Treasury Yet to Calculate Net Benefit of Attracting Data Centre Investment

A person walks outside Australian data centre operator NextDC’s Artarmon facility in Sydney, Australia, on Sept. 15, 2026. Saeed Khan/AFP via Getty Images

Treasury has yet to work out whether attracting large artificial intelligence (AI) data centres to Australia will deliver a net gain for the country, a parliamentary inquiry has heard.

Appearing before the Joint Select Committee on Artificial Intelligence on Oct. 30, Treasury official Jeremy Lawson said the department had not done “a formal net benefit calculation” on such investment.

“I’m not sure how you could make such a calculation, given the nature of the uncertainties,” Lawson said, adding that any figure would likely be too “rubbery” to base decisions on alone.

Lawson said that without upfront investment Australia would fall further behind other countries on productivity and living standards, pointing to Productivity Commission research suggesting AI could lift labour productivity by about 4.3 percent over a decade.

But Nationals Senator Ross Cadell said the same research found the biggest gains came from using AI, not from training AI models, which is the most power-hungry part of the industry.

Cadell said governments had already spent $12.5 billion propping up energy-hungry businesses such as the Tomago aluminium smelter (which received $2.5 billion) in his region, while one proposed Queensland data centre would draw 2.16 gigawatts at full capacity.

“‘May,’ for a politician, is the scariest word you can ever hear, because we don’t know what we’re getting,” he said.

Giving Away Our Sun and Wind: MP

Independent Curtin MP Kate Chaney compared the push for data centres to the gas industry, where she said much of the value flowed offshore into private hands.

“How do we make sure that it’s different with data centres, so we’re not just giving away our sun and our wind?” she asked. “Are we going to end up being a landlord for these training models?”

Treasury’s own submission (pdf) to the inquiry, a chapter of the 2026 Intergenerational Report, says that because much of the equipment is imported, only about one-third of data centre investment is expected to directly support activity in Australia.

“In a modern economy, co-location isn’t strictly necessary to enjoy the benefits of having that domestic capacity,” he said.

But he added that having training capacity here could still make it easier for local researchers and businesses to develop AI, while stressing there was no certainty.

There is also a distinction between hosting the computing infrastructure used to train AI models and developing the technology itself.

A previous Senate inquiry heard that foreign companies could train their most advanced models in Australia without giving local researchers access to the underlying development process. The models remain the intellectual property of the companies that create them, regardless of where the computing takes place.

On tax, Treasury’s Trevor Power said data centre companies would pay company tax like any other business, with the Tax Office policing multinationals.

Chaney raised concerns about “clever accounting” and transfer pricing, where multinationals shift profits between their own companies in different countries to cut their tax bill.

Power, who said he was not Treasury’s tax expert, pointed to the national AI standards now being developed, saying they would set the rules “to make sure that those investments are net economic benefits for the country.”

Prime Minister Anthony Albanese announced in July that the government intends to legislate the standards, including mandatory requirements for large data centres. Treasury’s submission says these will cover energy, water and location.

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