Australia has a history of letting global corporations extract value from our resources while leaving the public to carry the costs. With artificial intelligence, that could be a disaster. Kim Wingerei reports.
The gas export boom was sold as a national windfall, yet the reality has been starkly different. Foreign companies structured profits offshore, paid little or no company tax, and are leaving Australians with the environmental damage. No sovereign wealth fund was built, no lasting dividend secured, and households were left exposed to price shocks.
That experience should serve as a warning, because with artificial intelligence, the risks could be even greater.
Gas – at least – created some jobs and government revenue, meagre ($) though the Petroleum Resources Rent Tax has been. AI promises “productivity gains,” but in practice could hollow out the labour market, destabilise housing, and erode the tax base.
The resource being extracted this time is not gas – it is human labour and knowledge itself. And sure, specific applications of AI could advance the boundaries of science and medicine and deliver universal benefits.
Productivity at any cost?
However, when politicians and executives talk about productivity, they rarely seem to ask the harder question: productivity at what cost?
Productivity divorced from shared prosperity is a mirage.
If AI reduces labour demand and displaces professionals – as many predict – the supposed gains risk collapsing under their own weight. Who will buy the goods and services? What will that do to personal and company tax receipts? Who will pay the mortgages?
Who will fund the hospitals and schools?
The government’s own AI plan acknowledges three national interest pillars: capturing economic opportunity, spreading the benefits, and ensuring safety. Industry Minister Tim Ayres emphasised these pillars when launching the National AI Plan in December 2025, speaking about building skills and ensuring unions play a role in shaping adoption.
On paper, this is a balanced framework. Yet in public rhetoric from government Ministers, the emphasis has been overwhelmingly on productivity – boosting growth, embedding AI into industries, and instilling skills in workers to use AI more efficiently, not retraining those whose jobs are displaced.
Treasurer Jim Chalmers has put productivity “at the very core” of the Budget, with AI as the centrepiece, and last year he described AI as a “game changer” for productivity and resilience.
What is missing is a frank discussion of the downsides: who captures the gains, how displaced workers are supported, and how public value is secured. Without mechanisms for sovereign wealth or rent capture – such as meaningful PRRT revenues in the gas sector – Australia risks repeating the gas mistake in digital form.
The education challenge
For decades, young Australians were told that a university degree was the pathway to secure employment. That promise is in danger of breaking down. AI systems now draft reports, analyse data, schedule workflows, and even provide legal and medical summaries. As AI continues to improve, entry‑level graduate roles – the traditional stepping stone to professional careers – could evaporate.
Families could be equally exposed. Mid‑career professionals with mortgages, car loans, and school fees could not survive on JobSeeker. At $55 a day, it is designed for subsistence, not for households with fixed financial commitments. If redundancies were to occur at scale, the welfare system could be overwhelmed and forced sales in the housing market could follow.
Australia’s housing market is highly leveraged, sustained by the incomes of professionals and managers. If a proportion of those roles were lost to AI, mortgage stress could rise, demand for mid‑upper tier housing could evaporate, and prices might fall – first near the top, then cascading downward. These are potential futures, not certainties, but they are plausible enough to warrant serious consideration.
The fiscal consequences could also be severe. Automation may reduce income tax, payroll tax, and GST receipts, while welfare, housing assistance, and retraining costs rise. Governments would face an impossible bind of unpopular or unsustainable options: raise taxes on capital, cut services, or borrow more.
If displaced workers spend less, consumption could fall, small businesses could fail, and unemployment could spread beyond the initial AI‑exposed sectors. The economy could contract into a recessionary spiral. This is the paradox of productivity pursued without regard for distributional consequences:
the very gains that are trumpeted as progress may become the seeds of instability.
Australia squandered its gas boom by failing to capture sovereign wealth. Norway used oil revenues to build a sovereign wealth fund worth over $US2 trillion. Australia let gas revenues slip away, leaving households exposed to price shocks and governments scrambling for revenue.
AI economic risks
With AI, the risks may be greater still. There are no royalties, no sovereign wealth fund, no taxation framework for global AI firms, and no mechanism to capture value from productivity rents. We are at risk of sleepwalking into another branch‑office economy, this time built on data centres and algorithms rather than gas fields.
The lesson is clear. Productivity is not an end in itself. It is only meaningful if the gains are shared, the costs managed, and the social fabric preserved. Without carefully considered government policies, the future could be one of collapsing housing markets, fiscal unsustainability, social cohesion breakdown, and political instability.
The Senate Inquiry into AI and data centres announced on 13 May is therefore critical. It must be informed by systems thinking about potential futures, not just narrow calculations of productivity.
Only by learning from the mistakes of the gas boom can Australia avoid repeating them in the AI era.
Productivity without sovereignty is just exploitation, and this time the costs may be borne not only by our environment, but by our families, our children, and the very stability of our society.
The author of this article wished to remain anonymous, but is a real person known to MWM, and not AI.
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Kim Wingerei is a businessman turned writer and commentator. He is passionate about free speech, human rights, democracy and the politics of change. Originally from Norway, Kim has lived in Australia for 30 years. Author of ‘Why Democracy is Broken – A Blueprint for Change’.