COWGILL, Mr Matt, First Assistant Secretary and Chief Economist, Department of Employment and Workplace Relations HARB, Mr Diab, First Assistant Secretary, Department of Employment and Workplace Relations HUMPHRYS, Ms Jenny, Assistant Secretary and Chief Data Officer, Department of Employment and Workplace Relations MAGRO, Ms Emily, Acting Assistant Secretary, Department of Employment and Workplace Relations Committee met at 0 8 : 12 CHAIR ( Ms Briskey ): I declare open this hearing of the Joint Select Committee on Artificial Intelligence. I begin by acknowledging the traditional custodians of the land on which we meet today and pay my respects to elders past and present. I extend that respect to any Aboriginal and Torres Strait Islander people here today. The committee will be conducting today's hearing via videoconference and in person. I remind all witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and, as such, that may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence. Witnesses have the right to request to be heard in camera. The Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given responsible opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution does not preclude questions asking for explanations of policies or factual questions about when and how policies are adopted. If a witness objects to answering a question, they should state the ground upon which the objection is made and the committee will determine whether it will insist on an answer, having regard to the ground on which it is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Commonwealth officers appearing today are also reminded of the Senate order specifying the process by which a claim of public interest immunity should be raised. A copy of the order is available from the secretariat. The extract read as follows— Public interest immunity claims That the Senate— (a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate; (b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate; (c) orders that the following operate as an order of continuing effect: (1) If: (a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and (b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document. (2) If, after receiving the officer's statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister. (3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document. (4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence. (5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate. (6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate. (7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4). (8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3). (d) requires the Procedure Committee to review the operation of this order and report to the Senate by 20 August 2009. (13 May 2009 J.1941) (Extract, Senate Standing Orders) CHAIR: I remind senators and members of their obligations under the Behaviour Code for Australian Parliamentarians to treat witnesses with dignity, courtesy, fairness and respect. Welcome, representatives of the Department of Employment and Workplace Relations. I understand that information on parliamentary privilege and the protection of witnesses giving evidence to committees has been provided to you. I now invite you to make a short opening statement, and, at the conclusion of your remarks, I'll invite members of the committee to ask some questions. Mr Harb : Firstly, thanks for having us here. I appreciate the opportunity to help however we can. The department's put forward a submission. I'm happy to talk through any elements of that or other matters relevant to our portfolios. CHAIR: Great. We'll head straight in. In your submission it notes that AI's productivity benefits will depend on how it's adopted, not just whether it is adopted. Can you explain what successful adoption might look like in practice. Mr Harb : It's probably worth, firstly, highlighting that the focus of this portfolio is particular elements of the National AI Plan. In particular, this portfolio is focused on enabling an AI-ready workforce, navigating AI and worker transitions and fostering responsible workplace adoption. As part of the responsibility, the minister established and chairs the AI Employment and Workplaces Forum. That is a tripartite forum that brings together employee groups, unions and government agencies. The focus of that forum is really to identify practical ways that AI can be adopted in workplaces that supports productivity, improves workplace outcomes and maintains trust and confidence in how the technology is used. That forum is very much focused on the types of things that you've outlined there, and it has agreed to look at five key themes. One of those themes is productivity. For completeness, the other ones are trust, capability, transparency and safety. It is within those themes that that forum is looking at what best practice adoption looks like in workplaces. One of the key priority areas for the forum is the development of best practice guidance, and that is about workplaces—how workplaces can adopt AI that achieves benefits but also supports the other elements of the National AI Plan around safety. CHAIR: Further on that, you also mentioned, just a moment