the size of Chadstone Shopping Centre, with a maximum power capacity of up to 2.4 GW. This figure could even exceed the electricity demand of some of Victoria’s large traditional power generation facilities.

This is not an isolated case. Australia currently has more than 160 data centres in operation, most of them concentrated in New South Wales and Victoria, while at least another 90 projects are being planned or prepared. AEMO estimates that by 2030, data centres could account for around 11% of available electricity in Sydney, significantly higher than the current figure of around 4%. Melbourne also faces a situation worth watching closely. By then, data centres could consume around 8% of Victoria’s electricity, more than four times the current level.

And this is where AI data centres are most controversial: the issue is not whether Australia has the capacity to supply electricity, but whether Australia can increase generation, transmission and energy storage infrastructure quickly enough when dozens or even hundreds of large data centres emerge at the same time. If data centre growth far outpaces the construction of new renewable energy and grid infrastructure, the AI boom could become not just a technology investment boom, but a race to secure energy supply.

The Resource That Is Often Overlooked: Water

In addition to electricity, data centres have another easily overlooked “hidden cost” — water.

AI servers generate large amounts of heat when operating at high speeds for extended periods, so data centres must continuously provide cooling. Some cooling systems require large amounts of water, and as the computing power and energy consumption of AI equipment continue to increase, cooling requirements may also rise further.

Infrastructure Australia estimates that a large data centre of around 250 MW could use an amount of water each year equivalent to the household water consumption of between 5,000 and 35,000 homes, depending on the efficiency of its cooling system. Sydney Water also estimates that if the currently proposed data centre projects are developed on a large scale, Sydney’s data centres could require around 90 billion litres of water each year by 2035, equivalent to approximately 15% to 20% of Sydney’s current water supply.

For a country already facing drought, population growth and climate change, this is not a small figure. When data centres compete with households, agriculture and other industries for the same water resources, the question is no longer simply whether Australia should develop AI, but how many resources Australia actually has available to support this AI boom.

The impact of data centres therefore extends far beyond the technology sector. It involves energy, water resources, land and urban planning, and could ultimately affect the cost of living for ordinary households.

The Australian Government’s Solution

Faced with the electricity, water and infrastructure pressures created by the rapid expansion of data centres, the Australian federal government is attempting to establish nationwide rules.

In March this year, the government first announced a policy framework for data centre and AI infrastructure developers, covering areas including energy, water resources, national interest, local employment, research and innovation. In July, it proposed nationwide AI data centre standards. Last month, the National Cabinet also agreed to develop nationally consistent mandatory standards for energy, water resources and land use, with the government planning to legislate formally in early 2027.

The core concept of the policy is straightforward: data centres can invest in Australia, but they cannot leave the additional costs to society. The government wants large data centres to bear the costs of additional electricity supply and grid connections themselves, have the ability to adjust their electricity consumption when the grid is under pressure, reduce water consumption, and take into account the impact of projects on housing, schools, farmland and nearby communities.

One of the most closely watched requirements is the “bring-your-own-power” requirement. Under this approach, new large data centres would need to use renewable energy as their primary electricity source, together with sufficient backup power to ensure stable operations even when wind or solar generation is insufficient. In other words, the federal government wants to ensure that data centre expansion does not run ahead of Australia’s energy transition.

However, the federal government’s direction is not fully accepted by all states. Queensland and the Northern Territory want to use existing coal and gas-fired generation facilities to supply electricity to data centres. The reason is practical: these large projects represent enormous investment and economic activity, and state governments worry that if regulations are too strict, companies may invest elsewhere.

As a result, the latest national proposal ultimately retains some flexibility. The data centre standards do not completely rule out coal and gas. Energy Minister Chris Bowen said that if state governments can demonstrate that their existing coal and gas generation mix can provide cheaper electricity than renewable energy, the federal government would consider limited exemptions.

Can the Government’s Plan Really Solve the Problem?

On the surface, the federal government’s plan appears to have answered the most fundamental question: data centres cannot use public resources without limits, and the additional costs of energy and infrastructure should also be borne by companies themselves. But the real challenge is that requiring data centres to “bring their own power” does not mean Australia will suddenly have more electricity as a result.

Even if technology companies are willing to invest in solar, wind or batteries themselves, these energy projects still require land, transmission lines and other grid infrastructure. Planning, approval and construction can also take years. In other words, if data centres are built faster than renewable energy and grid infrastructure can expand, even if companies are willing to pay the associated costs, they may not be able to obtain enough clean energy in time.

More fundamentally, data centres are only one part of Australia’s future growth in electricity demand. As electric vehicles become more widespread, households gradually switch to electric appliances, businesses become further electrified, and the population continues to grow, overall electricity demand will also increase. Therefore, even if the government successfully limits the impact of data centres on the grid, this policy alone cannot solve Australia’s broader electricity supply problem.

