AI with integrity: a legal perspective of the AI Plan for the APS

The AI Plan for the Australian Public Service (AI Plan) is an ambitious initiative to embed artificial intelligence (AI) across the Australian Public Service (APS) by mid-2026. The AI Plan aims to improve service delivery, policy outcomes, and productivity, while maintaining public trust. This article provides a high-level summary of the AI Plan and identifies important legal considerations for Commonwealth agencies implementing the AI Plan.

Summary of the AI Plan

The AI Plan is structured around three pillars:

• Trust: retaining transparency and implementing ethical safeguards to ensure the maintenance of public trust in the use of AI in the APS. This includes providing guidance and communications to the APS regarding AI use in the government, updating the Policy for the responsible use of AI in government and establishing an AI Review Committee to detect systemic risks and strengthen guidance for Commonwealth agencies;
• People: empowering APS staff to use AI responsibly and effectively, including providing adequate AI training and ensuring leadership accountability through Chief AI Officers; and
• Tools: providing APS staff with secure generative AI infrastructure, such as access to GovAI chat and a central register of AI systems and services that meet government requirements. This will also involve developing a new whole-of-government cloud policy.

What are the important legal considerations for the business of government?

Intellectual Property

Justifiably, the Commonwealth is keen to utilise and share intellectual property (IP) across the APS to reduce duplication, lower costs, as well as accelerate knowledge sharing. The AI Plan proposes that GovAI will provide a platform to make IP discoverable and reusable across the APS. However, the Intellectual property principles for Commonwealth entities encourage Commonwealth entities to maintain a flexible approach in considering ownership, management and use of IP and, in the context of ICT contracts, recommend a default position that the supplier owns the IP in any software developed. Consequently, Commonwealth agencies may have agreed to a narrow IP licence in certain circumstances, which may limit the ability to broadly share and use IP across the APS.

Consideration: Commonwealth agencies should:

• ensure that IP that is accessible via the GovAI is shared and used in accordance with the IP licence provided by the supplier under the relevant contractual arrangement; and
• when undertaking procurements or negotiating agreements, consider and implement the appropriate IP licences to ensure that IP can be shared across the APS as contemplated in the AI Plan.

External Suppliers

The AI Plan highlights the need to set clear expectation for external suppliers regarding their use of generative AI in delivering services to Commonwealth agencies. While the AI Plan focuses in the first instance on Management Advisory Services and People Panels, it will likely become common practice for suppliers to be asked by Commonwealth agencies to advise of any planned use of AI in delivering services. The AI Plan indicates additional clauses will be included in the Commonwealth Contracting Suite and Department of Finance's clause bank to clarify accountability and transparency requirements regarding suppliers' use of the AI. However, Commonwealth agencies will need to assess the extent of the transparency required from suppliers for particular services, such as:

• whether suppliers need to seek consent from Commonwealth agencies to use AI technologies in the delivery of services (as currently set out in Digital Transformation Agency's AI model clauses); or
• whether suppliers need to provide transparency at all or particular stages of service delivery. A higher level of supplier reporting and review will have resource implications for both Commonwealth agencies and suppliers and may impact the cost of service delivery.

Consideration: Commonwealth agencies will need to determine the level of supplier transparency regarding the use of AI technologies required to achieve the AI Plan's intent. Noting that regardless of transparency requirements, suppliers should remain fully accountable for their output.

Governance

A key theme for the AI Plan is governance to ensure safe and consistent use of AI across the APS. As with any proposed governance arrangement, the challenge lies in the details. While maintaining public trust is fundamental to the AI Plan, governance arrangements will need to facilitate AI adoption of AI and remain agile and adaptive to changes in the AI landscape. The AI Plan should be read in the context of the Productivity Commission's Interim Report into 'Harnessing data and digital technologies' which recommends a less intrusive approach in relation to AI, privacy and data access, noting that onerous regulations risk undermining productivity gains.

Consideration: Governance arrangements and policies for AI use in the APS should focus on maintaining public trust, but the Commonwealth must also think laterally to minimise any risk to productivity gains achievable through AI.