ago, that layers of capability are needed to benefit from AI, in terms of management through to technical expertise. Can you take the committee through each of these and why they matter. Mr Harb : Absolutely. Mr Cowgill : Our submission highlights the fact that successful adoption relies on complementary investments in management and workforce capability, skills development, organisational change and redesigning business processes. I think what we're getting at there is the idea that the benefits of AI—or, in fact, any other emerging technology—can best be realised when production processes are changed to adapt to the new technology, so it's not just dropped into existing processes, and also when workers and management are given opportunities to train and to work together to shape what those new production processes look like. That's what Mr Harb has alluded to through the forum. The aim there is to work in a tripartite way to identify those potential improvements to processes. CHAIR: You mentioned talking about looking at best practice. Can you take us through any examples you're seeing at the moment, highlighting what is working well at the moment. Mr Harb : It's probably worth saying that at the moment we are holding a series of roundtables with stakeholder groups. That includes unions, employers, academics and small and medium enterprises, as well as some employers that have so far had experience with AI adoption—some of the largest employers in Australia. Certainly some of the key themes that come up in good practice are around how organisations are transparent in AI adoption and how engagement with the workplace across both workers and the organisation contributes to the way AI is adopted. Going to what Mr Cowgill has outlined, to see successful productivity benefits, that engagement between the workers and the employer is crucial to achieving successful outcomes. Those are probably the key things that we've heard so far, but the roundtables are— CHAIR: Ongoing. Mr Harb : occurring at the moment. We look forward to discussing that further and really trying to understand real workplace examples of good practice but also where things haven't worked out and what organisations and businesses have done to fix that and improve. CHAIR: Brilliant. I'll throw to you, Deputy Chair. Senator DUNIAM: With this best practice adoption guidance, when do we expect to see guidance being provided? Mr Harb : We're working through the roundtables at the moment. Senator DUNIAM: What period of time are they occurring over? Mr Harb : Over this month they're occurring. This work is under the AI Employment and Workplaces Forum. We expect that the conversation will return to the forum following the roundtables. It'll be up to the forum to discuss where to from there and how that work progresses as well. It really it that tripartite development that is the key to coming up with real best practice guidelines that actually reflect the realities of workplaces. Senator DUNIAM: The reason I ask that is obviously this is an urgent issue. It's an emerging one. This committee has a very short period of time to do its work and make recommendations to government about how we deal with something that's coming whether we like it or not. We're set to report on 30 November. Do you expect the work of the roundtables et cetera to be done by that point in time? Mr Harb : That's probably a question for the minister, I suspect. Senator DUNIAM: Do you think you could take it on notice? Mr Harb : I'm happy to take it on notice. Senator DUNIAM: What form will that guidance come in? Mr Harb : Again, it's probably something we're working through at the moment. Senator DUNIAM: Is it manuals? Is it forums? Mr Harb : Guidance in a document or on a website. That's probably where we're heading at this point. Senator DUNIAM: Not sure of the format and not 100 per cent sure yet of the timing on this. Mr Harb : The format is a document. Senator DUNIAM: A document. But is it online? Is it handbooks? Mr Harb : Online, yes. Senator DUNIAM: Will there be training sessions for employers and relevant entities? Mr Harb : That's not on the plan at this stage. Senator DUNIAM: But it could be. Mr Harb : There's a role there that employers and worker organisations play in supporting workplaces through these types of matters. So we'd expect some role to play there are well. Senator DUNIAM: On page 5 of your submission, the sixth paragraph down says: Importantly, the productivity benefits of AI will depend on not only whether AI is adopted, but how it is adopted. Is whether it is a adopted a question at all, given the work you're doing, the work of this committee and the reality we face? Mr Cowgill : That's a decision for individual businesses as to whether they choose to adopt AI or any other technology. It may well be that competitive pressures lead to widespread adoption if AI is highly capable and does lead to productivity improvements. Certainly it's a matter for each individual business to decide what technologies to adopt. Senator DUNIAM: In terms of the work that you're doing now, have you gone to look at other jurisdictions that are more advanced in dealing with this emerging technology than us? Obviously, you're having roundtables, which gives you a domestic insight into what's happening, good and bad. What have you done with other jurisdictions that have already gone and invented the wheel? Mr Cowgill : One thing I can share is that, in the course of the department's monitoring of the impact of AI on employment in Australia, we've certainly stayed abreast of the academic literature and other reports and studies overseas that have examined the effect of AI on employment in comparable advanced economies. That's more on the monitoring side rather than policy responses, per se, but we're certainly staying across that literature as it evolves. Senator DUNIAM: That's helpful to know in terms of staying across the literature. Have you made contact with your counterparts in the United States, for example? Mr Harb : We haven't directly, but we do have avenues in which we're engaging with what others are doing internationally, and we receive information on that from those across government that do engage with those organisations. We have looked at what others are doing in terms of their international approaches, whether that's the EU, the UK or Canada. The International Labour Organization is part of our workplace relations portfolio, and, certainly, the conversation on AI adoption is happening in the context of that organisation. We are a member of the ILO, as it's known, and are certainly working through the ILO in terms of what they're seeing across the world and how that can inform our approach as well. To add to that, it is important that any guidance and best practice is grounded in the Australian experience and what our unique experience looks like. While we are looking at those things, we are really keen to understand what's happening. Senator DUNIAM: Yes. I don't dismiss the need to have a handle on the jurisdiction for which we're responsible. You're having those conversations. Is anything being taken from those conversations you're having with counterpart agencies in other countries or similar and put into what work you're doing for the guidance that you're preparing for the participants in our economy? Mr Harb : We're definitely learning from it. I couldn't specifically say, 'This line comes from this place,' but, certainly, we're taking in what others are doing and using that to inform our thinking. Again, it's a tripartite process. Really, our thinking goes to inform our conversation with our stakeholders and bring together how others see it as well. It's not a single or one-way street. It's really a partnership approach to developing these guidelines. CHAIR: I will throw to Senator Pocock. Have you got any questions? Senator DAVID POCOCK: Thanks for your time here this morning. What work is the department or Jobs and Skills Australia doing on monitoring AI-related job losses here in Australia? Mr Cowgill : I can speak to that. We released a report, AI and employment in Australia, in early July. The report used data up to that time to assess the effect that we think AI may be having on jobs in Australia. We found that there is no evidence so far of broad labour market disruption arising from AI. The labour market does remain quite resilient—including, importantly, the market for young people and new tertiary graduates as well. That provided some reassurance, but that, of course, doesn't tell us about what may happen in the future. For that reason, the department intends to use the framework set out in that report as the basis for ongoing monitoring. It's important to note as well our work builds on earlier work by our colleagues at Jobs and Skills Australia, who released their capacity study of generative AI last year. As part of that study, they assessed how exposed each occupation in Australia is to either automation or augmentation by generative AI tools, and we were able to use those exposure scores in the course of our monitoring work. Senator DAVID POCOCK: In terms of monitoring, how are you collecting data from employers? One of the things I've seen is a number of big employers offshoring jobs recently. One of my concerns is it's obviously easier to automate offshore jobs than Australian jobs. Are you looking at that sort of thing as a sort of two-step process—we offshore, then we automate? How are you actually collecting data? Mr Cowgill : We're not doing any primary data collection; we are relying on ABS data—in the first instance, the labour force survey. Then we are intending, in future monitoring exercises, to also use the ATO Single Touch Payroll data, to which we have access through the ABS. That tells us, if you like, the net change in employment in different occupations. It doesn't tell us about the gross changes. If a firm were to offshore some number of software developers, just as an example, and then some other firm adds an equal number of software developers, all we see in the data is the net change, which in that stylised example would be zero. So the data that we have doesn't tell us about individual companies' decisions to, say, offshore or in fact reduce employment for any other reason. We're focused on that economy-wide and occupation-wide net change in employment. Senator DAVID POCOCK: Is that a problem and a vulnerability given the exponential nature