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# Independent senator Pocock wants AI giants to pay data centre tax
- URL: https://www.bushletter.com/pocock-wants-ai-giants-to-pay-data-centre-tax/
- Published: 2026-10-21T19:30:00.000Z
- Updated: 2026-10-21T19:29:59.000Z
- Description: The independent senator says Microsoft's Australian data centre business took in $2.3 billion locally but paid no company tax, citing ATO figures.
- Author: Bushletter Newsroom
- Tags: Technology, Australia, Politics

TLDR

ACT independent senator David Pocock wants a five per cent levy on AI data centre revenues from 1 January 2027, targeting hyperscale facilities drawing more than five megawatts. Parliamentary Budget Office modelling put the four-year yield at just under $500 million, though flagged high uncertainty.

## A levy on hyperscale operators

ACT independent senator David Pocock proposed a five per cent levy on AI data centres' local revenue at the National Press Club in Canberra on 21 October 2026, with the charge set to commence on 1 January 2027.[\[1\]](https://www.davidpocock.com.au/national%5Fpress%5Fclub%5Faddress?ref=bushletter.com) The proposal targets hyperscale facilities drawing more than five megawatts, excluding colocation operators.[\[5\]](https://www.canberratimes.com.au/story/9372631/david-pocock-urges-5-tax-on-tech-giants-ai-data-centres/?ref=bushletter.com)

Pocock had the levy costed by the Parliamentary Budget Office, which modelled a four-year yield of just under $500 million through to the end of 2030, though flagged high uncertainty in its projections.[\[1\]](https://www.davidpocock.com.au/national%5Fpress%5Fclub%5Faddress?ref=bushletter.com) The government has not said whether it would support the levy.

## The revenue gap at the heart of the case

Pocock anchored his argument in a forecast $200 billion of data centre investment flowing into Australia, set against what he described as little to no corporate tax paid by foreign operators.[\[1\]](https://www.davidpocock.com.au/national%5Fpress%5Fclub%5Faddress?ref=bushletter.com)

Pocock said Microsoft's Australian data centre business generated $2.3 billion in local revenue but paid no company tax, according to the ATO's latest tax transparency report.[\[2\]](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/large-business/corporate-tax-transparency/report-of-entity-tax-information?=redirected%5Fentityinformationreport&ref=bushletter.com)

Pocock said the government had misjudged the situation. "Our Government seems starstruck by the US AI companies and blind to community sentiment and long-term costs if we get the AI policy settings wrong," he said.[\[1\]](https://www.davidpocock.com.au/national%5Fpress%5Fclub%5Faddress?ref=bushletter.com)

## Academy and RBA signal openness

The Australian Academy of Science had already called for a data centre levy in a submission to a parliamentary inquiry into artificial intelligence and data centres, nominating a rate of 2.5 per cent.[\[3\]](https://science.org.au/our-work/science-advice-policy/submissions-government/submission-inquiry-artificial-intelligence-data-centres?ref=bushletter.com) Pocock's proposed rate of five per cent is double what the Academy recommended.

Reserve Bank of Australia Deputy Governor Andrew Hauser weighed in on the broader question on the same day Pocock delivered his address. "How governments tax those companies, how they impose social norms on them is a hugely important, and very live in Australia, debate," Hauser said.[\[4\]](https://www.rba.gov.au/speeches/2026/sp-dg-2026-10-21.html?ref=bushletter.com)

## Senate path and the investment boom

The levy would need the support of the government or the opposition to pass the Senate. The Australian Academy of Science welcomed the proposal, AAP reported.[\[6\]](https://aapnews.aap.com.au/news/blind-to-community-independent-flags-data-centre-tax?ref=bushletter.com)

Amazon Web Services and Microsoft alone have pledged around $45 billion in local data centre investment, The Canberra Times reported.[\[5\]](https://www.canberratimes.com.au/story/9372631/david-pocock-urges-5-tax-on-tech-giants-ai-data-centres/?ref=bushletter.com) Pocock said US tech companies such as Microsoft, Amazon and Google pay effective company tax rates of 1 to 4 per cent.[\[1\]](https://www.davidpocock.com.au/national%5Fpress%5Fclub%5Faddress?ref=bushletter.com)

KEY TAKEAWAYS

01Pocock's five per cent levy targets hyperscale data centres drawing more than five megawatts of power.

02Parliamentary Budget Office costing put the four-year yield at just under $500 million.

03Pocock said Microsoft's Australian data centre arm earned $2.3 billion in local revenue but paid no company tax, citing the ATO.

04The Australian Academy of Science had already called for a 2.5 per cent levy before Pocock doubled the rate.

05RBA Deputy Governor Andrew Hauser called taxing data centre companies a 'very live' debate in Australia.

SOURCES & CITATIONS

1. [David Pocock National Press Club Address](https://www.davidpocock.com.au/national%5Fpress%5Fclub%5Faddress?ref=bushletter.com)
2. [ATO Corporate Tax Transparency Report](https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/large-business/corporate-tax-transparency/report-of-entity-tax-information?=redirected%5Fentityinformationreport&ref=bushletter.com)
3. [Australian Academy of Science submission on AI and data centres](https://science.org.au/our-work/science-advice-policy/submissions-government/submission-inquiry-artificial-intelligence-data-centres?ref=bushletter.com)
4. [RBA Deputy Governor Andrew Hauser speech, 21 October 2026](https://www.rba.gov.au/speeches/2026/sp-dg-2026-10-21.html?ref=bushletter.com)
5. [Pocock targets tech giants with proposed data centre tax, The Canberra Times](https://www.canberratimes.com.au/story/9372631/david-pocock-urges-5-tax-on-tech-giants-ai-data-centres/?ref=bushletter.com)
6. ['Blind to community': independent flags data centre tax, AAP](https://aapnews.aap.com.au/news/blind-to-community-independent-flags-data-centre-tax?ref=bushletter.com)

FREQUENTLY ASKED QUESTIONS

What does Pocock's levy actually cover?

The levy applies to AI data centres drawing more than five megawatts of power, targeting hyperscale operators. Colocation facilities are excluded from the proposal.

How much money would the levy raise?

The Parliamentary Budget Office modelled a yield of just under $500 million over four years to the end of 2030, though it flagged high uncertainty in that figure.

Has the government supported the levy?

No government backing has been confirmed.