Senator the Hon Tim Ayres

SALLY SARA, HOST: Sally Sara with you turning to federal politics at home and the ongoing attempts to woo developers of data centres to Australia. Australia's become a global hotspot for the centres with $150 billion worth of facilities in the pipeline. But, as you've been hearing, there are concerns about the energy grid and water supply.

Tim Ayres is the Minister for Industry, Innovation and Science and joins me now. Minister, welcome back to breakfast. SENATOR THE HON TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: Sally, g'day.

Really good to be on the show. Before we get to data centres, what's the Federal Government's view of the resignation of the UK Defence Minister John Healey? What does it mean for AUKUS?

Well, it will have no effect on the AUKUS partnership with the United Kingdom and the United States. This is a partnership that has deep support across all three countries’ political systems, within the public service and the defence agencies in all three countries and, indeed, with the defence industry, because it's in the interests of all three countries. Over the life of this agreement, over the life of the 30 year life of, for example, the agreement to provide nuclear powered conventionally armed submarines, there will be many Ministers for Defence for all three countries, many Secretaries for War in the United States’ case, who are there charged with delivering this program.

But the principle here is that John Healy resigned because of concerns about a lack of overall defence spending from the UK. Does that have [a] knock on [effect] for Australia? This was on the principle of that rather than someone being installed, someone being removed.

This is the principle on which he has resigned his position. Well, without offering a commentary on the politics of what's happening in the United Kingdom, of course it is a real feature of our government's approach to defence spending that there is a very strong process across the Cabinet and across the Albanese government to give defence spending in the Australian national interest the priority it deserves.

We have elevated levels of defence spending because we live in much less certain times where there's much more geopolitical contest and it's in Australia's interests to keep Australians safe, that we maintain and build our deterrent capability and our relationships with our partners. There's very strong agreement across the government and Richard Marles as the Defence Minister is making tough decisions in the Defence Department to make sure that we're allocating defence spending to where it has the most impact.

When it comes to data centres, the government has outlined expectations for data centres to underwrite new renewable power supply, pay for power network infrastructure costs and strengthen the grid by providing demand flexibility. How quickly do you want to make these expectations requirements? Well, we've learnt lessons from what's happened in overseas jurisdictions where data centre development has gone on without an expectation, without a legislative, you know, without a framework to drive that, which builds a competition for scarce electricity and water resources in other countries.

Now, that will not be the Australian approach. It is absolutely in Australia's interest to secure digital infrastructure, data centre tech investment here so we're shaping the technology world that we live in, that we become the indispensable battery for our region. So how soon?

Well, on the electricity questions, the Energy Minister, Chris Bowen, had his first meeting with state energy ministers quite some weeks ago now. They have a work program leading up to July. These expectations will, of course, be operationalised in the state's approval processes, but we are already seen very strong uptake.

For example, Microsoft, whose large data centre development is underpinned by a 300 megawatt renewable energy generation that they are funding and underwriting themselves. We want to see electricity addition here so that it lowers prices and helps build up and modernise – What are the penalties if the data centre companies don't abide by these expectations? What's the penalty?

What's the consequence? Well, what we'll see is it being a requirement for data centres to build these developments. That's how it will work, just the same as every other approval process.

These aren't novel features of how large electricity consumers are required to operate. So, they won't get approval unless they meet these requirements. Well, that is the direction that we're heading in, but they're already meeting the expectations.

It's sending a very clear signal to data centre developers and it's very consistent with the approach that we're taking for large industrial electricity users. The Boyne aluminium smelter is underwriting, with seven and a half billion dollars’ worth of investment in Queensland, new generation and transmission capability to secure 25-year power purchasing agreements.

It uses 10% of Queensland's electricity. These are very similar principles. And what about the situation for water and data centres?

What will be the requirements there? Well, Murray Watt, the Environment Minister, is working with the States on those questions. What we're seeing already is an expectation of high standards on water use, whether it's water recycling, closed water loops or different technologies for cooling systems, [which] is driving technology change and higher standards in data centre development.

So, there is a very strong focus on closed water loops, on water recycling and new technology. If you lift the standard, the industry lifts with you. That's why those expectations are being put out there so early.

Just on a separate issue, because time's running ahead of us. On Monday's Four Corners program, the former Industry Minister, now Labor backbencher, Ed Husic, said the Government blinked in the face of Donald Trump and shelved plans to make AI safer for consumers. Is that a fair assessment of the government's policy changes?

Well, absolutely not. This is a government that has stood up for the Australian interest, whether it's on our approach, which is in our national interest, both in strategic terms and economic terms, on artificial intelligence, quantum and new technology, but also very clearly, a world leading approach. It wasn't a popular approach amongst the big tech companies, but our approach on social media laws is now seen as a world leading approach.

But that's a separate issue. Is Ed Husic right to be speaking out about this? Well, Labor backbenchers, members of Parliament are all absolutely entitled to express their view.

I just say on the Government's behalf, we have demonstrated our commitment and our approach to act hard and fast in the national interest when it's required. On tech regulation, we have done that. In terms of social media, it's a world leading approach that's about keeping our kids safe.

But we haven't done it yet on AI. Well, we have a very strong framework. Australian laws apply now.

Australian regulators, Australian agencies have responsibilities now. We've just introduced the Artificial Intelligence Safety Institute that has a very high level of capability and expertise. Engineers are already under the bonnet of frontier models, making sure that we understand them and their application to Australians and working with our partners overseas to keep Australians safe and make sure that this technology lands here in the national interest. [Inaudible].

Thanks Sally. The Department of Industry, Science and Resources recognises the First Peoples of this Nation and their ongoing cultural and spiritual connections to the lands, waters, seas, skies, and communities. We Acknowledge First Nations Peoples as the Traditional Custodians and Lore Keepers of the oldest living culture and pay respects to their Elders past and present.

We extend that respect to all First Nations Peoples.