COLLETT, Mr Chris, Acting Deputy Secretary, Justice and Communities Group, Attorney-General's Department FITCH, Ms Catherine, Assistant Secretary, Privacy Reform Taskforce, Attorney-General's Department INVERARITY, Ms Tara, First Assistant Secretary, Courts, Tribunals and Commercial Division, Attorney-General's Department LEE, Mr Edward, Assistant Secretary, Commercial and Copyright Law Branch, Attorney-General's Department PRIESTLY, Ms Jenna, Assistant Secretary, Attorney-General's Department [11:35] CHAIR: Welcome. 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. At the conclusion of any remarks, I'll invite members of the committee to ask questions. Mr Collett : I'll keep the opening statement very brief. For our department, the range of policy responsibilities that we cover are broad, and AI touches on pretty much all of them. That covers issues from legal assistance, the federal court system, copyright, privacy, human rights, automated decision-making through to the criminal justice system. We're very conscious that your terms of reference are very broad, and we're very aware of the opportunities that AI does and may provide across the various responsibilities we hold but also the challenges and risks that are inherent within that. In the space of the last week, just speaking personally, I've been involved in discussions with courts and judges around access to justice through the CEOs of the family law services system, who are providing important social services to vulnerable families, all of which are impacted by AI. Our submission outlines, at a high level, some of our key responsibilities that we think we may be relevant to you and your terms of reference. And we're very happy to help the committee in any way we can. CHAIR: Excellent. I might kick off. We are hearing a lot about the connection between the opportunity to secure frontier labs and training here on Australian soil and some of our existing copyright legislation. Have any of the frontier AI companies told the department that Australia's current copyright laws are a barrier to conducting training here in Australia? Mr Collett : I might make some broad remarks, and Ms Priestly will build on those. I'm very conscious that a number of the frontier AI companies have made lots of comments in the public domain and have provided submissions to your committee. We've certainly met with a range of companies on many occasions, as have various aspects of the government departments involved in the AI policy space. It's self-evidently a whole-of-government question that goes to whole-of-society implications, and we're keen to make sure the role and responsibilities that we have around, particularly relevant to your question, copyright are part of that whole-of-government process. Over the past weeks, months and, quite frankly, last few years, we've had an inordinate amount of consultations and meetings, bilaterally and multilaterally, with AI companies and other key stakeholders within the copyright space, all of which go to your question. I might ask Ms Priestly to talk at a high level around the sorts of issues that AI companies raise, and I assume that will then go to the sorts of issues that the various rights holders raise. CHAIR: That would be great. Ms Priestly : At a high level, the key concern that the AI companies have raised is that Australia's current copyright laws don't enable them to manage legal risk with sufficient certainty to invest in training here. Their key concern there is that the volume of material that they need for frontier AI training is magnitudes more than what they say is practically feasible to voluntarily license. I think it's generally accepted that in Australia if an AI company does wish to use copyright material for training onshore, the only way to do that under the current framework is to seek a voluntary licence, either on a direct or collective basis, from rights holders. I can talk about some of the things that we've heard from rights holders as well. CHAIR: That'd be great. Yes please. Ms Priestly : On the other hand, rights holders do emphasise the importance of voluntary licencing which enables them to negotiate specific terms for how they want their material used for AI training. In their view, current settings are capable of supporting AI training here. They think, with a relatively small number of voluntary licences struck, particularly on a collective basis, that sort of risk can be managed. They have concerns around AI companies not having genuinely attempted to strike those voluntary licences with them. The key thing that we're hearing from them is that they want control over whether their work is used and payment for any uses. CHAIR: Expanding on that, are rights holders suggesting that exists within our current copyright law? Ms Priestly : I think the core argument that rights holders put forward is that voluntary licencing should be able to cover the field for most of the commercial rights holders and that they think that current policy settings are capable of responding to AI training. CHAIR: How does that connect directly with creatives themselves though? I would say there are creators who are rights holders over their content, but the commitment that has been made by the Prime Minister is around creatives retaining control over their creations and being paid for it, should it be used. What's your sense on that in terms of how it relates to what the rights holders themselves are saying? Ms Priestly : Sorry. I'm not sure— CHAIR: In terms of rights holders versus the artists themselves—the individuals themselves. Mr Collett : Would it be helpful, Chair, if Ms Priestly explains the nature of those organisations? I'm not sure if the committee has been briefed or is familiar. CHAIR: Sure. I'm happy for you to. Ms Priestly : We speak to a range of organisations representing rights holders, and some of those also represent the creatives and artists directly. Some of the core groups that we deal with are the collecting societies, which are— Unidentified speaker: For music and that sort of stuff? Ms Priestly : Yes, for music. There are different collecting societies for different types of content—some for music, some for writing, some for visual art, some for screen—who represent the individual artists and creators. We've also been talking to the MEAA, the relevant union, who also put forward the views