AI Policy Corner: From proposed mandatory guardrails to the National AI Plan: AI governance in Australia

✍️By Selen Dogan Kosterit

Selen is a PhD Student in Political Science and a Graduate Affiliate at the Governance and Responsible AI Lab (GRAIL), Purdue University.

📌 Editor’s Note: This article is part of our AI Policy Corner series, a collaboration between the Montreal AI Ethics Institute (MAIEI) and the Governance and Responsible AI Lab (GRAIL) at Purdue University. The series provides concise insights into critical AI policy developments from the local to international levels, helping our readers stay informed about the evolving landscape of AI governance. This piece examines AI governance in Australia, tracing its transition from proposed mandatory guardrails in 2024 to the National AI Plan in 2025.

Australia’s National AI Plan

Australia’s National AI Plan was launched by the Australian Government’s Department of Industry, Science and Resources in December 2025. The plan aims to “build an AI-enabled economy that is more competitive, productive and resilient.”

Background

Back in 2023, experts indicated that Australia was falling behind its peers in terms of responding to the opportunities and risks of AI. Since that time, the Australian government has engaged in broad public consultations on safe and responsible AI and published voluntary guidance materials for the industry.

Proposed mandatory guardrails

In September 2024, the government released a document titled “Proposals paper for introducing mandatory guardrails for AI in high-risk settings.” The proposal paper defined high-risk AI and outlined 10 mandatory guardrails for AI developers and deployers, which focused on ensuring the testing, transparency and accountability of high-risk AI systems. It also drafted three regulatory options for implementing the proposed mandatory guardrails, which suggested a domain-specific approach that would amend existing legislation, a framework approach that would introduce framework legislation, or a whole-of-economy approach that would introduce a new AI-specific Act. Overall, this proposal paper signaled that the introduction of mandatory AI governance rules was on the horizon.

The release of the National AI Plan: A shift in approach

Nevertheless, following public consultation that received over 300 responses (with industry feedback emphasizing that the mandatory guardrails could hinder productivity and innovation), the government decided not to proceed with the proposed mandatory guardrails “at this time”, and released the National AI Plan in December 2025.

The Plan is built on the following three goals:

Capturing the opportunity by building digital and physical infrastructure, supporting local AI capability, and attracting investment. The government has already established a National AI Center and is actively developing data center principles, cooperating with leading AI companies, and promoting an AI Accelerator initiative.
Spreading the benefits by expanding AI adoption, supporting and training Australians, and improving public services. This goal aims to ensure that all Australians are able to benefit equitably from AI regardless of background.
Keeping Australians safe by mitigating harms, promoting responsible practices, and collaborating on global norms. To achieve this goal, Australia is creating an AI Safety Institute, which will help the government monitor and respond to AI capabilities, risks, and harms.

The National AI Plan essentially shelves the proposed mandatory guardrails from 2024. Instead of enforceable AI-specific obligations, the Plan suggests relying on existing technology-neutral legal frameworks and voluntary guidance documents.

Some actors in Australia supported the Plan due to its focus on economic competitiveness and growth. For instance, the Business Council of Australia expressed that the Plan is an important step forward “to seize the once-in-a-generation economic opportunity of AI.” Furthermore, the Productivity Commission welcomed the decision to pivot away from the previously proposed mandatory guardrails, arguing that such requirements could have stifled innovation.

By contrast, several experts voiced criticism of the Plan, saying that it lacks a clear enforcement mechanism and prioritizes economic opportunity over safety concerns. Dr. Rebecca Johnson, an AI evaluation and governance expert, expressed that: “Our people, our society, and our democracy matter more than short-term economic gains. Safety needs to lead, not follow.”

Looking Ahead

Australia will likely adopt a flexible approach to AI governance for the time being, including amending existing laws and establishing new guidance materials rather than introducing AI-specific legislation. However, it’s important to note that the National AI Plan highlights the government’s willingness to revise the plan to capture emerging opportunities and address new risks as the technology develops.

Further Readings: