Tuesday, 12 May 2026

 Danny PEARSON (Essendon) (10:28): I am delighted to make a contribution on the 2024–25 financial and performance outcomes, which is a Public Accounts and Estimates Committee report which was tabled in March of 2026. At the outset can I just say what a great privilege and honour it was to serve as the chair of this most august committee for four years. I would say to any member: if you have not had the opportunity to serve on PAEC, do yourselves a favour, get on board; you are going to love it. I just loved every moment as the chair of PAEC. But I digress.

I want to bring the house’s attention to chapter 8.6, investment in AI infrastructure, at pages 138 to 140. Why I think this is important is that if you go back to the mid-20th century, so much of Victoria’s wealth and prosperity was predicated upon manufacturing. We were the manufacturing heartland. Why were we good at that? We had industrial-zoned land close to Melbourne, we had access to energy and water and we had the skills. What you saw in the course of the 20th century was the rise of manufacturing, and we were the manufacturing heartland. If you go back to the early 1990s, as the tariff walls came down many of those manufacturers went broke. But because of the foresight of successive governments, that land has been preserved and protected as industrial-zone land. Why that is important is that we are not having the silly arguments they are having in New South Wales as to ‘Should you have industrial-zoned land for housing, or should you put it for an industrial purpose?’ Those matters have been dealt with. Why this is important is that data centres need access to power, access to water, a technically qualified workforce and ideally to be close to the CBD. That is exactly what we have got. And because of the work of this government, we have been able to create that level of investment. There are 188 AI firms within the Hoddle grid. We have got a pipeline of $25 billion worth of investment.

The naysayers will say there is not much in the way of employment creation with data centres, and that is true – most data centres might have 200, 300 workers – but it is the capacity that they unleash. Data centres will be to the 21st century what the rail lines were to industrial England. Again, similar comparisons – you have a significant capital investment, you have a relatively low employment base, but what you do is you unleash capacity. What we are doing here in Victoria is we are bringing in that capital – we are crowding in that capital, and we have the opportunity.

Tonight, when they go to bed in Silicon Valley, it will be about lunchtime here in Melbourne. There is this capacity to be able to have the workstreams and workflows flow from the United States of America to Australia. The other point to make in relation to the benefits of Victoria is that we are a temperate climate and our energy prices are lower than, say, New South Wales. With a data centre, you have got two choices – you can either use water for a coolant or use air. Water is 40 per cent more efficient than air as a coolant. If you look at, say, some of the big data centres, like CDC, they have got 900,000 litres of water in a closed loop to make sure that they only use that water once. The capacity that we have – the great potential that we have – is that we can start to service the Asia-Pacific region. For the first time ever tokens are now positive, they are profitable, and there is an opportunity for us to be able to export tokens into the Asia-Pacific region. Currently, when you use AI, it takes about 250 milliseconds for that request in Claude or ChatGPT to go to a data centre in America. We have got the capacity to service the Asia-Pacific region, one of the fastest growing regions in the world, and to do it within 50 milliseconds. That is going to improve the user experience; that is going to increase the capacity.

The real opportunities for AI are in the ways in which we can harness and utilise AI to play to our competitive strengths, like food and fibre, like agriculture and like international education. These are the benefits and the great promise that it holds. But we have got to get it right, and we have got to make sure that we do not leave people behind. That is why we want to ensure that people have that capacity to be trained up and skilled up. We have got to get in front of this, because the reality is AI is all around us. The notion that you can do what the EU has done in the past, which is to try to control it via regulation, just does not make sense. This thing is moving faster than parliaments can move. What we have to do – we have got to have a principles-based approach, we have got to make sure that we are investing in our talent, we have got to try and crowd in the capital and we have got to try and grow the economy. The reality is that the national accounts showed in December of last year that Victoria was leading the nation in terms of new private capital formation, and a key driver of that is the data centre investments. This is our moment. This is our time. We cannot hesitate. We cannot dither. If we halt or pause, we lose. Let us go forward with confidence.