of this technology? It may seem like nothing is happening, and then you hit this tipping point where a whole bunch of jobs can be automated, and we're not prepared. Mr Cowgill : There is certainly a wide range of plausible future scenarios for AI and employment, and that's why we are doing this ongoing monitoring exercise. One scenario which is consistent with what you just described is what economists call a productivity J-curve. This would mean that, in the short term, employers increase employment, particularly in AI exposed occupations, as they are deploying AI. You might hire a range of software developers to help you integrate AI into your processes, but that's for a short term. So in the short term, employment goes up and productivity goes down, and over the medium term some of those people are no longer needed, and employment would go down and productivity would go up. That is one of very many plausible future scenarios. I don't think it is by any means the only plausible future scenario, but that's why we're monitoring in an ongoing way. Senator DAVID POCOCK: That's one of my big concerns. A lot of researchers are warning us that, at the point where you can automate, one company does that, and every other company then has to follow suit very quickly to keep up because of the potential productivity gains and reduction in costs. What investments are you making in retraining workers into AI resilient jobs and upskilling them on the use of AI? Ms Magro : We have a range of skills mechanisms already in place to look at skilling of individuals. The National Skills Agreement is the key intergovernmental mechanism for stewardship and investment across Australia's vocational education and training system. As digital and technology capabilities are focused under the National Skills Agreement, four TAFE centres of excellence have been approved under the National Skills Agreement with a focus on digital skills, cybersecurity and AI technology. The Commonwealth has committed $15 million, matched by Victoria, to establish the National Digital, AI, and Technology Skills Centre of Excellence; $5.5 million, matched by New South Wales, to establish the New South Wales Institute of Applied Technology Digital National Centre of Excellence; $14.07 million, matched by South Australia, to establish the TAFE SA National Security Centre of Excellence; and $2.5 million, matched by the ACT, to establish the ACT Cyber Security Centre of Excellence. We also have a range of a free TAFE initiatives, and we have a range of work and projects going on within our jobs and skills councils. The 10 jobs and skills councils are a national network of industry led tripartite organisations funded by the Commonwealth, and they collaborate with employers, unions and governments to identify and address skills shortage and workforce challenges within their respective industries. There's a range of work and projects going on within each of those jobs and skills councils to look at the challenges and emerging technology within each industry to respond with skill sets that then feed into the national training system. Senator DAVID POCOCK: So there's some stuff happening, but, adding up those numbers, it looks like less than $40-odd million is going into this. Ms Magro : That is one set of measures. I don't have the funding amounts for all of the various projects and investment across the national— Senator DAVID POCOCK: It's specifically on AI upskilling. Ms Magro : Yes, so specifically that's the funding for national centres of excellence, but there is a whole range of funding, under the National Skills Agreement, which totals $3.7 billion over five years. That's the framework in which all skilling for Australia is happening. There is a range of ways in which skills development occurs and then flows into RTOs, which individuals can then access. Skilling is largely identified and updated by our jobs and skills council. Senator DAVID POCOCK: It's hard to say that all of TAFE is— Mr Harb : Because capability, as I mentioned earlier, is one of the themes of discussion at the forum, it might possibly be worth adding that there is a lot of capability building and skill development happening within organisations, depending on the way that they are adopting AI. There's an agreement, through the forum, that capability is an important aspect of responsibility for the way AI is adopted within workplaces. We have seen, or heard, through our engagement that organisations have got quite significant investment in skill and capability development within their organisations that, I guess, is more tailored to the way that AI is being deployed and, therefore, helping their employees and managers to work through that change process and to understand how best to get the most out of the technology within their organisation. Senator DAVID POCOCK: Thank you. I'll chuck some more questions on notice, but $40 million for us while Singapore is deploying $1 billion—there is a huge amount of work to do there. Thank you, Chair. CHAIR: Senator Sheldon. Senator SHELDON: Following up on that question, you raised getting best practices earlier. I noted that, with the confrontation—the argument, the disputes—that occurred in the