NSW Government Bulletin: Use of generative AI in government – key considerations for agencies

As government agencies increasingly use artificial intelligence (AI) tools to support service delivery, policy development and internal operations, it is important to remain vigilant about the potential risks that may arise from AI-generated outputs.

Automation does not equal accuracy. AI tools can produce false, exaggerated or biased information, especially when prompted with misleading or poorly structured instructions. A single inaccurate or inappropriate AI-generated response can undermine public trust, damage reputation and, in some cases, expose the agency to legal and ethical risks.

Potential liability when using AI in government

Unlike private businesses, government agencies operate under heightened obligations of transparency and accountability and are ultimately responsible for the information they publish or rely upon, even if it originates with help from an AI tool.

Key risks for those in government include:

• breach of secrecy provisions and government protocols
• infringement of third-party copyright, for example if the AI tool created an image or other content that reproduced copyrighted material from its training data, the original copyright holder could pursue an infringement claim
• provision of false or misleading information to customers
• provision of outputs that are defamatory (particularly if outputs are not properly checked)
• bias and discrimination, for example if training data or algorithms have pre-existing biases
• lack of transparency and accountability, which can make it difficult to explain, audit or justify decisions
• automation of decision-making, potentially leading to administrative law challenges

In practice, much will depend on the tool being used and the contractual terms governing its use. Most providers of publicly available generative AI platforms, such as ChatGPT, exclude any liability for the outputs their tools generate. This means that if something goes wrong, an agency is unlikely to have meaningful recourse against the supplier. If the platform is being engaged directly by the agency, though, or as part of a whole of government procurement, there is more scope to make sure the procurement of platform meets the needs of the agency and builds in protections like any other ICT procurement.

Key considerations when using AI tools

Agencies currently using or planning to introduce AI tools should consider the following:

• supplier familiarity – does the supplier have experience working with government or public sector agencies? If they are based overseas, is support available during your business hours and will this comply with your data sovereignty obligations or preferences?
• functionality – do staff understand how the tool operates? Has training been arranged for those without the required knowledge?
• data source – what datasets has the tool been trained on? Do they include copyrighted, biased or unreliable information?
• data handling and control – how will the supplier use information entered into the tool, particularly protected information or classified government information? Does this align with obligations under the privacy and secrecy laws?
• scope of decision-making – what decisions will the tool assist with? Is there human oversight for highly sensitive or important decisions?
• traceability and transparency – can the agency trace and justify the tool’s reasoning from input to output? Have outputs been tested for accuracy?
• accountability – who within the agency is ultimately responsible for AI-generated outputs? Are policies and record-keeping practices in place to support accountability if issues arise?

The future of AI in government service delivery

AI will continue to play a key role in improving government service delivery, policy outcomes and overall productivity. The federal government recently released its AI Plan for the Australian Public Service, which will give government employees access to generative AI tools, and training and guidance on handling government information when using existing platforms such as ChatGPT, Claude and Gemini. The plan also includes appointing a Chief AI Officer in every federal agency in 2026.

We expect this plan to complement existing guidance at the state government level, including the Victorian Government’s Guidance for the safe and responsible use of generative AI in the Victorian public sector and the NSW Government’s three pillars approach, an overall strategy supported by an ethics policy and an assessment framework.

These frameworks emphasise the need for agencies to conduct thorough assessments to ensure transparency and accountability. Before deploying any AI tools, agencies should review its functionality, training data and governance controls and put clear policies and human oversight in place to manage any legal risks.

If you have any questions about the use of AI or its associated legal risks, please contact us here. 

Authors: Dan Pearce & Emily Booth

$2m boost for NSW Crown Reserves Improvement Fund

The NSW Government has announced a major boost to the 2025–26 Crown Reserves Improvement Fund to support upgrades and maintenance across the state’s Crown land reserves. Funding has increased to $13.5 million, more than $2 million higher than last year. “The Minns Labor Government is committed to building better communities across NSW and the Crown Reserves Improvement Fund keeps public reserves safe, vibrant and accessible,” said Minister for Lands and Property, Steve Kamper. Read more here.

NSW launches Working Women’s Centre to support against discrimination and harassment

A new centre for women in NSW will help ensure women have access to legal advice and representation on workplace issues. On Friday, the NSW Working Women’s Centre was officially launched by Minister for Women Jodie Harrison and Federal Assistant Minister for Social Services and the Prevention of Family Violence Ged Kearney, with Women’s Legal Service CEO Katrina Ironside. The Minns Labor Government has invested $8 million over four years into the Centre, which will provide free legal advice and support to women in the workplace, education and training to businesses and staff, as well as working to enhance workplace safety for women across the state. Read more here.