of individual creators. Then some of the industry organisations are there more on the individual creator's side than the rights holder's side. An example there might be the Society of Authors. CHAIR: The reason I'm asking these questions is some evidence we heard earlier today from the Office of AI on the correlates between the frontier companies saying it's not quite working and the rights holders saying it should be able to within the existing laws. There's also a sense that the current framework we've got—'the status quo' is what was said to us today—is not properly delivering and this is a potential moment to help rectify some of the concerns in order to bring that here and get greater payment and control back to creators through this process. Ms Priestly : I would say that's certainly one of our policy drivers. Seeking to attract AI training here gives the Australian government more, I guess, control over the conditions that apply to AI training. We are aware that there is AI training happening overseas without permission or payment to rights holders or creatives or the media. There are some deals being done, but by and large that's being done with very limited control and payment back to Australian rights holders at the moment. Part of the policy objective that we've been asked to look at is around attracting the investment to Australia to try and give the Australian government more leverage over those conditions. CHAIR: Further to that is the opportunity potentially in front of us to use this moment—the desire of these big companies to come here and train here—to end up getting a better deal for our Australian creative industry and media and journalists and things like that. Mr Collett : There is certainly the potential for that, and that is part of, as Ms Priestly said, the drivers that government is having to grapple with in this complex, dynamic policy space. CHAIR: Senator Cadell, I'll throw to you. Senator CADELL: I have two areas I want to ask questions about. It's just scoping. I think I know the answers, but I want to get clarification on this. Page 4 of your submission says the issue at hand is 'permission to use Australian copyright material for AI training'. Is it just Australian material, or is it all material globally that we're worried about them using if they come to Australia? Mr Collett : I think it's both. Again, I might defer to Ms Priestly's expertise. Ms Priestly : Just to take a step back, copyright works on a territorial basis. It's the country in which the activity occurs whose law applies, rather than the origin of the material itself. So Australia's Copyright Act protects material that's Australian in origin but also creative material from across the world. Senator CADELL: So we apply the same standards to everyone else's creative materials? Ms Priestly : That's right. Senator CADELL: So it's not just Australian stuff that they want access to—it's around the world, with our laws? Right, okay. I understand that. Then, on the difference between training models and the inference models, I've got specific questions around section 43B of the Copyright Act. My understanding—well, my reading, but I don't read really well—is that section 43B of the Copyright Act says a temporary reproduction may be made as necessary and incidental as part of the process. Have you ever got—I don't yet want to know what that legal advice is—legal advice as to 43B and how it fits in with the inference model? Ms Priestly : We've been working on this for a number of years, and I can't recall everything that we've exactly had legal advice on, so I'd have to take that on notice. Senator CADELL: Okay. I know the training models were a lot of these discussions about the learning and the data scrape. A lot of my legal colleagues have said they would be loath to give absolute advice about 43B for inferences. Given the announcement in Queensland, I just think it's something. So we're not just looking at the training model changes to copyright; we may actually need to look at things like 43B. Mr Collett : You're right. Of course, the current focus is the public attention on AI training, but these are broader policy questions the government and the parliament need to grapple with. As Ms Priestly just alluded to, some of the discussions have been occurring over the last couple of months, but many of these issues go back a number of years. We are fortunate, I think, in Australia to have a well-organised series of stakeholder sectors in this space to be able to contribute to public discourse on what are evolving, complex policy problems for government and ultimately for Australia. Senator CADELL: We're talking about national sovereignty, we're talking about the importance of getting these things here and we're talking about the competing race. If it's not Australia that they geographically diversify to, is it other locations? This is probably not in your remit. It's probably the AI, but there's probably an interface between. Do you compare our copyright laws with not America, because that's where they already are, but other potential venues for diversification to look at that differentiation? Mr Collett : The short answer is yes, and not just in the context of your specific question. The nature of copyright policy and legislation is both national and international, so there's a constant requirement to be looking at how different countries are grappling in this space and how policy and legislative changes to their respective frameworks have flow-on effects. While that's challenging, I think there is a reasonable understanding internationally across copyright responsible areas. Do you want to unpack that further? Unidentified speaker: In what way? Senator CADELL: Not really! Mr Collett : It's more if you have specific questions around it. Senator CADELL: You know how people can destination-shop for laws that are easy. Mr Collett : Of course. Senator CADELL: I'm just wondering if there is any near competitor to us that has noticeably easier— Mr Collett : I don't think there's a singular answer to that question. There are differences across different countries. As a departmental official, I won't speculate on what private sector companies are doing, but, of course, in an international environment they'll be looking at— Ms Inverarity : And it might be worth reflecting that copyright is only one part of the consideration, along with things like land, water and power. Senator CADELL: That's why I was saying our near competitors—those that have very similar stuff. Is this a comparative advantage or not? I was just working out where we sit under that. The last question I have is something I raised earlier today when we were talking to these learning model guys about some of the areas. Who are the rights holders to codes and mathematic—the unsexy stuff, where there's not the OneMusics of the world and the APRAs of the world? Who's the body that talks on these things? I'm hearing that's a big chunk of these learning models; 30 to 40 per cent is this stuff. Ms Priestly : At this point, I'm not aware of any collecting society that represents that group of people. Senator CADELL: So it would be hard to find who to negotiate with. Thank you. CHAIR: Senator Pocock. Senator DAVID POCOCK: Ms Priestly, you said that AI companies are saying that they need some sort of work around copyright to manage legal risk with sufficient certainty. There's an article in the Washington Post today that, according to an unsealed legal brief filed by the New York Times, I assume overnight, said: A Microsoft executive called the training of artificial intelligence models the "largest theft of labour in human history". Is this the risk they're trying to deal with? Do they need a jurisdiction to essentially give them a legal basis that waives copyright so they can't be taken to court, as they have been taken to court in the US? Mr Collett : I don't think I can speculate, as a departmental official, why an overseas company is acting— Senator DAVID POCOCK: You told me that they want to manage legal risk with sufficient certainty. What is the legal risk they're trying to manage? Ms Priestly : I think it's fairly well accepted that, for AI training in Australia, the only way that the AI companies can get permission to be able to use that copyright material for AI training under current law is to seek a voluntary licence, either directly or collectively. What we've heard from them is that, because the magnitude of the copyright material they need to use for this training is so large, it's practically, I guess, impossible to be able to go to every single rights holder, even on a collective basis, to be able to strike the number of voluntary deals that they would need to be able to manage their legal risk in Australia if they were to move some training operations here. It's more about the legal risk that they'd be taking on in Australia rather than what has happened overseas. Senator DAVID POCOCK: Have you tested the proposition that it's too hard? These are the most advanced and biggest companies in the history of the world and they're telling you that they can't negotiate with, I assume, a few dozen—max 100—rights-holding bodies. Ms Priestly : We have been told that the scale of data that they need to be able to train these frontier models is huge. We're talking millions, maybe billions. As Australia's copyright framework protects copyright material that's not only Australian in origin but worldwide, I think they would need a fairly large number to go and strike deals. It's also not always easy to find out who the rights holder is. Some people might not be actively managing their copyright, which makes it difficult to be able to strike those deals. There are a range of factors that weigh in to why they say it's difficult to manage their risk in the way that they would need to be able to make long-term investment in Australia. Senator DAVID POCOCK: Have they tried to strike deals—or are they just saying from the start that it's too hard? Mr Collett : I don't think we can speak to what companies have tried. The government doesn't have a— Senator DAVID POCOCK: You haven't asked them? If they come to you and say, 'Listen, it's just too hard,' do you at least say, 'Well, have you tried?' Have you got a list of who you'd have to deal with? Mr Collett : There are a whole range of discussions that the government's had with the stakeholders in this space. Senator DAVID POCOCK: Is that one of them that the AGD's had with these companies? Mr Collett : We've had lots of 'without prejudice' discussions with the vast number of stakeholders across this space. Senator DAVID POCOCK: You're protected by privilege here, so I would appreciate you telling us. Mr Collett : I don't think I have a specific answer to that question. Ms Priestly : I think that all I can say on that is that, when we do meet with them, we do emphasise the importance of voluntary licensing as part of Australia's framework, and that's something that the government has made clear as well. I can't recall what specific questions we might have asked them. As Mr Collett said, we've met with them and rights holders on quite a number of occasions, but we do emphasise the importance of voluntary licences or voluntary deals. Senator DAVID POCOCK: Are you still consulting on the statutory data training authorisation option, or has that been abandoned? Mr Collett : We're consulting with all stakeholders in this space on a whole range of different perspectives that they are bringing and that the government is grappling with. There's not a finite, singular model. Senator DAVID POCOCK: What about a statutory data training authorisation option? Mr Collett : Government has made no decision on any particular model. We will talk to stakeholders about— Senator DAVID POCOCK: So you're still consulting on that one? Ms Priestly : Yes. Senator DAVID POCOCK: Who came up with that option? Mr Collett : These are such longstanding conversations, I'm not sure that I can say that anybody singularly came up with any one— Senator DAVID POCOCK: Did it come from industry or the department? Ms Priestly : In late 2025 we consulted with the Copyright and AI Reference Group on a range of different options to address this issue. Two of the options we consulted on with that group were a statutory licence and an extended collective licence. The statutory data training authorisation responds to some of the feedback we heard through that consultation, particularly in relation to the statutory licence. The current statutory licences are the model we consulted on in late 2025—a fully compulsory statutory licence, so rightsholders wouldn't have had a say about whether or not their material was caught up in that. The statutory data training authorisation