Australia risks falling behind as global players like France Canada and Singapore accelerate AI investment. With funding delayed until 2026 or later tomorrow’s budget is a chance to act. Without bold support now Australia may miss out on its share of the $826 billion AI market by 2030.
Tomorrow, March 25, 2025, at 7:30 pm AEDT, Treasurer Jim Chalmers will present the 2025–26 Federal Budget—a do-or-die moment for Australia to stake its claim in the global and regional AI race. The National AI Capability Plan, launched on December 16, 2024, promises a $600 billion GDP boost by 2030, but its rollout drags to late 2025, with funding stalled until 2026/27 or later. After two years of talk about AI’s importance, the government’s next 12 months will be spent planning—not acting—leaving industry and investors waiting while nations like Canada, France, and Singapore power ahead.
Last year’s budget, with its $39.9 million over five years for AI (a mere $8 million annually), was labeled “negligible” by the Australian Information Industry Association (AIIA), offering little beyond voter-friendly rhetoric about a “Future Made in Australia” and scant focus on cutting-edge tech for the next decade’s productivity. With an election looming in April 2025, Australia—a mid-sized power—risks losing ground unless tomorrow delivers urgency and scale.
The global and regional AI race is heating up. The US is investing $500 billion in its Stargate project, Canada’s CAD $125 million since 2017 fuels AI hubs, and France, under Emmanuel Macron, is redefining nation-building with €109 billion in private AI funds, announced at the Paris AI Summit on February 10, 2025. Macron’s plan harnesses France’s nuclear grid for low-carbon AI power, targeting leadership in Europe with deals like €20 billion from Brookfield and up to €50 billion from the UAE’s MGX fund. Closer to home, Singapore, a key trading partner, is solidifying its regional AI edge.
On February 16, 2025, Prime Minister Lawrence Wong unveiled a S$150 million Enterprise Compute Initiative in Budget 2025, pairing businesses with cloud providers for AI tools and adding a S$1 billion Private Credit Growth Fund—moves bolstering cybersecurity and economic competitiveness.
In stark contrast, Australia’s path looks shaky. The past two years under Labor reveal a faltering commitment—the 2024 budget slashed AI support compared to 2023, offering just $101 million over five years for a critical technologies package, including a national challenge program and an Australian Centre for Quantum Growth.
The AI portion—$76 million over the forward estimates—reflects a $30 million cut from prior levels, with Morrison-era programs axed and a year of inertia under Albanese. This makes the 2025 budget crucial, as our delayed National AI Capability Plan jeopardizes a $826 billion global market share by 2030. Industry frustration is palpable—AIIA’s Simon Bush calls the timeline “unacceptable,” signaling a leadership gap we can no longer ignore.
Toby Walsh, Laureate Fellow and Scientia Professor of Artificial Intelligence at the Department of Computer Science and Engineering at UNSW Sydney. warns that lack of government ambitions is a risk
“The biggest risk, in my view, is that Australia misses this opportunity”
National think tanks and lobby groups have also weighed in on this matter - Tech Council of Australia (TCA) insists,
“Australia cannot wait for the plan to be finalised by the end of 2025” (TCA Statement, January 25, 2025).
Last year’s $22.7 billion “Future Made in Australia” package aimed to boost renewables, defense, and small business, with $1.7 billion for a Future Made in Australia Innovation Fund and $288.1 million for Digital ID—yet AI investment remained a whisper. Federal Minister Ed Husic’s Capability Plan, backed by Singapore partnerships and pilot projects, is a start, but it’s stuck in neutral. Industry and investors see a government dragging its feet while rivals like France and Singapore act.
Bush notes any response post-2026 budget “is simply too long to wait in the fast-moving AI landscape,” and Shadow Minister Paul Fletcher pushes for a “tech-friendly government” that invests now. Our strategic neighbor Singapore is racing ahead in AI and cybersecurity—Australia has no more excuses as a middle power to delay. We need big funding by mid-2025, not 2027, and dedicated federal and state AI ministers to build an export market in manufacturing, health tech, and robotics, drawing from past wins like Snowy Hydro and the NBN.
Tomorrow’s budget is make-or-break. Treasurer Jim Chalmers must balance trade pressures, inflation, and defense spending against a feeble AI record—will it signal urgency or leave us lagging? France, an “AI technology challenger” taking on the U.S., and Singapore prove middle powers can lead, not trail. After two years of rhetoric, with Canada, France, and Singapore charging ahead, planning time is up—action is overdue.
How will Australia compete against Commonwealth peers like the UK and Canada, and Asia-Pacific players like Singapore and China? Critical analysis points to a government coasting on past promises; the outlook hinges on tomorrow.
Will Chalmers bring the investment needed to match our competitors, or will Labor’s delays and inaction label this a missed chance for Australia’s tech future—too little, too late—putting productivity and resilience at risk as we approach the 2030s? Isn’t it time to ramp up investment and commit big? Tuesday’s figures will tell.
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