Premiers and chief ministers are meeting Prime Minister Anthony Albanese in Sydney today as the federal government’s plan to impose national standards for data centres becomes the biggest source of disagreement at national cabinet. The proposed rules would require developers to bring their own renewable energy and set parameters around water usage and community contributions. The fight is over who gets to set the terms, and who has to live with them.
Who Gets to Decide
Queensland and the Northern Territory are opposing the renewables-focused standards. Queensland Deputy Premier Jarrod Bleijie said his government would not be "forced" into a particular energy pathway by the Commonwealth. "We're our own state and we're pushing back," he said. "We believe that there are potential investment opportunities in Queensland for data centres, but it's going to be all forms of electricity and we're not going to force renewable energy on regional communities."
Bleijie also said Chris Bowen was a "fool" for threatening to override states and suggested the federal minister "doesn't understand the constitution". He said, "Chris Bowen should be trying to work with state and territories government, not be a big brother bully as he's trying to do in this case." Asked whether Queensland would challenge any Commonwealth attempt to override the state, Bleijie said he did not believe it would be necessary. "No-one's going to have to challenge anything because the type of investment won't come because businesses will not invest it if there's only one form of electricity on the table," he said.
Northern Territory Chief Minister Lia Finocchiaro said she opposed national AI data centre standards, arguing states and territories should be free to make laws that "suit" the views of their community. "We don't need the federal government coming in heavy-handed and trying to dictate to states and territories, how they should be developing data centres or not, and what energy mix they should be using," she told ABC Radio National.
What the Top Wants
The Australian Energy Market Operator has estimated data centres would grow from currently consuming 3 per cent of the nation's electricity supply to 13 per cent in a decade. Energy and Climate Change Minister Chris Bowen said yesterday that if the government got the policy settings "right", he was confident Australia could handle the electricity demands of data centres. "That's why we're requiring new data centres to bring their own renewable energy, backed by gas firming," he said.
Bowen has maintained the Commonwealth is prepared to legislate over the top of states, if necessary, though he has not outlined specifics. "The constitution is pretty clear about, if there's a dispute between Commonwealth legislation and state legislation, which legislation prevails," he said. He also rubbished the suggestion of data centres running on nuclear small modular reactors, which he described as the "most expensive form of energy and the longest to deploy".
Industry Minister Tim Ayres said it was "absolutely crucial" to ensure Australia doesn't have a race to the bottom on artificial intelligence standards. Speaking to ABC Radio National Breakfast ahead of today's meeting of state and territory leaders in Sydney, he said Australia risks missing a "big opportunity". "It's absolutely essential as we rebuild and modernize our electricity system, that Australia doesn't go backwards in terms of our electricity system, but that is a system that is based on solar and wind, backed by gas and backed by storage," Ayres said.
Who Pays for the System
Independent senator David Pocock said data centres could be an opportunity for Australia if the country gets the settings right, but asked: "What is the long-term benefit? Where is the data centre tax or the return to the Australian people?" That question hangs over the whole arrangement. The public is told to accept the buildout, while the benefits remain something to be negotiated above their heads.
Liberal MP Andrew Wallace said Australia must get on board because it has great potential for Australia. "We have to seize it, but we've got to get the balance right. We've got to look at the community expectations, planning problems that we would have and energy and workforce," he said. The language is tidy. The machinery is not.
The leaders meeting will also consider domestic violence, bird flu, fuel security and gun laws, but GST is not on the agenda. Agreement around progressing the next five-year national plan to end violence against women and children is likely, and Mr Albanese is facing calls from the federal crossbench to use the meeting to progress more reforms to help tackle the scourge. The meeting is packed with the usual managed crisis politics: plans, briefings, reforms, and promises of coordination from the same institutions that keep centralizing power.
The leaders are not due to discuss federal Labor's plan to standardise the private health rebate for all ages, effectively reducing the benefit for older Australians, which the South Australian government this week became the latest jurisdiction to oppose. Premiers and chief ministers will get a briefing from Australia's chief veterinary officer on the outbreak of H5N1 bird flu, which has now been detected in all six states. Energy and Climate Change Minister Chris Bowen will provide an update on the latest moves to ensure Australia's fuel security amid ongoing disruptions caused by the US war with Iran. Mr Albanese's attempt to establish a national gun buyback in the wake of the Bondi terror attack will be discussed at the meeting though developments are unlikely. Only NSW and the ACT have signed up to the proposal so far, while Western Australia recently completed its own voluntary program.
Cooperation is far more likely in the ongoing response to the deadly outbreak of H5N1 bird flu, which has reached all states although not the ACT and NT, and recently been detected in a mammal. When the crisis is immediate and the damage is already spreading, the institutions can move. When the question is who controls the infrastructure, who profits, and who bears the cost, the cabinet room turns into a brawl over authority.