is an evolution of that. Senator DAVID POCOCK: Can you go back and check, on notice. I'll put some more questions on notice. Evidence shows that opt-out schemes, particularly when it comes to AI training and copyright content, are both hugely unfair to creators and rightsholders and woefully ineffective in practice. Why is the government looking at an opt-out option if all the experts say this is not something that works in practice? Mr Collett : There are lots of opinions in this field, as you'd be aware. Government is looking at a whole range of options to deal with—I am conscious we're focusing on the copyright part of a broader public policy discourse around what the best outcome is for Australia in this space. From the department's point of view, we are actively and openly engaging with all stakeholders in this space, and we're open to all perspectives, to provide advice to government to determine what the best outcome is for Australia. Senator DAVID POCOCK: But, in dealing with copyright, surely AGD is dealing with copyright—or are you saying, 'Well, actually, in the scheme of things, it might be better for Australia if we upend copyright and find a workaround for the greater good'? Surely AGD is looking just at copyright? Mr Collett : No, that wasn't what I was saying; apologies if I gave you that impression. We're one part of a multi-departmental engagement, and there are multiple ministers within our system that have responsibilities here. I'm conscious that the Department of the Prime Minister and Cabinet appeared before your committee this morning. They're playing a coordinating role. One of the realities of this policy question is it touches on so many different parts of government's responsibilities to the community, and it necessitates input from a whole range of departments. I note that the role the Office of AI is playing in that coordinating space is helpful and important to us from a public policy development and advising perspective. Senator DAVID POCOCK: In terms of AGD and copyright specifically, we've seen the argument put that the government has to change copyright law to provide legal certainty to AI companies so we can get data centres here, and that this is a priority over everything else. Is that correct? Is that the basis the government is working on—that we have to find a workaround? Mr Collett : No. That's an argument that some stakeholders have provided. Our department is engaging with the diversity of opinion, to provide the most contemporary picture we can to government on where stakeholders sit, to develop the best way forward for Australia in what is a novel and complex space. The government has not made decisions on copyright reform. Senator DAVID POCOCK: Have you told AI companies that they should be negotiating with rightsholders? Mr Collett : It's the role of the department to tell companies to do things. We explain and outline the Australian copyright regime and how it currently stands. We're engaging with companies, as we are with all other stakeholders in this space, on potential reform options that are in the national interest. Senator DAVID POCOCK: In terms of the options you've put forward with the opt-out system, what modelling, proof or feasibility reports are you relying on as a department to say it'll be effective? Mr Collett : The models we're putting forward—are you referring to the documents? There are eight memoirs we've used to help structure conversations with stakeholders. We're dealing with bilateral discussions and large multilateral roundtables—some focused on rightsholders, some with tech companies, some with all parties mixed together. We're engaging with stakeholders on their reactions to the various opportunities and options before us, not a singular way forward. Senator DAVID POCOCK: I understand that, but it's been put to me that the main proposal from government is, essentially, that you can do your voluntary negotiations and enter into agreements with rightsholders—which AI companies say they won't do; they say it's all too hard. If that doesn't happen, the government will force them to pay into a fund that is then disbursed to rights holders, and if you don't want to get a disbursal you opt out. Is that kind of correct? That's what I'm hearing from people involved in consultation—that that's sort of the preferred option at the moment. Mr Collett : I think that's one aspect of it. Senator DAVID POCOCK: Sure. Ms Inverarity : I don't know if I'd characterise it as a preferred option. I think it's part of the discussions we're having on design features that could constitute a proposal the government might want to consider, but I don't think it's accurate to describe it as a preferred model. Senator DAVID POCOCK: So the government doesn't have a preferred model? Mr Collett : The government hasn't taken any decisions on copyright form with regard to frontier AI at this time. Senator DAVID POCOCK: They haven't made a decision, or they don't have a preferred option? Those are two different questions. Mr Collett : I can't speak for what—they haven't made a decision. There are lots of different— Senator DAVID POCOCK: They haven't said to you, 'Consult, but this would probably be our preferred model'? Mr Collett : This is an ongoing discussion, and it's current government deliberation. Senator DAVID POCOCK: Have they said to you, 'This is our preferred model if— Mr Collett : That implies, though, that there is sort of a fixed position. This is an evolving discussion, both within government and with a whole range of stakeholders, and government hasn't taken decisions. Senator DAVID POCOCK: On this option that you're providing to stakeholders, where there's the opt-out, what modelling, proof or feasibility reports do you have that show that, if someone does opt out and attaches these text files, it actually works? Ms Inverarity : I think that's the reason for the consultation: to engage in that discussion, including with rights holders, adds to the feasibility of those designs— Senator DAVID POCOCK: So you're putting forward an option that you don't actually know will work? Ms Inverarity : We're putting forward elements of a model to engage with stakeholders who have the relevant expertise to assist us to understand whether it could work, on both the rights holder side and the AI company side. That's the purpose of the consultation. Mr Collett : It's