Commonwealth Bank, ultimately the solution was found between the Commonwealth Bank, the workforce and the Finance Sector Union which allocates tens of millions of dollars to retraining. There are those sorts of retraining programs that are also happening that complement the instruments that we have, which, frankly, Singapore doesn't have—Singapore doesn't have many wonderful things, actually. There are other mechanisms that are also used. The Fair Work Commission came up with a formula for getting the parties together so that a tripartite solution came up. There are more things to be done in that space, in the finance industry, in retraining or what have you. Both the Commonwealth Bank and the Finance Sector Union would say that. It's not set and forget. It's that best practice piece that I am really interested in. I want to take this to the best practice question. The New South Wales government made some changes to their occupational health and safety legislation for the workplace which looked at this question of the impacts of AI on the workforce but, again, incorporating the concept of tripartitism. I might overlap two aspects of this. One of the things that strikes me about the occupational health and safety act is it's very much geared towards tripartitism. It's really about guidelines, industry, workplace coming up with programs about how to deal with not only safety risk but also better performance to make sure it's done both efficiently and safely. The New South Wales program is looking at some of the risk questions but that forum about OH&S laws is a very tripartite system. That is pretty much agreed to across the Australian economy. There is a collegiate view across the economy about what's the right way to do things. Are there lessons learned from the New South Wales OH&S changes that we could learn from? There's also the broader question about what next potential steps are being considered for the more tripartite approach. So when AI is deployed—keeping in mind the word 'safe'—software may have been approved that may be technically productive but, in actual fact, when it's deployed, the real question is about how it's going to play in the real world. I'm just getting to this question of tripartitism and how critical is its role in the getting best productivity, the best performance, the safest practice. I'll stop there. Mr Harb : There is a lot in that question. I'll try and touch on those aspects that you've raised, and I'll start off by saying we are engaging with the Commonwealth Bank. As you say, the example that they've provided and the FSU—I do understand how they led to best practice. There is public reporting around some programs that the Commonwealth Bank has in place that go to that question of capability building and skill development within its organisation. Certainly, it is part of our conversations on developing best practice. As you rightly point out, work health and safety operates under model laws and is regulated by the states. There are two key elements to what you've outlined there under work health and safety laws, and that is that the employer does have a duty to manage the health and safety of workers in workplaces. That would include risks arising from the use of AI. Similarly, designers of plant used in workplaces, such as software designers and developers, also have duties under work health and safety laws to ensure AI software and systems are made without risks to health and safety. The laws exist under an element of reasonably practical assessment of those things. There are duties on both of those to ensure the risks of AI are managed, and that includes both the physical risks and the psychosocial risks that could arise from AI. The laws are technology neutral, so they do apply in those contexts. But that continues to be a topic of conversation that we're having in the forum. Safe Work Australia is the independent policy body that supports the work health and safety laws. They've got a best practice review underway, and, as part of that review, it includes consideration of digital technologies—that is, AI. They have been looking at that since September 2024; that's when that review commenced. There are some insights there we can gain from Safe Work Australia, and they are involved in the forum as well. Senator SHELDON: What's the timeline for their review, which has been going since September 2024? Mr Harb : I understand they're finalising the report, but I might have to take that on notice. Senator SHELDON: I gather they're looking at the New South Wales scheme and changes as well. Mr Harb : Absolutely. They've got a reference group and engage closely with states and territories, as well as with employer and employee organisations. Senator SHELDON: You can take this on notice, because I know we're short on time. I have a whole pile of questions which I'll put on notice, but the Quinlan and Williams submission says the research shows that 83 per cent of HR professionals are familiar with AI tools but only 20 per cent have a good understanding of how these tools operate. Also, 44 per cent of employees surveyed did not know AI was being used in HR decisions of significant impacts on workers. Those are pretty dramatic figures. There