Gov backs its own AI adoption with $225m

The federal government will invest $225 million into AI for its own use over the next four years, largely via the GovAI service and enablement functions.

The funding is one of the centrepiece technology-related allocations in the mid-year economic and fiscal outlook or MYEFO, a regular budget update traditionally announced in the lead-up to Christmas.

iTnews first revealed the existence of GovAI back in July. It has multiple components, but at its heart is a sovereign-hosted AI service for whole-of-government use, and associated training and enablement programs.

Of the $225.2 million allocated to GovAI, $166.4 million can be spent in the first three years on expanding the GovAI platform and on the “design, build and pilot [for] a secure, AI assistant” called GovAI Chat.

The funding appears to be gated. It's based on the program achieving certain milestones, mirroring the incremental approach taken by other jurisdictions to fund technology programs.

At the outset, there will be $28.5 million available to Finance and the Digital Transformation Agency (DTA) “for initial work and assurance”.

Pending the outcome of that work, including “a further business case and mid‑pilot assessment report”, a further $137.9 million will be made available.

In addition, Finance has landed $28.9 million over four years from FY2025–26 “to establish a central AI delivery and enablement function”.

The Australian Public Service Commission and the DTA will also receive $22.1 million over four years - and $400,000 a year after - “to deliver foundational AI capability building activities and a coordinated workforce planning initiative to help agencies manage AI‑driven changes in job design, skills and mobility.”

Finally, the DTA gains a further $7.7 million over four years “to strengthen its AI functions and establish an AI review committee to provide expert advice on high‑risk government AI use cases.”

The review committee members will be handpicked from across the Australian public service.

Finance minister Katy Gallagher said last month that the government wanted “every public servant to have access to secure generative AI directly from their laptop”.

As part of the government’s AI push, departments and agencies will also each need to appoint an executive overseer, equivalent to a chief AI officer.

While there is some lead-time for this to occur - mid-2026 - an iTnews analysis showed that entities are divided on how to meet the requirement.

The majority intend to incorporate AI responsibilities into an existing executive’s role, although a small number say they will recruit a standalone chief AI officer.

Outside of GovAI, MYEFO also has allocated just shy of $30 million a year for the next four years and $7.9 million a year from 2029-30, to set up an AI Safety Institute within the Department of Industry, Science and Resources.

It will work with regulators when it comes online next year to prepare industry settings to take advantage of AI technology.