“Shockwaves through the market:” NSW slashes peak demand reduction target amid home battery rebate fallout

The New South Wales government has slashed the 2026-27 target for the Peak Demand Reduction Scheme (PDRS) to 0.5 per cent, down from 7.5 per cent, in a drastic bid to help the state market adjust to the impact of the federal battery rebate. The dramatic cut to the 2026-27 target was announced by the NSW government announced on Friday in response to forecasts of a major shortfall in Peak Reduction Certificates (PRCs) and to avoid inflicting widespread penalties on scheme participants. The PRC price dropped from $2.86 on Friday to around $2.60. Read more here.

Strap in for a feral lead-up into Christmas in the NSW parliament

The Minns Labor government has two major pieces of legislation it desperately wants to pass before parliament rises. But it faces obstacles in the upper house where a clutch of minor parties hold the balance of power. The first is the bill to streamline the planning system. The changes have been billed as necessary to fast-track major housing projects, but it’s become clear that the bill could also apply to mining and energy projects. The Greens say it gives the planning minister unprecedented powers to decide that the public interest or environmental matters can be ignored. That’s why they are opposing the bill and calling for significant amendments. Read more here.

NSW Government delivers response to the 2024 Drug Summit Report

​​The NSW Government has today formally responded to the 2024 Drug Summit recommendations, building on its commitment to reform the state’s whole-of-government approach to alcohol and other drug use, which will place harm reduction and wellbeing at the forefront of policy. The 2024 Drug Summit, chaired by John Brogden AM and Hon. Carmel Tebbutt, delivered 56 recommendations to the NSW Government earlier this year. This followed extensive consultation with a range of stakeholders including health experts, police, people with lived and living experience, service providers and community members. Read more here.

Social housing overhaul

NSW is making the largest investment in social housing in the state’s history with the government committing $6.1 billion to fund a ten-year strategy that aims to “transform the system”. The strategy sets out a vision “to deliver quality homes and services that change lives and end homelessness – and is a bold commitment to ending housing insecurity and homelessness in our state,” Homes NSW CEO Rebecca Pinkstone said. “It’s a clear roadmap for generational reform, designed to transform the social housing and homelessness system,” she added. The investment will “directly build thousands of new homes, repair the ones we have, and restore pride in public housing,” said Minister for Housing Rose Jackson. Read more here.

NSW e-bike Bill

The NSW Government is introducing Australia-first shared bike scheme legislation. The Bill was introduced in response to a parliamentary inquiry held in 2024 into the use of e-bikes, e-scooters, and other micromobility devices in NSW. The inquiry recommended the government set “consistent safety, operational and accessibility standards.” This prompted the government to review how sharing schemes operate and commit to establishing an “appropriate and robust” regulatory framework. Read more here.

Wilsons Creek Road repairs underway, say govt

A key stretch of Wilsons Creek Road between Upper Wilsons Creek Road and Alidenes Road in Byron Shire will become more resilient to future weather events, says the NSW government. They say in a media release is cost almost $10.7 million in combined disaster recovery funding. ‘Devastated in the 2022 floods, Wilsons Creek Road is the only evacuation route for the hinterland communities in Wilsons Creek and the adjoining valley areas of Upper Wilsons Creek and Huonbrook/Wanganui’. Read more here.

New bus services for Western Sydney

Transport for NSW is introducing new bus services to connect Penrith, Oran Park, Campbelltown, Liverpool, Mount Druitt and Leppington with local centres, the Western Sydney International Airport and the emerging Bradfield City Centre. The new services will commence ahead of the new Airport opening in 2026. Read more here.

Reimagining Pyrmont Peninsula reaches new heights

The City of Sydney has endorsed changes to planning rules for Pyrmont and Ultimo that will exceed state government targets for homes and jobs, following extensive public consultation. These proposals follow the NSW Government’s Pyrmont Peninsula Place Strategy which introduced new housing and job targets for the area ahead of the new metro station opening in early 2030. City planners worked closely with residents and ratepayers in Pyrmont and Ultimo throughout the consultation process to shape the proposed planning controls. Read more here.

Rooftop solar initiative for NSW apartments

The Australian and NSW governments are helping more NSW apartment residents access rooftop solar. The NSW Solar for Apartment Residents (SoAR) Grant Program provides funding to body corporates. This can be used to install shared rooftop solar systems on eligible apartment buildings and other multi-unit dwellings in NSW. The Australian and NSW governments are partnering to provide $25 million for the program. An eligible applicant under the program must be either a NSW residential owners corporation or a strata managing agent. Read more here.