are international studies. This submission particularly cites OECD research estimating that 76 per cent and 90 per cent—this is OECD research on gig economy platforms—of companies in the United States and Europe respectively use at least one algorithmic management tool, but people aren't aware of how the tool operates. So HR managers know they're doing something but didn't know how it works, and large numbers of employees don't know it's being used to manage them, rather than human intervention sometimes deciding. So the question is about how we are building up capacity, how businesses are building up capacity and how we are driving capacity building. That goes back to that OHS model. We're bringing all these things in which are all OHS issues. The guidelines on companies' OHS responsibilities when it comes to AIS are very critical—and critical timing. Mr Harb : I haven't seen those stats, but I'll make sure we have a look at those. Certainly, the point you're making is right about the need for transparency. Transparency is one of the key themes that the forum has discussed. Really, the point here is accountability of AI informed decisions should be with human decision-makers, and the forum has really talked about that as being an important aspect of building trust in the way that AI is delivered and adopted within workplaces. It's certainly an area of focus that we're looking into. Senator SHELDON: If you can take this on notice—you don't have to answer it now. I know it has to go to other people. I have a question about how it relates with the overarching safety desires of the government and the AI safety committee. How does the workplace relate when software is being developed, proved to be technically okay and perceived as okay? Is there a requirement about processes, and how does that requirement play out as part of a demand of every level of decision-making or oversight from the highest level in the AI safety group right through to a company implementing it? What are the steps that are required through that mechanism? CHAIR: Senator Cadell. Senator CADELL: To go back to something, you said, 'We're monitoring what goes on.' What's the preparation for what goes on? You mentioned the plausible cause of the J-curve. I've gone back and looked at what has happened in other similar transitions, and it's exactly what you're saying. In 2017 the US National Bureau of Economic Research looked at the mechanisation and robotisation of manufacturing. They said that five to six workers were lost per robot installation. You saw a jump in employment at installation and then a drop-off. So what are we doing as preparation in case these scenarios come about? Mr Cowgill : On potential policy responses to displacement, I'd hand to Mr Harb. On the point about past technological change and what that has meant for employment, I think it's important to remember the big picture, which is that the proportion of Australians in work now is close to an all-time high. As is the case at all times, there are certainly some occupations that are shrinking and others that are growing, but, on net, employment remains very high as a share of the population. That is important to bear in mind. Past studies of technological change in the Australian labour market suggested that, on net, most have been positive for employment. There was a study by Jeff Borland and Michael Coelli of the University of Melbourne which said that in the past the displacement effect of technological change—that's the negative effect—was consistently offset by reinstatement and productivity effects. In other words, past waves of technology tended to create more jobs than they destroyed, on net. That's not a guarantee that the same will be true of AI in Australia, but I think it is an important reminder that the immediate effect—the displacement effect—on the exposed occupations can in some cases be outweighed by the boost to employment that we see either through the creation of new roles or through productivity that raises overall demand and therefore demand for labour. On the preparation for potential downsizing, Mr Harb may be able to speak to that. Mr Harb : For our portfolio, the fair work framework and the work, health and safety laws, as I mentioned before, are both technologically neutral and designed to be flexible in any circumstances. That includes the adoption of AI. Through the forum we have continued to monitor the experience of the laws on workplaces and workplace AI adoption. That work is ongoing. We'll continue to do that to ensure that the system remains flexible. Really, as Mr Cowgill said earlier, the scenarios are many and different. Senator CADELL: That's why I was wondering about the preparation. Senator Pocock mentioned a tipping point. I went back historically, and in 1904 there was the first registration of motorised vehicles in South Australia versus horse-drawn carriages. You get to 1921 and 68 per cent are still horse-drawn. Three years later, it's 27 per cent, and it's six per cent three years after that. The tipping point comes quickly when it comes. In six years, you're gone. That's why I want to know the preparation, because we are playing catch-up on the technology and we're playing