TLDR
Treasury analysis finds AI could add $116 billion to Australia's GDP over a decade, but adoption sits at just 12 per cent of businesses. RBA liaison data shows nearly 40 per cent of firms that have adopted AI report minimal use, concentrated in basic tasks.
KEY TAKEAWAYS
The $116 billion productivity gap
Treasury analysis estimates AI could boost Australia's labour productivity growth by 4.3 per cent over the next decade, adding approximately $116 billion to GDP and $4,300 to per capita incomes.[1] That is the prize on offer. Barely anyone is collecting it.
Adoption data from the Australian Bureau of Statistics tells the story plainly. In 2024-25, just 12 per cent of Australian businesses reported using AI, up from 1 per cent in 2022-23.[2] A twelvefold increase sounds dramatic. Twelve per cent still means most of the economy is sitting out.
Shallow uptake compounds the problem
The headline adoption figure flatters the reality. Reserve Bank liaison surveys found that two-thirds of firms had adopted AI in some form, yet nearly 40 per cent of those reported minimal use, while less than 10 per cent had no plans to adopt at all.[3] Around 30 per cent reported moderate or substantive adoption. The rest are summarising emails and calling it a strategy.[3]
Treasury and RBA research identify the same pattern: most firms are reaching for off-the-shelf AI to handle basic administrative tasks, while deeper integration into core business processes stays limited. That gap between dabbling and deploying is where the productivity dividend gets left behind.
The size divide matters
ABS data breaks the adoption story open further. Among innovation-active businesses, the AI uptake rate was 20 per cent in 2024-25, against 6 per cent for non-innovation-active firms.[2] Drill into firm size and the spread widens. Large businesses adopted at 37 per cent, small businesses at 19 per cent, medium businesses at 28 per cent.[2]
Australia has roughly 2.6 million small businesses. If productivity gains concentrate among large operators already running at scale, the economy-wide impact shrinks, and Treasury's $116 billion projection stays a projection.
What the government is saying
Treasurer Jim Chalmers has framed the stakes without qualification. Chalmers said AI is a transformative technology, probably the most transformational technology that people will see in their lifetimes, with the capacity to speed up and complete so many tasks essential to making the economy more dynamic, more productive, and more competitive.[4]
Assistant Minister for Productivity Andrew Leigh pointed to separate survey data suggesting SME adoption may be running ahead of ABS figures. "It found that 42 per cent of SMEs are using AI, with another 14 per cent planning to adopt it. The top uses include administration, marketing and decision-making, and the biggest benefit reported is time back for business or family."[5] The methodological differences between Leigh's survey and the ABS business count remain unexplained.
Treasury's own modelling makes the directional case clearly: diffusion drives most productivity gains, and Australia's track record on technology diffusion has been patchy. The ABS puts current business adoption at 12 per cent. Treasury's $116 billion estimate assumes the number climbs substantially from there.
SOURCES & CITATIONS
FREQUENTLY ASKED QUESTIONS
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Jonas Valenti writes about search and how businesses get discovered. He has spent years watching what makes a company visible online, and is unsentimental about tactics that no longer work.
