Australia’s public sector technology agenda is entering a new phase, as governments at all levels look for ways to modernise services while working within tighter financial and workforce constraints.

Across federal, state, and local government, the emphasis is shifting from broad digital transformation programs towards investments that can improve efficiency and make better use of existing resources, while also strengthening resilience. Artificial intelligence has emerged as a significant part of that discussion, although its role is still evolving.

At the federal level, the focus is on building the governance, data, and technology foundations needed to introduce AI safely at scale, while continuing to modernise critical systems and services.

State governments face a sharper fiscal challenge, driving interest in consolidation, adoption of shared capabilities, and the use of AI as a source of potential productivity gains. But for AI specifically, pressure is growing to move beyond experimentation and demonstrate measurable returns.

Local government presents a different picture. While smaller organisations often lack the resources of larger governments, their shorter decision-making processes can make councils effective testing grounds for AI, particularly in customer service, planning, and internal productivity.

So, while some of the emphasis on citizen services that characterised previous Public Sector Tech reports has faded in favour of efficiency and resilience, AI may yet become the catalyst for a new generation of citizen-facing capabilities.

But across all three tiers, the challenge is increasingly the same - turning technology into practical improvements without compromising reliability, accountability, or public trust.

Public Sector Tech 2026 was created using insights, research, and opinion from industry analysts, and end-user CIO case studies, to provide a compelling overview of the key trends, challenges and threats in public sector for IT in the last 12 months.  

Hear from local, state and federal government tech leaders including:

• Lisa Ippolito, AI Enablement Lead, City of Whitehorse
• Marion Greig, Manager for Strategy, Innovation and Transformation, City of Casey
• Peter Meere, Director, Office for AI - Department of Treasury and Finance SA
• Scott Fennelly, Director for Real-Time and ITS Operations, Main Roads WA
• Simon Quarrell, Deputy Chief Executive Officer, Digital Transformation Agency
• Jonathon Thorpe, Chief Customer Officer, Services Australia
• Charles McHardie, Chief Information and Digital Officer, Services Australia
• Amanda Chalmers, Chief Digital and Data Officer, Department of Agriculture, Fisheries, and Forestry
• Dean Lacheca, Vice President and Research Analyst, Gartner
• Sam Higgins, Vice President and Principal Analyst, Forrester