not as singular as, I think, some of the media commentary seems to imply, which I think is why I’m struggling a little bit with your question. There's a whole range of aspects feeding into this. You know, Ms Priestly, how many consultations, bilaterally and multilaterally, you've had in the last couple of weeks and months. This is a constant and very deep discussion that we're having with all parts of the sector to develop an understanding and to be able to provide information to government to make decisions. Senator DAVID POCOCK: So, does opt-out work? Does the department think that it works? Mr Collett : The department doesn't have a view on that at this point in time. We are engaging with stakeholders to best understand the options that are available to Australia and to the government in the broader context of frontier AI policy. Senator DAVID POCOCK: Do you have a timeline on when you'll work out whether opt-out works? Mr Collett : The timeline is really a matter for government. I'm sorry; I don't have a specific deadline. Senator DAVID POCOCK: What about in the department? Surely in the department you're working toward some sort of timeline. Mr Collett : We're working on an ongoing basis. Some of these discussions are two or three years old. This is an ongoing— Senator DAVID POCOCK: I understand that, but you must, in the department, have some sort of deadline, or some sort of date, where you're saying, 'Okay, by this date we want to do this.' Mr Collett : This is a very current discussion within government. No, I don't have a specific answer, or a deadline for a particular point. We're constantly engaging with our minister and her office. With the sector involved, the Attorney herself has undertaken some of these consultations directly. This is a contemporary discussion. The timing of decision-making is a matter for government. Ms Inverarity : I think it's reasonable to say we're progressing it with urgency. We've stood up a copyright and AI taskforce and you've heard from the Office of AI on the work that they're doing, so we're all working together with urgency, but we don't have a single date that we can give you that's a deadline. Senator DAVID POCOCK: Can you give us an assurance that you will have decided on the feasibility of opt-out before the final model is presented? Or will you work that out down the track? Mr Collett : I'd phrase it slightly differently. We'll provide advice to government, who will decide on the feasibility of opt-out. We'll provide advice on the basis of the consultations that we're doing. And that's part of a broader piece of advice across multiple departments. CHAIR: Senator Cadell had a quick follow-up on that. Senator CADELL: Just on timing—but I know I've taken your answer, and I accept that. Fergus Hanson from PM&C was saying this morning that they want to have an exposure draft on some other stuff by the end of the year. You haven't been told to work to that timetable to incorporate your changes? Mr Collett : Timetables are evolving and I don't have a specific answer. Senator CADELL: But you haven't been told to work to that timetable of the end of the year? Mr Collett : I'm not sure what timetable Mr Hanson was referring to this morning. Senator CADELL: He said exposure draft on the AI models and standards by the end of the year—legislation. Ms Inverarity : Our intention is to be in a position to support government on whatever decision it chooses to take about reform generally, and then the timing of it by means of further consultation or legislation. So we're just positioning ourselves to support government on whatever they choose to do, and, as Mr Collett said, that decision hasn't been made. Senator CADELL: But PM&C's a department and they're saying that they're working towards that end-of-year timetable. You have not been told the same timetable? Senator DUNIAM: [Inaudible] Ms Inverarity : I think the AI standard incorporates a range of reform and legislative measures beyond just copyright. Senator DUNIAM: This is integral to progressing the entire debate. Ms Inverarity : It's really a matter for government as to when it might choose to progress legislation—if it even chooses to progress reform to copyright. Senator DUNIAM: Yes, it's not a question of whose prerogative it is; the question was: are you fitting to the timeframe— Ms Inverarity : The issue I have with answering that question is that it's still open to government to choose to do no reform to copyright, in which case there would be no need for exposure draft legislation. Until government makes decisions, we're not in a position to say what legislative path may be relevant, let alone what the timing for it is. Senator DUNIAM: So there is no timeframe. CHAIR: Are you working towards being ready for government— Ms Inverarity : We'll support government on whatever choice they make. CHAIR: Senator Sheldon. Senator SHELDON: If the AI labs that train a new model are in a data centre in, say, the United States, where there's a fair use copyright framework, or a country like Japan, where there's a text and datamining exception, how much do Australian rights holders currently get paid? Is it essentially nothing? Ms Priestly : There are some deals that have been done on a global basis, some of which would flow through to Australian rights holders. I don't have figures on that, because they would be commercial deals that we don't have visibility of, but, yes, overall, I think your characterisation is correct. Senator SHELDON: I've seen some comments from Jessy Wu, who said that the status quo of Australian copyright law—again, that point—hasn't kept Australian creators' work out of those models' training data, and nor has it put a cent in copyright holders' pockets.' She goes on to say: If we don't put ourselves in contention, these data centres will simply be built elsewhere, potentially with fewer conditions and safeguards. Australia will remain exposed to AI's risks, with fewer levers to manage them, and less participation in the economic upside. Do you agree that the current window in which frontier AI labs are considering making major investments in AI training infrastructure in Australia may give us levers to deliver a better deal for Australian rights holders than we're currently receiving? Mr Collett : I haven't seen the specific article you're quoting, but it goes to the diversity of opinions in this