Harnessing data and digital technology

Unlocking the benefits of AI and data to spark growth

Australia can unlock the benefits of data and digital technology with a growth-focused approach to regulating AI, new pathways to give people access to the data about themselves, and a shift to digital financial reporting, according to the interim report of a new PC inquiry.

The interim report, Harnessing data and digital technology, is the third of five inquiries into productivity the PC is undertaking, presenting practical reforms to get Australia back on the path to growth.

‘The average Australian today enjoys living standards three times higher than the average Australian in the 1960s, due in part to the productivity growth that new technology has delivered,’ said Commissioner Stephen King.

‘With the right policy approach, AI technology and innovations in data could help Australia get back on the path to growth.’

Regulating AI for growth

While the full effects of AI on productivity are still uncertain, the report finds that AI will likely add more than $116 billion to Australian economic activity over the next decade.

It recommends an approach to regulation that limits the risks that AI presents without stifling its growth potential. The Government should check for gaps in current regulation exposed by AI and, where possible, amend that same regulation to fill them. AI-specific regulation should only be considered as a last resort.

‘Like any new technology, AI comes with risks. But we can address many of these risks by refining and amending the rules and frameworks we already have in place,’ said Commissioner King.

‘Adding economy-wide regulations that specifically target AI could see Australia fall behind the curve, limiting a potentially enormous growth opportunity.’

Harnessing data

The report also recommends the Government establish simple, flexible regulatory pathways to give individuals and businesses greater access to data that relates to them.

The pathways would ‘meet sectors where they are’ and be gradually implemented, starting with use cases where data sharing would have large benefits and low compliance costs.

‘Businesses use data about us every day, but it’s often more difficult than it needs to be for us to access that same data ourselves,’ said Commissioner King.

‘With better access to this data, we can get more value out of our products and services and get insights and advice that could help us make better decisions.’

The report finds that improving people’s ability to access data that relates to them could spur competition and innovation and deliver productivity gains worth as much as $10 billion a year.

The report also looks at data protections embedded in the Privacy Act, and finds they are costing business, limiting innovation, and in many cases, not providing the protections consumers expect.

It finds that parts of the Act are too focused on prescribing actions or procedures businesses must take, rather than outcomes, and can place the burden of privacy protection on individuals, rather than businesses.

‘To use a product or service, consumers are often asked to acknowledge lengthy, complex privacy policies that few have the time to read. In many cases, this is not providing the protection consumers expect, and it can be costly and difficult for businesses to comply with,’ said Commissioner Julie Abramson.

The report recommends the Government introduce an alternative compliance pathway for business to meet their privacy obligations, focused on outcomes rather than controls-based rules.

A shift to digital financial reporting

The report also looks at how Australia can better harness the data contained in the financial reports that many large companies and organisations must prepare and submit.

Australia is one of the only countries that still requires companies to submit these reports in non-digital formats like hardcopy or PDF. This makes extracting data from Australian financial reports expensive, time consuming and more prone to error.

The report recommends that the Australian Government make digital financial reporting mandatory for disclosing entities.

‘The data in these reports informs countless financial decisions that affect almost all of us through our superannuation or the shares we own. Digital financial reporting saves time and money but it could also lead to better, more profitable decision-making,’ said Commissioner Abramson.

The PC is now accepting submissions on these reforms to inform the final report that will be released later this year.

Upon its release, the interim report, Harnessing data and digital technology, will be available from the PC’s website: www.pc.gov.au/inquiries/current/data-digital#interim

Media requests

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Preliminaries: Cover, Copyright and publication detail, Opportunity for comment, Terms of reference, Disclosure of interests, Acknowledgements and Contents

Executive summary

Draft recommendations

About this inquiry

The data and digital technology opportunity

Our package of reforms

1. Enable AI’s productivity potential
   1. The PC’s blueprint for AI regulation
   2. Case study: copyright law in the age of AI
2. New pathways to expand data access
   1. Data about you should be available for you to use
   2. New regulatory pathways to expand data access
   3. What might new access pathways look like?
3. Supporting safe data access and use through outcomes-based privacy regulation
   1. The Privacy Act in a changing data landscape
   2. Renewing the focus on privacy outcomes
   3. Proposed reforms risk entrenching existing problems
4. Enhance reporting efficiency, transparency and accuracy through digital financial reporting
   1. We are forgoing the benefits of digital financial reporting
   2. Digital financial reporting should be the default
   3. The PC is seeking feedback on implementation issues

• A. Public consultation
• B. Modelling the benefits of data and digital reforms
  • B.1 Summary
  • B.2 Improved use of data
  • B.3 Reducing privacy compliance burdens
  • B.4 Estimating the productivity effects of AI

Abbreviations

References

Printed copies of this report can be purchased from Canprint Communications.