This report outlines the forward-looking role that New South Wales policy-makers could take to respond to the unprecedented development and use of artificial intelligence (AI).

The NSW Government has already made substantial progress in assuring the government’s own use of AI by implementing the AI Assurance Framework for NSW Government projects. Now is a critical moment for the NSW Government to go further and enact a coordinated, considered response to the regulation, market shaping, and public sector capability uplift needed to manage this technology into the future.

AI impacts many policy areas where responsibility is distributed to state governments in Australia. In addition to regulation, this report explores the ways in which the NSW Government might constructively shape the future direction of AI technologies.

The report suggests a range of explicit policy opportunities for the NSW Government to consider. Fifteen detailed policy opportunities are outlined in the report. These include:

• creating an Emerging Technology Commissioner to facilitate responsible development and use of AI across NSW, and support the development of government and regulator capability in an efficient and cost-effective way;
• selectively using new regulatory tools for the private sector, including auditing and reporting requirements, and developing the NSW AI assurance industry to support this effort;
• using government’s existing levers, such as procurement, more effectively to drive responsible technology in the private sector;
• resourcing and explicitly encouraging the NSW AI Review Committee to publish educative case studies and assurance reviews communicating lessons from its work; and
• establishing a regulatory strategy, including reviewing gaps in existing legislation, and supporting regulators and government agencies to respond effectively to new AI-related challenges in their area of focus.

The primary audience for this report is policy-makers within the NSW Government, with the insights and policy pathways calibrated to focus on system-level reform. At the same time, this report is also intended to be a useful resource for other state and territory governments, the Commonwealth Government, as well as the broader policy community, community leaders, researchers, and other stakeholders.