space. While I defer to other agencies that are probably better placed to determine timeframes around global AI development—as I noted before, we're very much part of a whole-of-government approach here—it certainly strikes me as a reality that, if training occurs in Australia, the community, through the Australian government, will have greater control than if it doesn't. Senator SHELDON: It's part of the bargain. Mr Collett : The outcome of the fact that it would then be up to the Australian government to set the terms under which that occurs in Australia—I do note that it's not really our department that's best place to answer your question, but that seems to me to be a reality. But, of course, that then comes down to what other conditions are determined that best suit Australia. Senator SHELDON: That's a fair answer. There are a number of moving pieces. Whilst part of the conversation here, they give us capacity to potentially come to solutions to some difficult questions that are being asked or outcomes we're seeking. If those pieces are moved elsewhere, we've lost that bargaining chip. Mr Collett : That moment in time will pass. That's true. Senator SHELDON: How does the department assess the feasibility of licensing frameworks for AI training data, particularly for online content? How does that assessment work? Ms Priestly : I think it's probably an answer similar to what my colleagues gave in terms of the opt-out options being considered. We engage very regularly with a range of stakeholders that are experts in their industry to hear different views around licensing frameworks. We can analyse that and provide that advice to government. Senator SHELDON: There is the transparency question about obligations the department is considering regarding copyright material being used in frontier models. Is there some thought being given to that? If so, what does that look like? Ms Priestly : That is in the mix in terms of the different types of options and different elements of the options that we have been considering and consulting on in order to provide advice to government. There are some models overseas that we're looking at, including in the EU and California, but we are also seeking views from different stakeholders about what they would like to see in terms of transparency requirements if that's something government wishes to pursue. Senator SHELDON: So the EU and California models are the conversation starter piece and maybe the conclusion. Ms Priestly : In general with policy development, we'll always look overseas to see if there might be examples that we can draw upon. Those are two existing models that we're looking at and consulting on, but they are certainly not the end of what we're looking at. Senator SHELDON: It goes back to the earlier point that there's a conversation taking place in trying to find parties to consider what should happen within the broad frame that the government's outlined, with creatives being dealt with and appropriate conversations with creatives being had. Mr Collett : There's a huge amount of consultation inherent to your question. Of course, there's the Australian discussion, and we've been touching on the copyright aspect that our department plays a role in. There's a global discussion here as different countries grapple with international companies that are naturally looking for whatever is the best home that suits their commercial interests. It's an issue that a range of countries, ours included, will need to grapple with for some time. CHAIR: Deputy Chair. Senator DUNIAM: Earlier, one of the options canvassed was no response required [inaudible]. Is that an option that's being considered here? Ms Inverarity : What I was trying to convey was that the government has not yet made a decision. Senator DUNIAM: No, I'm aware of that. But is that an option—that no legislative change is required to progress this? Ms Inverarity : I think we are balancing the objectives of, as the Prime Minister set out in his speech, attracting AI investment and protecting creatives and rights holders, giving them compensation and control. We are supporting government to consider what design features might constitute an option that would do that, but, until government makes a decision, the status quo prevails. Senator DUNIAM: Absolutely—until there's a change of law. I will work backward from the Prime Minister's speech. Personally, as someone who thinks this is a great opportunity for our country to run ahead with and take advantage of, one of those key blocks, as has been enunciated here, is that dealing with copyright and balancing the rights of copyright holders and those who seek to work with them in training their models, or the AI companies—I'm just trying to understand, because it is an essential element of any legislative framework that might be put in place. I'm not asking you what you have chosen. I'm just wondering: given the Prime Minister has said an exposure draft will be provided before the end of the year—that was in his speech—and the head of the office of AI said they expect to have an exposure draft out, is that a timeframe you are working to? Do you have no timeframe? Would you be ready to meet such a timeframe? Mr Collett : We are certainly conscious of that timeframe. I think the legislation that Mr Hanson was talking about and that the Prime Minister spoke about in his July speech goes to the AI standards. It's a matter for government to determine whether, if there is going to be reform to the copyright framework, that's in that piece of legislation or another one. That is a choice for government. So the commitment around the end-of-year legislation is around the AI standards legislation, and the [inaudible] is leading. Ms Inverarity : But I guess we are absolutely. If government chooses and wishes to proceed with legislation this year, as always, the department will support them in achieving that objective. But, as with all things, timeframes may inform what's feasible in terms of policy options and legislation, so it's a complex mix of factors to come together as to legislation and implementation of what's feasible. CHAIR: To connect that to the discussion around the window generally that is open to us now to potentially get—I just want to further clarify some of the answers provided just a moment ago to Senator Sheldon. If we do miss this window and we end up not