Data Centre Boom Puts Power and Water Under Scrutiny

Deputy Prime Minister Richard Marles said data centres belong far from suburbs and that companies should supply their own power and water. Their rapid expansion has drawn scrutiny over pressure on electricity, inflation and local communities.

“Building them in suburbs is the wrong place,” Marles told ABC News Breakfast. Companies should bring “their own power and water,” he said, so they can “contribute to the power grid, not take power out of the power grid.” His proposal puts the burden of supplying resources on the companies building the facilities, rather than on the electricity grid they might otherwise draw from.

Who Pays for the Expansion

Assistant Minister Andrew Leigh said the government wanted Australians to benefit from data centres “located in their communities.” That’s a promise of shared benefit, while Marles’s comments make clear that facility locations and their demand for power and water have become points of contention.

Deloitte Access Economics data released that week showed data-centre construction investment had risen 36 per cent over the past year. The data counted 37 projects around the country worth $141 billion. Reserve Bank governor Michele Bullock cited the construction boom as a factor in inflation, placing the industry’s investment alongside broader pressure on prices.

Assistant minister for technology and the digital economy Andrew Charlton argued that stopping productive infrastructure shouldn’t be treated as the answer to inflation. Speaking to superannuation-sector members at Trades Hall in Melbourne the previous day, he said: “Productivity is not a distraction from the inflation challenge. It is central to the solution.” Charlton acknowledged that debate about inflationary pressure from AI investment was legitimate. He said officials must manage short-term pressures without sacrificing longer-term productivity gains.

Anthony Albanese had mapped out a national framework for artificial-intelligence standards earlier in the year to address the technology’s impacts. The coverage didn’t describe any community-led response to data-centre construction or a direct-action campaign. Instead, government officials discussed standards, proposed expectations for companies and how much infrastructure to build.

Elections, Markets and the Alliance

The ABC News Top Stories program reported that Democrats seized control of the US Congress in Tuesday’s midterm elections, calling the result a “stunning” win. It also said the data-centre industry took a major hit on the stock market, drawing attention from Australian leaders. The political change in the United States didn’t alter Marles’s stated approach to the alliance: Australia would continue working with the United States to maintain and uphold it.

“We live in a world today where we face a very challenging strategic landscape and in that context our alliance with the United States is critically important. So, it's our job to manage it,” Marles said. He also said the government’s priority remained cost of living and that it was focused on managing its budget prudently. Leigh said Australia’s relationships with allies remained strong regardless of election results, and that his party took lessons from elections while maintaining those relationships.

The electoral shift and stock-market reaction sit beside the same unresolved questions: who supplies the power and water, where projects are built, and who receives their benefits. Marles’s answer was that companies should bring their own resources. Charlton’s was that investment should proceed without sacrificing productivity. The government has also set out an AI standards framework, but the coverage reported no change to the alliance or any electoral solution to those questions.