Govt spent $200k on AI group before axing it Officials instructed on how to answer tricky questions. By Denham Sadler on Feb 26 2026 12:20 AM Print article A Department of Industry official sought approval from Industry Minister Tim Ayres [pictured] to notify applicants the AI advisory group had been axed. Photo: Supplied / Shutterstock The federal government spent nearly $200,000 and 15 months making a shortlist of candidates for its AI advisory group before abruptly scrapping it, later instructing officials to blame the “rapidly evolving landscape of AI”. Documents released under a Senate order show the Department of Industry narrowed almost 300 applicants to 12 shortlisted candidates before the body was quietly abandoned late last year. Instead, the government announced it would scrap the planned AI Advisory Body and create an AI Safety Institute sometime this year. The advisory group had originally been announced in 2024 by then-Industry Minister Ed Husic, alongside an interim expert panel intended to guide proposed AI guardrails. Those guardrails have also since been dropped. The Advisory Body was included in the $21.6 million AI package in the 2024 federal budget. 15 months later The documents detail what happened during the 15 months between the announcement and the cancellation – and how officials were told to manage the fallout. By February last year, 12 nominees had been selected from 275 applicants and contacted by Husic to provide documentation. They then heard nothing for six months. In August, a Department of Industry official sought approval from new Industry Minister Tim Ayres’ office to inform both the 12 nominees and the hundreds of unsuccessful applicants that the body would not proceed. Ayres’ policy adviser approved notifying the 12 nominees but not the broader applicant pool. “If you receive enquiries from these individuals we can deal with them on a case-by-case basis,” the adviser wrote. The email sent to the shortlisted candidates said the decision was “not a reflection on any individual or process undertaken to date” and that the government remained committed to “engaging with a wide range of stakeholders… in its ongoing response to AI”. Officials were also given prepared talking points in case nominees questioned the decision. Working out a response The talking points instructed staff to say the government had “carefully considered the appointments in light of the rapidly evolving landscape of AI” and that, given the pace of change, it was “prudent to consider how we can best access expert advice to inform future policy approaches”. If asked why the decision took 15 months, officials were told to point to a “rigorous and comprehensive process to identify candidates”. “While resources were dedicated to the nomination and selection process, the information and insights gathered will be valuable for shaping future consultations on AI policy development,” the brief said. In total, the Department spent $188,337 on the selection process, including advertising, recruitment, enhanced due-diligence checks and independent probity advice. The forthcoming AI Safety Institute will replace the advisory body. The government says it will test, monitor and identify gaps in AI regulation “if and as they emerge”, rather than relying “solely” on external experts. “Previous proposals for an AI Advisory Board have been superseded by a more dynamic and responsive approach to keeping Australians safe as AI is adopted across the economy,” a government spokesperson told ABC News. “The Department of Industry, Science and Resources and its ministers are continually engaging with a wide range of experts as they deliver that approach.” The scrapping of the advisory board coincided with a shift away from more regulations and a potentially stand-alone AI Act, towards a lighter-touch framework. The shift followed advice from the Productivity Commission which urged the government to only introduce new AI laws as a “last resort”, and to pause its work on the proposed AI guardrails. The commission found AI could boost the Australian economy by a $116 billion and lift productivity by 4.3 per cent over the next decade. Denham Sadler Denham Sadler is a freelance journalist based in Melbourne. He was previously Editor of StartupSmart, and writes on tech and politics. His work has been published in The Saturday Paper and The Guardian. Tags: ai advisory group ai safety institute australia government