Construction starts on $200 million Bathurst Hospital Redevelopment

The Minns Labor Government has today marked the start of construction on the $200 million Bathurst Hospital Redevelopment, a major milestone in delivering enhanced health services for Bathurst and surrounding communities. The $200 million redevelopment will provide patients, staff and carers with access to modern health facilities and expanded healthcare services to meet the future health needs of the communities in the Central West of NSW. Read the ministerial media release here.

School infrastructure projects booming in Sydney’s South West

One of the largest school building delivery programs in the history of South West Sydney’s growth region is taking off with major work now underway to deliver new and upgraded schools and preschools across the Camden and Leppington electorates. Ahead of a community cabinet meeting, Premier Chris Minns, Acting Minister for Education and Early Learning Courtney Houssos, and the Member for Camden Sally Quinnell met with Gregory Hills Public School students who will attend the new Gledswood Hills High School once it opens. Read the ministerial media release here.

Practice and the courts

New NSW regional jobs board to boost access to justice in rural, regional and remote communities.
Less than 5,000 solicitors in the state are based in rural areas. A regional jobs board has been established to draw solicitors to country NSW, bolstering access to justice in that part of the state. The platform, Careers in the Country, is free and open to Law Society member practice principals for the listing of job vacancies for solicitors and legal support staff in their areas. The board will also publish listings for rural-based Office of the Director of Public Prosecutions, Aboriginal Legal Service NSW/ACT and Legal Aid NSW roles. Read more here.

Text and data mining exception will not be included in potential copyright law reforms: government
The federal government has confirmed that it will not consider including a text and data mining exception in potential amendments to Australia’s copyright laws. Technology sector stakeholders had sought a broad exception that would grant AI developers free access to the works of Australian creators. They would also be able to use the information to train AI models without requiring creators’ consent. The government rejected the pitch, saying that it would support and provide certainty to creatives in Australia. Read more here.

A Framework for solicitor career success
A new resource for NSW’s 43,000 solicitors will help them improve the enduring human skills and behaviours they need to build and maintain a flourishing career in the law, and provide better legal services to the public. President of the Law Society of NSW Jennifer Ball said the Solicitor Capability Framework will better equip the legal profession with the capabilities needed to thrive in practice today and into the future. Read more here.

NSW introduces legislation to change magistrate title to judge
Joining the Northern Territory’s Local Court and Federal Circuit Court of Australia, which have switched the magistrate title to judge, the New South Wales government has introduced legislation permitting the recognition of Local Court magistrates as judges. The NSW department said the amendments aim to reflect the nature, volume, and importance of the Local Court’s work. Read more here.

Publications

Supported decision-making for people living with dementia in NSW
The NSW parliament have published a paper on how legal frameworks in NSW shape decision-making for people living with dementia, given the challenges posed by progressive cognitive decline. It considers traditional surrogate decision-​making models and the supported decision-making approach, which aligns with A​ustralia’s obligations under the Convention on the Rights of Persons with Disabilities. Access the paper here.

Committee on the Ombudsman, the Law Enforcement Conduct Commission and the Crime Commission
Committee on the Ombudsman, the Law Enforcement Conduct Commission and the Crime Commission, have released their annual report. The have made two recommendations two findings to address or elevate issues we found in this year's review. Our first recommendation is that the NSW Government consider amending the Law Enforcement Conduct Commission Act 2016 (NSW). We would like to see amendments to the Act to clarify and consolidate the Law Enforcement Conduct Commission’s (LECC) powers to access NSW Police Force material. This would enable the LECC to undertake its statutory role more efficiently and effectively. We have also recommended that the Inspector of Custodial Services (ICS) improve its reporting by including more information on agencies’ responses to recommendations in its reports. The reports of the ICS are intended to examine the conditions, treatment and outcomes of adults and young people in custody in NSW (23 October 2025). Access the report here

Review of the Health Care Complaints Commission’s 2023-2024 annual report
A new report has presented further findings and recommendations to improve the Health Care Complaints system. A range of recommendations were provided surrounding complaint management, support for complainants, support for health practitioners and strategic planning and organisational culture. Recommendations include hiring more Aboriginal identified staff, to improve the committee’s relationship with Multicultural NSW to engage more effectively with culturally and linguistically diverse communities and seek health practitioners’ input on specific support and resources that could be made available to practitioners who are subject to complaint and investigation (29 September 2025). Access the report here.