catch-up on this. Nowhere in the world has fully happened, and I want to know what goes on. There are different studies. You raised that one there. The Australian Productivity Commission raised the 40 per cent loss in jobs in the automotive industry between 2006 and 2013 because of the substitution of capital for labour. So there are realistic variations on both. Mr Cowgill : Absolutely. Those things aren't inconsistent. As you say, the Productivity Commission found that certain occupations in that case, in car manufacturing, did shrink as a result of the introduction of technology. That's why it's important, of course, to help workers make transitions from occupations that may be exposed and potentially shrinking to other occupations, which goes to what Ms Magro spoke about before in terms of the skills response. Nevertheless, over those past waves of technological improvement and their introduction into the workplace, we have seen employment grow over time, despite the effects on particular occupations and industries. Senator CADELL: So, in that preparation, are we looking at the least affected jobs and recommending those training things? Give me the actuals, not the 'what ifs'. What are the jobs that are going to be least affected? Should we be training in different areas? What are the jobs most affected? It's like—I'm a Nat, so I'm going to be a little bit on this—'everyone that works in a mine can go into green tourism'. It was never going to work. This is every time we're shutting something. What are we looking at here? Mr Harb : I think part of Mr Cowgill's work was looking at occupation-specific changes and monitoring what that looks like. You might want to talk a bit more about that. Mr Cowgill : That's right. There are a range—and this, again, builds on work that our colleagues at Jobs and Skills Australia did, where, for each of the around 400 occupations in Australia, they identified how exposed it is to automation and to augmentation. In general, many of the most exposed occupations are what are termed 'routine cognitive jobs'. These are general clerks, for example, and administrative roles of that sort—retail managers; receptionists; contract, project and program administrators. They're occupations of that sort. The occupations where we would have the most concern are occupations where people have highly occupation-specific skills and so may be less able to transition into other occupations. If you're, for example, a management consultant who may be exposed but you have a portfolio of relevant skills that could be deployed in other occupations, that's probably a less acute concern than somebody who is highly trained in a specific exposed occupation. That goes to what Ms Magro was talking about before—about making opportunities for upskilling and for reskilling available to workers so that they can make those transitions out of exposed occupations. Mr Harb : To go to your question as well, obviously that gives us an insight into what's happening within the labour market. But most importantly, I think, for this portfolio, it's about making sure that workplace settings are flexible to respond to any of those scenarios, that the skill system is designed to ensure that resources and effort are aligned to the skill needs of the economy and that within workplaces it's clear what best practice looks like, to ensure that a lot of those things that could happen can be managed effectively across organisations and within organisations. That's why the partnership approach is important—because government employers and worker representatives play a role in making sure that we're flexible enough to adapt to whatever those changes look like. That's the main focus for this portfolio. Senator CADELL: My concern is like what Senator Sheldon was saying. For the existing businesses that have these things in place, our small business—when the efficiencies become so great that startups are more desirable because they don't have this existing legacy and employment issues and don't have to go through the processes we're talking about. What happens to the legacy businesses that are doing the right thing when the startups become much more aggressive and assertive in this space? What happens to workers then? Mr Harb : The laws apply equally to all of those groups. Senator CADELL: But you don't have the retraining provisions. You don't have any of this. You don't have those costs because you're a startup. Mr Harb : No, and our focus is on informing what best practice looks like in that context in terms of the role. CHAIR: I'm just conscious of time. I'm keen to bring Ms Chaney in before we wrap up. Ms Chaney, over to you. Ms CHANEY: I'm really interested in where a particular piece of work is being done. Given that there is so much uncertainty about scenarios when it comes to employment in terms of timeframe, there being minimal or significant job losses in specific sectors or economy wide, where is that scenario-planning happening? Obviously, if you've got that analysis of the 400 job families and where that's likely to affect things the most, that has big implications for our tax take and for welfare costs, depending on the size of the disruption. It sounds like at the moment it's