The path ahead for AI regulation in Australia remains highly uncertain. Amid an evolving range of international approaches, the Australian Government is yet to provide a clear direction for AI regulation.

In this report from e61 and the UTS Human Technology Institute, we highlight the importance of regulatory certainty as an enabler of AI-driven productivity. We identify that:

AI’s productivity potential is real—but contingent on investment. We outline five principal channels for such gains: labour-improving tools, automation, firm-level reorganisation, sectoral reallocation, and knowledge creation.

The payoff from AI will depend on regulatory quality and stability. The scale and complexity of the investments AI requires make adoption highly sensitive to regulatory uncertainty.

Not all regulatory approaches support productivity equally. There are distinct trade-offs between the three regulatory models that are emerging globally:

• Deliberately permissive approach to regulation;
• Prescriptive approach focused on AI-specific regulation; and
• Pragmatic approach that prefers technology-neutral regulation.

A pragmatic, technology-neutral approach to regulation provides more durable regulatory certainty. Credible signals, a clear institutional posture, and the capacity to evolve enable firms and workers to invest confidently under predictable governance.