Net zero and circular economy guidelines for transport operations
Transport for NSW have published guidelines for transport operations. By 2030, the transport sector is projected to become Australia’s largest single source of emissions. In NSW, transport fuel combustion contributed approximately 28 million tonnes of carbon dioxide equivalent (tCO2e) emissions in 2019. Transport for NSW activities account for 5% of these transport sector emissions, primarily through its operational activities and various vehicle fleets. Recognising this, Transport has published a Net Zero and Climate Change Policy, setting prescriptive targets for Transport Operations to align with and support the NSW Government’s economy-wide decarbonisation commitments (25 September 2025). Read more here.

Collection, transport and disposal of waste
SafeWork NSW has drafted the new Collection, transport and disposal of waste code of practice. We are proposing the new code will replace the 2005 Collection of domestic waste code of practice. Following consultation with stakeholders, we have drafted the code to better meet modern safety standards and new ways of working. The new code provides information and guidance to make sure risks from the collection, transport and disposal of waste are managed according to current work health and safety laws. Responses are invited until November 9^th 2025. Read more here.

Cases

La Perouse Local Aboriginal Land Council v Quarry Street Pty Ltd [2025] HCA 32

Aboriginal and Torres Strait Islander peoples – land rights – Claimable Crown lands – where land claimed under s 36(2) of Aboriginal Land Rights Act 1983 (NSW) ("Act") subject to lease granted by Crown – where lessee had not undertaken purposeful activity on land – where "claimable Crown lands" in s 36(1) of Act means lands vested in Crown that are "not lawfully used" – whether land "lawfully used" for purpose of s 36(1)(b) of Act merely because land subject to existing lease from Crown.

Aboriginal Land Rights Act 1983 (NSW), Pt 2, ss 4(1), 36, Sch 4, cl 8; Conveyancing Act 1919 (NSW), ss 7(1), 117, 118, 119; Crown Land Management Act 2016 (NSW), ss 1.5(1), 1.7(a), 1.10, 1.12, 3.3, 3.13(1); Crown Lands Act 1989 (NSW), ss 3(1), 80(1), 87(1), Sch 7; Crown Lands Consolidation Act 1913 (NSW), s 5(1); Interpretation Act 1987 (NSW), ss 3(3), 5, 6, 8(c), 13, 68(3), Sch 4; Native Title Act 1993 (Cth), ss 10, 184, 186(1)(e), 223(1), 225, 253; Real Property Act 1900 (NSW), ss 3(1)(a), 13(2), 13D, 13J, 40(3), 42(1), 46C.

Morgan and Hughes v Ballina Shire Council [2025] NSWLEC 127

CIVIL PROCEDURE: separate determination of questions – questions concern permissibility of proposed development of tourist accommodation – applicable legal principles – separate questions ordered.

Ballina Local Environmental Plan 1987, cll 9(2), 12, 28; Civil Procedure Act 2005, s 56; Environmental Planning and Assessment Act 1979, s 4.22; Uniform Civil Procedure Rules 2005, r 28.2

Independent Liquor and Gaming Authority v Burwood RSL Club Ltd [2025] NSWCATAP 279

ADMINISTRATIVE LAW – administrative review – approval to remove club licence to new premises – whether decision to impose conditions on licence is an administrative reviewable decision

WORDS AND PHRASES – meaning of “in relation to”

Administrative Decisions Review Act 1987 (NSW), ss 7, 9, 55, 63; Civil and Administrative Tribunal Act 2013 (NSW), ss 4, 30, 32, 80, 81, 83; Gaming and Liquor Administration Act 2007 (NSW), ss 4, 13A, 36A; Gaming and Liquor Administration Regulation 2008 (NSW), cl 5B (repealed); Gaming and Liquor Administration Regulation 2016 (NSW), cl 7 (repealed); Gaming and Liquor Administration Regulation 2024 (NSW), cll 2, 4, 10; Gaming Machines Act 2001 (NSW), ss 34, 88, 95A, 101, 102, 104; Interpretation Act 1987 (NSW), s 34; Liquor Act 2007 (NSW), ss 7, 10, 11, 12A, 12B, 20, 44, 45, 49, 53, 59

Cicolini v Transport Secretary [2025] NSWIRComm 1095

WORKERS COMPENSATION – protection of injured workers – application to Industrial Relations Commission for reinstatement – whether worker fit for reinstatement sought

Industrial Relations Act 1996, s 84; Workers Compensation Act 1987, Part 8

Deputy Secretary, Local Government, under delegation from the Secretary, Department of Planning, Housing and Infrastructure v Thaler; Thaler v Deputy Secretary, Local Government, under delegation from the Secretary, Department of Planning, Housing and Infrastructure [2025] NSWCATOD 146

