Bots to help fill Victoria’s budget hole: State hopes AI can slash costs

Artificial intelligence and automation will be a cornerstone of the Victorian government’s $3.3 billion cost-slashing plan as Treasurer Jaclyn Symes pledges to free up public servants from repetitive and time-consuming tasks.

Symes told budget estimates hearings last week that automation and new technology would be key ways the government looks to make savings and create a more efficient public service. Asked if this meant losing jobs to AI, Symes said she “probably” wouldn’t characterise it like that.

Treasurer Jaclyn Symes says the government will reach savings targets partly through automation and AI. Credit: Joe Armao

“We’re not replacing humans with robots but we are certainly looking at efficiencies with technologies and ensuring that people can do their job as effectively as possible,” she said.

“In relation to the opportunities with AI, the ability for people to be assisted to do their job, I think there are some great opportunities in that respect.

“I know the Department of Government Services is leading the way in that regard. Freeing up people from repetitive tasks so they can really target their work into the things that matter most to the Victorian community, I think, is worthwhile work to do.”

The AI efficiency push comes after the government pledged to make $3.3 billion – the equivalent of 1200 jobs – in public sector savings over the forward estimates in last month’s budget. Symes has conceded the government is far too large and the state’s more than 500 entities and 3400 boards and committees need to be scaled back.

The State Revenue Office already uses AI to detect unpaid taxes and fraud, while staff also use the tools to process “routine administrative tasks” like meeting transcripts.

The new digital revamp will initially focus on making licensing and other government approvals smoother and faster, as well as fast-tracking students with prior experience through TAFE courses.

The Community and Public Sector Union has warned the government against using AI as a tool to cut costs and jobs, saying it should only enhance public servants’ work.

Despite the forecast savings, Victoria’s debt is expected to rise from $167.7 billion in 2026 to $194 billion in 2028-29, sitting at 24.9 per cent of gross state product, as the government pursues an expansive capital works agenda.

Symes did not provide details on the government’s plan to use AI, but budget papers reveal it is spending $11.1 million over four years to launch a “regulator digitisation and AI program”.

The program will focus on replacing paper-based or outdated digital processes, which would streamline licensing and other regulatory approvals.

The budget papers say a switch to automation has already significantly sped up the processing of solar rebates and utility relief grants.

The government also allocated $3 million for a pilot program to use AI to improve the recognition of prior learning for TAFE students, helping skilled workers bypass unnecessary training and fast-track their courses.

The funding comes after Labor MP for Narre Warren South Gary Maas last year announced a new “AI assistant”, which he said was to support constituents – especially during out-of-office hours. The chatbot is tailored to common questions and personalised to the Narre Warren South electorate.

Similarly, the State Revenue Office uses a chatbot that can answer general questions and basic information on how to access services.

The office has also deployed AI – or intends to – to chase up unpaid taxes and detect fraud by identifying patterns or anomalies in data.

The treasurer’s office was contacted for comment, but a spokesman did not respond to questions asking what specific savings would be made from the move to automation and how many jobs could be replaced by technology, or requests for more details on the proposed AI programs.

The spokesman said the government was committed to digital transformation and innovation, as well as the safe and responsible use of AI.

Victorian councils are also turning to AI to help improve planning applications and make it easier for residents to navigate.

MyLot is designed to help people navigate the planning system and get quick answers on whether they need a permit and if an application is likely to be approved.

The program has been introduced at Yarra Ranges Council, Bayside Council and Mornington Peninsula Shire Council, and will later launch at Boroondara and Moonee Valley city councils.

The Community and Public Sector Union has warned the government against using AI as a tool to cut costs and jobs, and says it should only be used to enhance public servants’ work.

Secretary Karen Batt said the government had not engaged in discussions with the union regarding AI’s potential impact on jobs or its role in driving efficiency.

“CPSU has encouraged the government to see AI and the productivity enhancements that AI can deliver as a way to increase the service levels it provides while holding expenditure at existing levels, rather than a way to keep the same level of services while reducing the workforce,” she said.

“We’ve raised concerns about the use of AI and the training provided to staff about it.”

Last year, the Victorian Information Commissioner ordered the Department of Families, Fairness and Housing to ban ChatGPT and a number of other AI websites, after a worker was found to have used the tool to draft a child protection application report after inputting private and highly sensitive information into it.

An investigation by the information commissioner found there was widespread use of ChatGPT within the department despite no specific training or guidance on generative AI being provided.

The state government released its policy on the safe use of AI in the Victorian public service in November, which included the requirement that only publicly available information could be uploaded to publicly available generative AI tools.

Victoria also signed up to the federal framework for the assurance of AI in government in June last year, which aims to create a nationally consistent approach by federal, state and territory governments.

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