Australia’s AI job impact still hard to find, Treasury report finds

AI has yet to have a broad impact on employment in Australia, even though it is expected to be a defining influence on the country’s economy over the next 40 years, according to the Australian Treasury’s 2026 Intergenerational Report (IGR).

The report, released on 21 September, sets out Australia’s economic outlook to 2066. “Advances in AI represent the most dramatic change since the last IGR in 2023, and we’re acting now to maximise the opportunities and minimise the serious risks it presents,” said Treasurer Jim Chalmers.

Inside businesses, however, adoption remains shallow. Two-thirds of businesses in Australia report using AI in some form, but fewer than 10% describe that adoption as significant. Treasury also points to low trust in the technology among employees, consumers and businesses, which helps explain why measured productivity gains have been modest so far.

The Department of Employment and Workplace Relations (DEWR), which monitors AI’s effects on jobs, has not found evidence of broad impacts. It has seen early signs of modestly slower employment growth in the most exposed occupations, including accountants, receptionists, and advertising and marketing professionals. Aged and disability carers, electricians and truck drivers are among the least exposed.

Modelling by Jobs and Skills Australia puts about 4% of the current workforce in occupations with high automation exposure, against 79% with low exposure. The agency sees greater potential for jobs to be augmented than automated.

International evidence has pointed to falling employment among young employees in exposed roles such as software development and customer service. The report cautions that these effects are hard to separate from remote work and the business cycle. In Australia, the labour market for young employees and recent graduates is not yet showing measurable impacts.

Treasury expects AI’s effect on labour demand to vary by task. Most jobs combine work that AI can take on with work that depends on human judgement, coordination, accountability and relationships. How readily those tasks can be pulled apart will shape how quickly AI is adopted, and many jobs will be redesigned in the process.

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The report places employers at the centre of that change. It describes businesses as the primary implementers of AI adoption, responsible for training, job redesign, skills development and workplace protections. It also flags possible risks to job quality, work health and safety, and employee wellbeing. In-demand skills are expected to range from foundational AI literacy to specialist technical expertise, along with critical thinking, communication, and change management.

At the policy level, the AI Employment and Workplace Forum, which brings together government, employers and unions, is developing best-practice guidance on adopting AI in ways that build trust at work.

Demographic change adds a second source of workforce pressure. Treasury has substantially upgraded its participation projections, led by women and older Australians. The participation rate for people aged 65 and over is about one percentage point higher than projected in 2023. Overall participation is expected to peak at 67.7% in 2039-40 and then ease as the population ages. The number of Australians aged 85 and over is projected to triple by 2065-66, adding to demand for care services.