based on historical data. Because it's moving so fast, I'm worried about social cohesion threats, if we end up with 20 per cent of the work in the jobs in Australia being redundant, and the impact that will have on social cohesion. Who is doing that high-level scenario planning so that those inputs can be fed into different parts of government, like Treasury, to understand what the triggers are to actually need to be thinking about this job impact on a different scale? Mr Cowgill : In terms of the suite of whole-of-Australian-government planning or consideration of potential future scenarios, I would note that the Intergenerational report is one key whole-of-government document that contemplates potential future scenarios with regard to AI, as with regard to a range of other trends, and so the Department of the Treasury would be the appropriate agency to respond to questions about that. Ms CHANEY: But are you feeding in the more granular scenario planning that looks at job families into that thinking? Obviously, it may not happen, but who is building from the ground up the job impact scenarios that are at the more disruptive end, or is it not happening at the moment? Mr Harb : No, no. The work of Mr Cowgill and the department—Jobs and Skills Australia also develops these sorts of insights, and both work into and with relevant areas across government and feed into any Treasury work. A lot of what Mr Cowgill has done gets provided, and he's in consultation and engagement with our Treasury colleagues as well, so they inform how that work progresses as well and what it looks like. So that connection is there. But, in terms of what that looks like and what it leads to, that's probably a question for Treasury to be able to answer on their end. Ms CHANEY: Are you able to share in a broad brush what those different scenarios look like in terms of size of impact that are being fed into other parts of government? That would be really useful. I'd love to get a sense of, 'Best-case scenario, jobs grow despite the productivity benefits. Worst-case scenario, 10 per cent to 20 per cent of people are unemployed in five years,' just to get some sense of the scale of scenarios that government is considering. Mr Harb : From our portfolio's perspective, there's certainly some information there from, I think, Jobs and Skills Australia that we can provide to you. We'll take it on notice, then, just to check if there's anything else to provide. I think Treasury will also be able to answer some of those questions. Ms CHANEY: What about in terms of basing things on historical data versus forecasting? There are methodologies from military and business that look at predictions in fast-moving spaces. Are you using some of those methodologies, or is it really largely based on historical data and what's happened in the last quarter? Mr Cowgill : In this portfolio, we are predominantly focused on what we can see in the data—what is actually happening to employment in Australia. That doesn't mean, of course, that we're not thinking about potential future scenarios, but our work has been focused on that monitoring exercise. I think, in recognition of the fact that there are just such a wide range of possible scenarios here in terms of employment and productivity and so on, there are a range of predictions already in the public domain, including from some of the frontier AI labs. So we feel that we can best add to the understanding within government, and also publicly, by doing the monitoring exercise rather than adding another set of predictions. But our colleagues at Jobs and Skills Australia, in their generative AI report they published last year, did include some of the scenario modelling of the sort that you're describing, Ms Chaney, and considered potential alternative future paths for what AI might mean for the jobs market in Australia. Their conclusion was that it is more likely that AI will, on net, augment jobs rather than automate them but that they do acknowledge a wider range of scenarios as well. Ms CHANEY: Are that wider range of scenarios being seriously looked at and used in other parts of government planning, or is everyone just relying on the most likely scenario put forward by JSA? Mr Harb : For this portfolio specifically—we outlined earlier the response that we're trying to put in place, which is around making sure that our portfolios are responsive to whatever those scenarios look like, if it's the worst or the best. In terms of what others across government are doing, that would have to be a question for others. Ms CHANEY: What's the worst-case scenario your portfolio is prepared for? Mr Harb : Like I said, we're not focused on one individual scenario. Again, our portfolio is working to ensure the settings are right to respond to whatever scenario that looks like. We're not picking a scenario and saying, 'We need to respond to that.' We're taking a pretty wide approach. CHAIR: I'm going to call time. Sorry, Ms Chaney. We have reached the end of this session. Thank you so very much to representatives from the Department of Employment and Workplace Relations. I note that a couple of questions have been taken on notice; we ask that these be provided by Friday 25 September..