achieving the outcome, can you reflect on the outcomes for creators and rights holders? What does it mean for us if we do that? Ms Inverarity : I think that would require us to speculate on commercial decisions that would be made by the AI companies. We're obviously aware of what they've said, that the conditions in Australia, in their view, need adjustment, but they're commercial companies making commercial decisions. We couldn't speculate on whether they might choose to take that—to stay in the United States, to go to a different country or to still pursue it in Australia. CHAIR: I understand that. Sorry, the point I'm trying to make is, in terms of our understanding of how this is working at the moment, I think we've had some reflections around how right now Australian artists, creatives and a range of people have said their work is being used, whether it's in the US or elsewhere. Right now they're not receiving compensation. Is it the view that we have this window now to actually secure a better outcome for Australian creatives? Ms Inverarity : That's precisely the reason we're undertaking the process that we are at the moment, in line with what the Prime Minister set out about wanting to consider this moment and those opportunities. CHAIR: What would be the outcome—essentially, it's the status quo—if we do miss this window? Mr Collett : There's a huge amount of speculation in answering that. Yes, from the Australian point of view, it would be the status quo if government doesn't make any other decisions. As to what, as Ms Inverarity was saying, international companies choose to do, that'll be a matter for them. What that then means if they operate on an ongoing basis in the US—I assume they will do that—or if they operate in a third country, what flow-on effect will that have for Australian copyright holders? That is precisely a question the government's got to grapple with, and it's a very complex space. CHAIR: The point is then the opportunity that is available to us has a sense that the current existing framework isn't actually delivering good outcomes for our creative industry. I think I've made this point a couple of times now that this is our moment and chance to actually get a better deal that perhaps wasn't necessarily open to us previously. We haven't had this momentum behind a shift in policy framework that is in front of us at the moment. Mr Collett : Yes, that is what government's grappling with now, as is whether that then allows Australia to set its terms to have a better outcome for Australia as an entire community, as well as, of course, creatives within that for the purposes of the conversation we've been having here today. CHAIR: Senator Pocock. Senator DAVID POCOCK: I wanted to ask a few more questions. We're being told that there's this window in time to do something and that something is better than nothing. How would your proposals affect copyright holders into the future, if there is some sort of scheme where these big hyperscalers, the AI companies, pay into a fund? We're seeing lawsuits all over the place. I mentioned the New York Times copyright case against Microsoft and OpenAI earlier. Would it mean that that couldn't happen down the track, because Australia has essentially provided a solve to copyright laws? Mr Collett : It's such an important question that you're asking, Senator. The problem I have in trying to answer it is that, as a public official, there are so many assumptions in that. It depends on what are the parameters that government determines. I think inherent in your question was an assumption there would be a legislative change—what is the precise context of that, and how does the domestic and international market respond to it? Senator DAVID POCOCK: Let's go off the one option that's been presented, where you can do deals. If you don't, you pay into a fund. Everyone else who doesn't want to get scraped can opt out. What does that mean for people's copyright in the future? Anthropic reckons they're heading for a $2 trillion valuation. I assume there are going to be a lot of lawsuits saying, 'You've stolen our IP, and you need to pay.' Ms Priestly : I would say that the cases that you've referenced are in the US under the US's fair-use defence. The copyright law that applies in the US because the training is happening in the US. There is currently no training happening within Australia, so there are no cases. We're being told by the AI companies that they will not do training in Australia if the laws don't change. It's a little bit of a hypothetical question about what the impacts would be on the rightsholders in terms of litigation. Senator DAVID POCOCK: I understand that. The thing that I pick up from the government is that, while you have fair use in the US—so it's open slather; it's all being hoovered up anyway, so let's at least do something—we're now seeing all these lawsuits that say, 'We may have fair use, but this is just blatant theft.' We have one of the executives from Microsoft saying in these notes that have been uncovered that this is the largest theft of labour in human history. These cases only just started. If we do embark down this path of, 'Well, something is better than nothing for our creatives,' does that mean they won't be able to get compensation, because Australia has found a workaround to copyright as we know it? Mr Collett : I wouldn't characterise the position we're trying to look at as, 'Something is better than nothing,' but I take the point you're trying to make. You're right; there is a lot of litigation globally in this space. These are contemporary, cutting-edge issues that governments, the private sector and communities need to deal with. The challenge we have to navigate from a departmental point of view in developing advice and that, ultimately, government will have to make a decision on is: what is the best outcome for Australia? There is so much to where those lines are drawn in achieving the best outcome for our country at this time. Going to the chair's earlier questions, there will be a shifting of the sands here globally, and the government has to make the best decision based on what is in the national interest at this time, absolutely with—going to your question—a view to the best interests of our country into the future. Senator DAVID POCOCK: And what's in the best interests of copyright holders? Mr Collett : That's