Independent senator Pocock wants AI giants to pay data centre tax

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] The proposal targets hyperscale facilities drawing more than five megawatts, excluding colocation operators.^[5]

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] 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]

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]

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]

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] 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]

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]

Amazon Web Services and Microsoft alone have pledged around $45 billion in local data centre investment, The Canberra Times reported.^[5] Pocock said US tech companies such as Microsoft, Amazon and Google pay effective company tax rates of 1 to 4 per cent.^[1]