The 2024 Federal Budget makes modest investments in artificial intelligence of $39.9 million over five years, largely through the Department of Industry, Science and Resources (DISR). The funding is a welcome increase from last year. DISR’s budget papers indicate it will spend about $17 million in the next year, with close to $23 million allocated to the following two years.

The Department of Health and Aged Care (DoHAC) receives $1.5 million in Budget 2024-25. This will be used to clarify and strengthen existing regulations in the healthcare sector. As part of the Government’s Supporting Safe and Responsible AI measure, DoHAC will:

  • Conduct a targeted review of priority legislation to identify gaps and opportunities for clarification in existing laws.
  • Partner with the Australian Commission on Safety and Quality in Healthcare to develop AI clinical guidelines and resources.
  • Establish an evidence base for reform with options that balance relevant social and economic interests, and test potential AI regulatory responses with stakeholders and through a public consultation.

Despite only a small portion of Budget funds going to healthcare, the case for investment is strong. The Productivity Commission’s recent report on the potential for digital health (including AI) makes a compelling case for more investment. The report identifies that better integrating digital technology and AI into healthcare could save Australia more than $5 billion a year and ease pressures on the healthcare system, saving up to 30% of each health worker’s time.

Late in 2023 the Australian Alliance for AI in Healthcare (AAAiH) released its National Policy Roadmap for Healthcare AI, recognising that there were many unique or specialised needs within this sector. For example, healthcare regulation for technologies is relatively mature compared to many other industries, and health is well positioned to lead in developing the overall regulatory space for AI, as well as having a pressing need to do so to ensure patient safety.

The bulk of the Budget’s funding is allocated to more broadly building the government’s capability to take a leadership role in national policy for artificial intelligence, rather than being directly targeted to support industry or R&D:

  • A major allocation of $21.6 million over five years is devoted to bringing the National AI Centre (NAIC) into DISR, leaving its current home in Data61/CSIRO. The funding is designed to position the NAIC as “the government’s flagship organisation for engaging with industry” whilst also establishing an AI Advisory Body.
  • $15.7 million over two years is allocated to support “industry analytical capability and coordination of AI policy development, regulation and engagement activities across government, including to review and strengthen existing regulations in the areas of health care, consumer and copyright law.”
  • $2.6 million over three years is assigned to “respond to and mitigate against national security risks related to AI.”

The budget provides some more detail on this expenditure, but much remains to be revealed as specific programs are announced:

  • Recognising that dealing with AI is a whole of government task, DISR will coordinate work across AI policy development, programs and outreach “across government, supported by strong industry and community engagement and expert advice”. $8.5 million over two years is earmarked to “uplift” DISR’s capability to lead and coordinate the government’s Safe and Responsible AI agenda from 2024-25.
  • Some funding is allocated to the development of appropriate guardrails for the deployment of AI across all sectors. “The government is developing a pathway to mandate guardrails for the design, development, and deployment of AI in high-risk settings, strengthen existing laws and regulation relating to AI in priority areas, and develop an AI safety standard.” Healthcare is identified as one high-risk sector that will be a focus for this activity.

Apart from these direct investments in AI, there are more general measures that should see resources support artificial intelligence activities in Australia, although again the details are unlikely to be clear until specific programs are announced:

  • In the weeks before the budget DISR released its Medical Science Co-investment plan which does not seem to have garnered much attention. This may be something to watch, as it outlines investment opportunities for government and industry to leverage Australia’s strengths and target areas with high economic potential. Digital health is the very first investment opportunity identified in the plan.
  • The budget papers make clear that “Investing in Australia’s digital and technology capabilities, such as quantum, artificial intelligence and robotics … will underpin a Future Made in Australia”. The stated goal of the Future Made in Australia funding will be to “accelerate the safe and responsible adoption of technologies and create high-value jobs that will help retain talent in Australia and transform our economy.” We may well see AI supported through Future Made in Australia programs.
  • The Digital Transformation Agency will develop and implement policies to position government as an exemplar in the use of AI, with costs to be met from within existing resources of the Department of Home Affairs and DISR. This apparently includes a large-scale trial of Microsoft Copilot for M365 among federal agencies.

Some areas where the budget is silent may soon be revealed. The outcomes of the competitive process to create several national AI Adopt Centres to support SMEs in specific industries was expected last week. This program is a revision of the previous National AI Capability Centres program, which was abandoned at the last moment in last year’s budget as a cost saving exercise.

With so much yet to be revealed, and presumably much work ahead to define and refine specific AI programs, the AAAiH encourages industry and major stakeholders in health, to actively engage with government to ensure the right policy settings are put in place in such a fast moving and complex space. The AAAiH itself remains ready and willing to engage in this process with all jurisdictions, Federal and State. The AAAiH Roadmap provides a clear template for action, and the AAAiH looks forward to productive engagement that will see even greater and more targeted investment in future years.