A $200 billion boost to the economy – but it may mean losing your job

3 months ago 25

A combination of artificial intelligence and better use of our personal information could deliver a $200 billion boost to the economy over the next decade, the Productivity Commission has found, while warning it may cost some Australians their jobs.

As the nation’s second-largest company slammed a proposal from the commission that would increase its annual tax bill, the agency urged Anthony Albanese to reject calls from within his government to impose binding regulation on AI, saying it could leave everyone worse off.

Artificial intelligence could be the biggest breakthrough since steam engines, delivering a huge boost to the Australian economy.

In its third report before this month’s economic roundtable, at which 23 hand-picked experts, business and union leaders will map out ways to lift the country’s productivity growth rate, the commission said data and digital technologies were the modern engines of economic growth.

Likening the possible gains from AI to the way steam engines helped begin the industrial revolution, the commission said the emerging technology could underpin a surge of productivity over coming years.

It said productivity by workers could grow by 4.3 per cent, which, based on the current size of the jobs market and working hours, could lift economic output by $116 billion over the next decade.

Benefits from allowing businesses and individuals to access and share data that relates to them, such as making better spending decisions, could potentially add another $10 billion a year through higher productivity.

Commissioner Stephen King said new technology had driven productivity growth since the 1960s, which had improved living standards threefold since.

“With the right policy approach, AI technology and innovations in data could help Australia get back on the path to growth,” he said.

Apart from a direct financial benefit, the commission said AI and better use of data could increase the pace of technological breakthroughs that, in turn, would lift economic and productivity growth.

It noted that the advent of hand calculators had helped scientists in the early years of the space race to quickly and more accurately solve complex mathematical problems, giving them more time to focus on designing better rockets.

An emerging concern within the government and the union sector is the loss of jobs from AI, with some ministers actively canvassing specific laws for the technology.

The commission said, like previous technology changes, demand for staff was likely to increase in some areas but fall in others. It admitted there was likely to be “painful transitions” for those whose jobs are made redundant.

It said the government may have to consider extra support to retrain staff whose occupations disappeared, while conceding some workers would have to rely on unemployment benefits.

But the commission argued against special AI laws, arguing existing regulations would be sufficient to deal with issues that arise out of the technology.

Even senior ministers in the federal government are concerned that AI could lead to major job cuts.

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

Treasurer Jim Chalmers said he was optimistic about the potential of AI but also noted there were risks with its deployment.

“We’re confident we can deploy artificial intelligence in a way consistent with our values if we treat it as an enabler, not an enemy, by listening to and empowering workers to adapt and augment their work,” he said.

Increasing the movement of low-risk consumer data, the commission said, would benefit both businesses and individuals.

It noted that some rules about the release of company information were costly, describing as outdated a requirement that company financial reports be produced in a hard copy or PDF format.

The commission’s estimated benefits from AI and the use of data dwarf those it has suggested could flow from a cut in the company tax rate to 20 per cent for firms with revenues of less than $1 billion and a new 5 per cent cashflow tax on all companies.

But BHP Australia president Geraldine Slattery said any plan to lift tax would be “counterproductive” and make it more difficult for local firms to compete and invest.

She said any meaningful discussion about productivity had to consider the country’s competitiveness as a global investment decision and that included the tax rate.

“Australia’s corporate tax rate is already among the highest in the OECD, and combined with Australia’s high energy costs and flatlining labour productivity, increased taxes would put Australia at a clear disadvantage,” she said.

“Any move to raise taxes here would make it harder for Australia to compete and harder to sustain and grow the very industries and jobs that drive the most prosperity and productivity.”

As part of the roundtable process, the government is in the process of running 41 separate ministerial meetings canvassing areas from tourism to agriculture and climate change.

On Thursday, economists from think tanks, academia and the private sector will hold their own roundtable to be headed by assistant competition minister Andrew Leigh. Attendees include independent economist Saul Eslake, prominent tax expert Miranda Stewart, former Reserve Bank deputy governor Guy Debelle and CEDA chief economist Cassandra Winzar.

“Some of the best ideas come from outside Parliament House, which is why we’re bringing together some of the country’s sharpest minds to help shape the next wave of reform,” Leigh said.

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