Policy focus: Economy, Productivity and Housing reform and the role of AI

There has been a lot of information in the press about the recent Economic Reform Roundtables. The ALGA policy team have summarised some of the key issues to help get you up to speed on what this means for local government.

At the Treasurer’s Economic Reform Roundtable (August 2025), a key outcome is action on removing red tape and delays in approvals holding up the construction of new homes.

According to Housing Minister Clare O’ Neil, there are two areas that can be acted on immediately following the roundtable:

1. Pause and streamline the National Construction Code.
2. Fast track assessment on more than 26,000 homes currently under the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act) consideration and speed up assessment of new applications.

The Albanese Government will also take further action on reform ideas raised during the Economic Reform Roundtable, including to work with states and territories to accelerate delivery of planning, zoning, approvals and investment in enabling infrastructure.

A national Artificial Intelligence (AI) plan for environmental assessments could involve using AI to:

• Provide faster environmental analysis
• Identify potential risks to biodiversity and
• Flag compliance issues early in the planning process.

For local government, the adoption of AI, particularly as proposed for the EPBC Act following the roundtable, could lead to:

1. Faster Development Assessments: Councils could benefit from reduced delays in projects that require federal environmental clearance.
2. Decision-Making Support: Assuming that appropriate and comprehensive environmental data was consistently collected and maintained, AI tools could support local planners by providing data-driven insights into environmental risks and mitigation strategies.
3. More comprehensive national environment data: AI tools could be used to integrate information from environmental impact assessments into national data holdings, improving the comprehensiveness of species and ecosystems data and support analysis of trends in species and ecosystem health, and where interventions are needed to protect environmental values.
4. Capacity Building: Local governments may need to upskill staff or partner with tech providers to integrate AI tools into their planning workflows.

The success of this AI initiative depends on data sharing between federal, state, and local government, the standardisation of environmental data collection to feed into national AI systems, and robust governance so that AI tools are complimentary to human oversight of environmental protection.

It is also critical that use of AI tools is guided by clear, functional environmental legislation. Reforms to the EPBC Act to make national standards, assessments, and approvals more streamlined and effective is the foundation that new tools can support.

https://ministers.treasury.gov.au/ministers/clare-oneil-2025/media-releases/action-red-tape-and-approvals-build-more-homes-more

What are councils already doing?

NSW

Local government is already exploring AI solutions. As an example, the NSW Government created an AI Solutions Panel providing a resource of products that councils can procure and integrate in their development assessment workflows. This initiative provided more than $2.7 million to 16 NSW Councils to trial AI in their planning systems via the Early Adopter Grant Program.

https://www.planning.nsw.gov.au/assess-and-regulate/development-assessment/artificial-intelligence-in-nsw-planning#-ai-solutions-panel-

Several NSW councils are actively piloting DAISY (Development Application Intelligence System), offering guidance and general planning advice to residents, funded through the grant program.

https://www.cumberland.nsw.gov.au/build/daisy

Victoria

According to the Municipal Association of Victoria, and work done through MAVLab, 70 per cent of Victorian councils are exploring or already using AI in statutory planning, including document classification and validation; AI assisted customer service and planning decision support tools.

The MAVLab report highlights the risk of fragmented systems across Councils and the need for shared infrastructure and governance frameworks.

https://www.mav.asn.au/__data/assets/pdf_file/0009/42993/MAVlab-AI-Planning-Report-Jul-2025.pdf

Other applications for AI in Councils include:

• Urban Planning:
  • AI-powered Geographic Information System (GIS) for land-use and zoning
  • Predictive modelling for traffic, population, and environmental risks
• Customer Service:
  • AI chatbots and virtual assistants for resident queries
  • Sentiment analysis of community feedback
• Environmental Monitoring:
  • AI sensors for air/water quality
  • Disaster prediction and mitigation (e.g. bushfires, floods)
• Waste Management:
  • Smart bins and route optimization
  • AI-powered sorting systems

Underpinning this, the UNSW are developing a National Research and Ethics Framework for trustworthy AI in developing assessment through an ARC Discovery Project (2025-2027) grant. The project investigates the legal, technical, and ethical requirements for the trustworthy use of AI in urban development assessment.

https://cityfutures.ada.unsw.edu.au/research/projects/ai-cities-development-assessment-arc-discovery/

ALGA is conducting a series of free webinars in the coming months that focus on the implementation of AI for local government.

A housing event is also in the works – with details to be announced soon.  See: https://alga-staging.giraffe.studio/other-events/

Is your council using AI? If you’d like to share how AI is helping your council/community, please contact alga@alga.asn.au.