CPA Australia has expressed support for the Productivity Commission’s cautious approach to regulating AI but highlighted a missed opportunity to recommend greater government investment in helping businesses leverage AI’s potential.

CPA Australia’s business investment lead Gavan Ord noted that the Commission’s second interim report, prepared for the Treasurer’s Economic Reform Roundtable, outlines a framework for future AI regulation.

However, it lacks focus on encouraging small and medium enterprises (SMEs) to adopt technology including AI.

Ord said: “This is definitely not an ‘if you build it, they will come’ scenario. The Commission’s report questions whether Australian businesses are already behind the curve internationally in the adoption of AI – and the answer is a categorical yes. 

“We needed the Commission to provide recommendations to government on incentives to help boost the uptake of technologies, including AI, as well as guidance on the benefits and practical support that businesses need to implement it.”

According to Ord, the report presumes that SMEs possess a degree of knowledge, expertise and capability that is often not aligned with their actual situation.

These businesses typically dedicate all their resources and energy to managing daily operations, leaving them with minimal opportunity to contemplate investing in new technologies, despite recognising the potential advantages such investments might offer, Ord added.

Citing CPA Australia’s annual Asia-Pacific Small Business Survey, Ord also pointed out that Australian small businesses trail behind their regional counterparts in technology adoption.

The survey revealed that only 26% of Australian small businesses invested in profitable new technology in the past year, compared to a survey average of 56% across 11 Asia-Pacific markets.

Survey data indicated that markets such as Singapore, Malaysia and Vietnam showed significantly higher technology adoption rates.

It also found that just 39% of Australian small businesses generate more than 10% of their revenue from online sales, against a regional average of 67%.

Additionally, only 18% of Australian small businesses sought advice from IT consultants or specialists last year, compared to the survey average of 28%.

Growth expectations are similarly subdued, with only 55% of Australian small businesses anticipating growth in 2025, compared to the Asia-Pacific average of 71%.

CPA Australia endorsed the Productivity Commission’s recommendation to mandate digital financial reporting for disclosing entities and urged the government to implement it gradually, starting with listed companies.

Ord added: “In addition to ensuring a sensible approach to AI regulation, the government should invest in supporting business growth by offering better incentives for the uptake of technologies than is currently the case, as well as providing educational programmes on how to benefit from it.

“This does not need to be an issue for the Treasurer’s roundtable.

“The benefits of digital financial reporting for businesses and the community more broadly are clear and already being evidenced around the world. A phased approach should begin as soon as it is practical to do so.”