Australia’s Productivity Commission has put forward a suggestion that artificial intelligence companies can use copyright-protected material for training their AI models. This was a way to increase the productivity and power of attraction for foreign investment.
Those who were in favour of it argued that the AI models, if trained on local material, would be more mature and thus would be able to perform better economically.
The commission stated that the exemption would be a fair deal for the local tech industries that are using Australian data in the same manner as foreign ones. The plan was to slow down innovation and, at the same time, make Australia the global AI hub.
AI firms may use copyrighted material to train models.
What Triggered The Fierce Backlash From Creative Industries?
The music, publishing, and artistic communities were the main forces resisting the plan strongly. The industry groups alerted that the proposed law would be taking the door of digital piracy into the website of productivity.
The Australian music industry maintained that it would reduce the power of creators over their works and would also harm the economic sector of culture. The critics also pointed out that the proposal might be adversely influencing those industries that already contribute a lot to the Australian GDP and are the source of thousands of jobs.
Many creators stressed the point that copyright protection should remain in place to prevent the market of the creative sector from collapsing.
When Did The Government Withdraw The Proposal?
The Australian government, in October 2025, announced that it was not going to embrace the suggested exemption. Rather, the Productivity Commission advised a review of the copyright law impacts of AI usage in three years.
The officials asserted that the current copyright laws cover the situation and that any changes to them should come after the observation of worldwide trends. They also pointed out the danger that the exception may create unforeseen problems for the creators and the whole of the creative economy.
Australia will delay AI copyright changes; review set for 2028.
Creative Industries Push Back Against AI Copyright Changes
The decision to eliminate the copyright exemption was celebrated by Australia’s creative sectors. The leaders of various industries said it was a powerful reinforcement of the creators’ argument, which has always maintained that the present-day copyright regime is ideal.
Music and arts groups observed that the licensing market for AI training rights is already in place and should be allowed to develop further on its own. The result was interpreted as a victory for creative rights and a reaffirmation of the importance of intellectual property.
Commission Highlights Uncertainty In AI Policy Design
The Productivity Commission pointed out the main uncertainties that impacted the AI and copyright policies. These main points included the different ways in which countries have been dealing with copyright exemptions in connection to AI, the impact to be made on the incentives for the new creative works, as well as the question of whether there would be a natural development of voluntary licensing.
The commissioners indicated that it will be necessary to observe the situation cautiously in order not to make hasty legal changes. This approach is in line with global discussions on the need for a balance between innovation and copyright protection and providing support to the creative economy.
Commission notes AI copyright uncertainties and global policy variations.
Australia’s Broader Economic Reform Context
The copyright revision was part of a bigger package of five inquiries meant to boost national labour productivity. The inquiries cover human resources, digital technology, taxes, and so on.
The commission’s officials estimated that if productivity growth is increased to the historical levels, living standards by the year 2035 will be significantly improved. The copyright proposal for AI was one element of a wider strategy to maintain Australia’s global competitiveness in digital thickness.
Frequently Asked Questions
Q1: What did the Productivity Commission originally propose?
It proposed a copyright exemption allowing tech companies to utilise Australian copyrighted material for AI training.
Q2: Why did creative industries oppose the plan?
According to industry associations, it would give a free pass to digital Copyright violations and furnish defenders of the creators with weaker protection.
Q3: What will happen next under the new plan?
The commission put forth the recommendation to postpone for three years the copyright settings review for AI.
Q4: Does the decision affect current AI models using Australian content?
The prevailing copyright laws remain in force, and any use of copyrighted materials has to be in accordance with the existing licensing or legal frameworks.
