AI and Automation Enhance Victorian Budget Efficiency

Published Date : 09/06/2025 

The Victorian government is leveraging artificial intelligence and automation to achieve significant cost savings, aiming to free up public servants from repetitive tasks and enhance service delivery. 

Artificial intelligence and automation will play a crucial role in the Victorian government's ambitious $3.3 billion cost-saving plan. Treasurer Jaclyn Symes has outlined her vision for using technology to make the public service more efficient, while ensuring that human roles remain central.

Symes addressed budget estimates hearings, emphasizing that automation and new technology would be key to achieving these savings. When asked if this meant replacing jobs with AI, she clarified, “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.”

The Department of Government Services is leading the way in this initiative. The goal is to free up public servants from repetitive tasks, allowing them to focus on more impactful work that directly benefits the Victorian community. The AI efficiency push follows the government's pledge to make $3.3 billion in public sector savings over the forward estimates, equivalent to 1200 jobs.

The State Revenue Office has already been using AI to detect unpaid taxes and fraud, as well as to process routine administrative tasks like meeting transcripts. The new digital transformation will initially focus on streamlining licensing and other government approvals, as well as fast-tracking students with prior experience through TAFE courses.

Despite the forecast savings, Victoria’s debt is expected to rise from $167.7 billion in 2026 to $194 billion in 2028-29, representing 24.9 per cent of gross state product. This is due to the government's expansive capital works agenda. Symes did not provide specific details on the AI plan, but budget papers reveal a $11.1 million investment over four years for a “regulator digitisation and AI program.”

This program will replace paper-based or outdated digital processes, streamlining licensing and regulatory approvals. Automation has already significantly sped up the processing of solar rebates and utility relief grants. Additionally, the government has 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.

Labor MP for Narre Warren South, Gary Maas, introduced an “AI assistant” last year to support constituents, especially during out-of-office hours. This chatbot is tailored to common questions and personalized to the Narre Warren South electorate. The State Revenue Office also uses a chatbot for general queries and basic information.

The treasurer’s office was contacted for comment, but a spokesman did not respond to questions about specific savings from the move to automation or the number of jobs that could be affected. However, the government remains committed to digital transformation and the safe and responsible use of AI.

Victorian councils are also adopting AI to improve planning applications and make it easier for residents to navigate. MyLot, a program designed to help people understand the planning system and get quick answers on permit requirements, has been introduced in several councils, including Yarra Ranges, Bayside, and Mornington Peninsula.

The Community and Public Sector Union (CPSU) has warned the government against using AI as a tool to cut costs and jobs. Secretary Karen Batt emphasized that the government should use AI to enhance service levels while maintaining expenditure at current levels, rather than reducing the workforce. The union has raised concerns about the lack of training and guidance provided to staff regarding AI.

Last year, the Victorian Information Commissioner ordered the Department of Families, Fairness, and Housing to ban ChatGPT and other AI websites after a worker used the tool to draft a child protection application report, inputting private and sensitive information. An investigation found widespread use of ChatGPT within the department, despite the absence of specific training or guidance on generative AI.

In response, the state government released a policy on the safe use of AI in the Victorian public service in November, which includes the requirement that only publicly available information can 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, aiming to create a nationally consistent approach by federal, state, and territory governments. 

Frequently Asked Questions (FAQS): 

Q: What is the Victorian government's plan to save $3.3 billion?

A: The Victorian government plans to achieve $3.3 billion in public sector savings over the forward estimates by leveraging artificial intelligence and automation, focusing on streamlining processes and reducing repetitive tasks.

Q: How is the State Revenue Office using AI?

A: The State Revenue Office uses AI to detect unpaid taxes and fraud, as well as to process routine administrative tasks like meeting transcripts.

Q: What is the MyLot program?

A: MyLot is a program designed to help residents navigate the planning system, providing quick answers on permit requirements and the likelihood of application approval. It has been introduced in several Victorian councils.

Q: What concerns does the Community and Public Sector Union have about AI?

A: The Community and Public Sector Union warns against using AI to cut costs and jobs, emphasizing that AI should enhance public servants’ work and improve service levels without reducing the workforce.

Q: What is the Victorian government's policy on the safe use of AI?

A: The Victorian government's policy on the safe use of AI, released in November, requires that only publicly available information can be uploaded to publicly available generative AI tools, ensuring the responsible use of technology. 

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