inherent in that comment. I don't have a singular answer to your question. It's a really important question. Senator DAVID POCOCK: It feels like that's the thing that's been missed in all this. We can't miss out on this opportunity, so let's find a workaround—but the copyright holders are clearly very unhappy, and rightly so. Mr Collett : This is a very contested space; you're correct. And this is why it's important we keep talking to all stakeholders in this space. There are very different views across the various players in this area, as you would expect. Even the questions that the committee has put to us represent, quite rightly, the different views of different stakeholders in this space. Senator DAVID POCOCK: We're not interrogating you. You're the Attorney-General's Department—Australians. We've got Australian copyright holders. And the interface is basically Australian copyright holders versus foreign, basically US tech companies. And they say to you, 'Listen, it's just too hard to deal with rights holders.' My understanding is that you could do four deals which would cover 80 per cent of all music in the world. Are you interrogating that? Are you saying to them, 'Well, give us a list'? They must surely justify why they say it's too hard, and then we embark on this workaround process. Mr Collett : I appreciate the question. I'd refer you to our earlier evidence. We are engaging with a wide range of stakeholders—practically everyone in this space that wants to engage with us. Senator SHELDON: This is the track record, as I see it. The government has outlined a whole series of critical things as regards data centres and also copyright, including the importance of safety and security, and in the case of copyright, of course, making sure that creatives get properly compensated. We're still working. We're talking about the copyright stuff in particular right now. But earlier today we also spoke about the frame that's being built for data centres. There's renewables-plus. There has been some slight nuance on that at a national level, in National Cabinet. And, of course, there's water usage. I'm not going to sit here and say that there's a copyright failure, because, in actual fact, we've already demonstrated that there's a will, collectively, across parliament to make sure that we have the energy piece and the water piece. And there's a determination to get the copyright piece right. For me, I would not be characterising it as, 'Something is better than nothing.' I think we've made it very clear in two policy areas so far and in what we've demanded for the copyright space that we want appropriate outcomes. Ms Inverarity : I think it's important to reinforce that we are working into a whole-of-government process to ensure that we support government to make the best decision for Australia as a whole, taking into account all of those aspects, including national security and other elements. We know the importance of copyright within that decision, and it's been made very clear that it's a prominent aspect of the consideration. But we are seeking, under the leadership of the Office of AI, to support government to put all those pieces together and decide what's best for the nation at this moment. CHAIR: I appreciate Senator Pocock's line of questioning, but it doesn't strike me that the approach thus far has been trying to find a workaround in order to secure these frontier policies but rather using the leverage that we have, with the interest of these companies that want to come here, to ultimately get a better outcome for our creatives than we do right now. I appreciate Senator Pocock's point around also thinking about the future and what this means going into the future. But my sense is that this isn't about framing it as just trying to placate the industry, going to Senator Sheldon's point. I think we've had a propensity to put big tech and tech companies on notice on a range of different levels that go to the digital duty of care and our social media reforms. Would it be correct to say that the framework that we are operating in at the moment is about how we get the better outcome, rather than just simply trying to circumvent or get a workaround? Mr Collett : I think that is a very neat way of summarising it, Chair. The intention of the government is to get the best outcome for the Australian community in this space. That needs to consider immediate questions, that needs to consider long-term implications and, as Ms Inverarity said, it needs to consider the broad mix of policies here. That goes to your comments, Senator. This touches on so many different aspects of public policy across our remit. It's very important, in our view, that there's a whole-of-government approach. The Attorney-General's Department is absolutely committed to playing our part in what needs to be a team-Australia approach to this complex issue. CHAIR: I think that is a neat way to end given the time. I might bring a close to that now. Senator CADELL: I've got— CHAIR: Yes. Senator CADELL: Ms Priestly said before that the learning model is saying this is no change to copyright and they'll come in here. It's on the back of an announcement this week about an inference model being built in Queensland for significant amounts of funds. Couldn't we still get the investment with no changes to our copyright laws, because they're already going ahead and building this inference model? Couldn't our data centres just use inference models, rather than learning models, and we still get the investment? Mr Collett : I'd defer to other areas of government that are better placed to give you an expert answer to that, but my understanding is that they are different parts of AI investment and that— Senator CADELL: Yes, they are completely different, but 43B, if you're happy with that, from the inference model—we'll get that on notice, as you said earlier. If you're happy with that secondary, there's no real need for change. Mr Collett : It depends on what the government and the community is trying to achieve. They are two different issues. CHAIR: Thank you. While that goes to the point, thank you very much for coming today and giving your evidence. I really appreciate it. The committee has agreed that all those answers to questions on notice that have been sought today should be provided back to us by 25 September. Proceedings suspended from 12:27 to 13:19 .