The challenge Australia faces is not simply “what kind of electricity should data centres use?” It is whether the country’s entire electricity system can keep up with continuously rising future demand. If the construction of renewable energy, batteries and transmission networks continues to lag behind demand, even the strictest data centre standards may only limit electricity consumption without actually increasing supply.

Therefore, whether this policy succeeds will ultimately depend not only on whether the government can establish rules, but also on whether Australia can build the necessary energy and infrastructure in time before AI investment reaches a large scale. Otherwise, “bring your own power” could ultimately become a promise that sounds reasonable but may not be easy to fulfil.

Another Test: National Security

In addition to energy and water resources, the rapid expansion of AI data centres also raises another issue that cannot be ignored — national security and data security.

Data centres store and process large amounts of sensitive information, including government information, corporate data and personal information. As AI computing increasingly relies on large-scale data centres, if these facilities are subjected to cyberattacks, data breaches or even interference by foreign forces, the impact may extend beyond individual companies and potentially involve Australia’s critical infrastructure and national security.

Especially when large data centres are operated by overseas technology companies, the Australian government needs to consider not only how much investment these companies bring, but also who controls these infrastructure assets, where the data is stored, and the extent to which Australia can maintain control over its own AI computing capacity.

If the government focuses only on the speed of investment while failing to establish appropriate regulation and supporting measures in time, the economic opportunities brought by AI could also come with new social and security costs.

The Economic Opportunities Brought by Data Centres

CommBank estimates that data centre investment will become an important driver of growth in Australian business investment over the coming years. In 2026 and 2027 alone, related investment is expected to contribute around 0.2 percentage points to real GDP growth each year.

From construction through to ongoing operations, data centres will also create jobs, including for electricians, engineers, cooling system technicians, construction workers, network engineers and facilities management personnel. As large-scale projects are progressively developed, demand for relevant skilled workers in Australia will also increase.

However, data centres remain a highly capital-intensive industry. A single facility can involve billions of Australian dollars in investment, but once built, it does not require a large workforce. Meanwhile, core hardware such as AI chips, GPUs, servers and high-end networking equipment currently relies heavily on overseas imports.

In other words, overseas technology companies can invest in and build data centres in Australia. Australia can certainly benefit from construction, engineering, land, energy and some tax revenues, but the higher-value technologies, products and profits within the AI industry supply chain may not all remain locally.

Therefore, what Australia should truly seek is not simply how much investment data centres themselves can bring, but how these infrastructure assets can be used to further expand the domestic AI industry.

Letting Data Centres Drive the Development of Different Australian Industries

As demand for AI computing continues to increase, data centres can provide Australian businesses, universities, research institutions and start-ups with greater access to GPU computing power and cloud resources, making it easier for local AI technologies to move from research into commercialisation. The government’s “Buy Australian AI Partnership” also aims to increase the adoption of Australian AI products by local businesses and banks, further expanding the domestic AI market.

If these investments can form closer partnerships with local businesses, talent and research institutions, Australia could further develop talent and technology on the basis of its existing AI industry, and even take locally developed AI products to overseas markets.

At the same time, the enormous energy demand of data centres could also drive another supply chain.

AI requires stable and large amounts of electricity. In the future, demand for solar power, wind power, battery storage, transmission equipment, transformers, microgrids and energy management technologies will all increase. With its advantages in land and energy, Australia is well positioned to further develop the energy and infrastructure needed to support AI computing.

If this cycle can be established, the benefits brought by data centres will go beyond the investment itself. Technology companies’ demand for electricity and computing power can drive the development of renewable energy, the power grid and related technologies, while more advanced infrastructure can in turn improve the competitiveness of other businesses and industries.

Conclusion: Can Australia Become the AI Hub of the Southern Hemisphere?

For a country with vast land, relatively low population density and abundant energy resources, AI data centres are actually well suited to development in Australia.

But faced with investments worth billions or even hundreds of billions of Australian dollars, Australia does not need to move as quickly as possible. It needs to make more careful choices. The government should not focus only on investment and economic growth and rush to accept every data centre proposal. Instead, when approving large data centres, it should also take a long-term planning approach and assess the risks that future data centre expansion could pose to energy, the environment and national security.

More importantly, the costs of the AI boom cannot ultimately be passed on to Australian residents. Whether it is pressure on electricity and water resources, public infrastructure expenditure, or the impact of land development, carbon emissions, environmental pollution and ecosystems, ordinary households and local communities should not be made to bear the costs of large-scale technology investment.

If Australia can attract AI investment while requiring companies to bear the corresponding energy, infrastructure and environmental costs, and transform investment into the long-term development of local talent, research and the AI industry, data centres could bring more than just another infrastructure boom. They could allow Australia to make use of its land, energy, talent and existing AI advantages and, as AI reshapes the global industrial landscape, establish a more competitive and sustainable development model.

Only when a balance is achieved between economic opportunities and social and environmental costs will Australia have the opportunity to move from being a destination that attracts global AI investment to becoming an AI hub in the Southern Hemisphere that connects Asia with global markets and possesses domestic AI capabilities.