OCCUPATIONS – local government councillor – whether Tribunal has jurisdiction to grant interlocutory injunction restraining Secretary from exercising power to suspend councillor for misconduct – whether, if within jurisdiction, interlocutory injunctive relief sought by councillor should be granted

Civil and Administrative Tribunal Act 2013 (NSW); Local Government Act 1993 (NSW); Supreme Court Act 1970 (NSW)

Legislation

Proclamations commencing Acts

Suicide Prevention Act 2025 No 55 (2025-582) – published LW 31 October 2025

Tobacco Legislation (Closure Orders) Amendment Act 2025 No 51 (2025-583) – published LW 31 October 2025

Water Management Amendment (Water Access Licence Register Reform) Act 2024 No 69 (2025-584) – published LW 31 October 2025

Regulations and other miscellaneous instruments

Biosecurity Amendment (Miscellaneous) Regulation 2025 (2025-585) – published LW 31 October 2025

Electricity Supply (General) Amendment (Peak Demand Reduction Targets) Regulation 2025 (2025-586) – published LW 31 October 2025

Environmental Planning and Assessment (Development Certification and Fire Safety) Amendment (Building Sustainability Index Certificates) Regulation 2025 (2025-587) – published LW 31 October 2025

Fair Trading Amendment (Penalty Notice Publications) Regulation 2025 (2025-581) – published LW 29 October 2025

Final Determination [Biodiversity Conservation Act 2016] (2025-588) – published LW 31 October 2025

NSW Greyhound Racing Rules (2025-589) – published LW 31 October 2025

Passenger Transport (General) Amendment (Converted E-bike Batteries) Regulation 2025 (2025-590) – published LW 31 October 2025

Public Health (Tobacco) Amendment (Miscellaneous) Regulation 2025 (2025-591) – published LW 31 October 2025

Assisted Reproductive Technology Amendment (Donated Gametes) Regulation 2025 (2025-555) – published LW 17 October 2025

Environmental Planning and Assessment Amendment (Planning Proposal Authority) Regulation 2025 (2025-556) – published LW 17 October 2025

Rail Safety (Adoption of National Law) Amendment Regulation 2025 (2025-557) – published LW 17 October 2025

Strata Schemes Legislation Amendment (Commencement) Regulation 2025 (2025-558) – published LW 17 October 2025

Environmental Planning Instruments

Bourke Local Environmental Plan 2012 (Amendment No 5) (2025-592) – published LW 31 October 2025

Eurobodalla Local Environmental Plan 2012 (Map Amendment No 1) (2025-593) – published LW 31 October 2025

Fairfield Local Environmental Plan 2013 (Amendment No 49) (2025-594) – published LW 31 October 2025

Hay Local Environmental Plan 2011 (Amendment No 2) (2025-595) – published LW 31 October 2025

Hilltops Local Environmental Plan 2022 (Map Amendment No 1) (2025-596) – published LW 31 October 2025

Mosman Local Environmental Plan Amendment (Exempt and Complying Development Codes and Housing—Dual Occupancies) 2025 (2025-597) – published LW 31 October 2025

State Environmental Planning Policy (Sustainable Buildings) Amendment (Building Sustainability Index Certificates) 2025 (2025-599) – published LW 31 October 2025

State Environmental Planning Policy Amendment (North Wollongong Station Precinct) 2025 (2025-600) – published LW 31 October 2025

Wollondilly Local Environmental Plan 2011 (Amendment No 48) (2025-598) – published LW 31 October 2025

Ballina Local Environmental Plan 2012 (Map Amendment No 10) (2025-572) – published LW 24 October 2025

Bellingen Local Environmental Plan 2010 (Map Amendment No 5) (2025-573) – published LW 24 October 2025

Blacktown Local Environmental Plan 2015 (Map Amendment No 5) (2025-574) – published LW 24 October 2025

Blue Mountains Local Environmental Plan 2015 (Amendment No 21) (2025-575) – published LW 24 October 2025

Campbelltown Local Environmental Plan 2015 (Amendment No 44) (2025-576) – published LW 24 October 2025

Ku-ring-gai Local Environmental Plan 2015 (Amendment No 40) (2025-577) – published LW 24 October 2025

Port Stephens Local Environmental Plan 2013 (Amendment No 45) (2025-578) – published LW 24 October 2025

Richmond Valley Local Environmental Plan 2012 (Map Amendment No 3) (2025-579) – published LW 24 October 2025

Tweed Local Environmental Plan 2014 (Map Amendment No 3) (2025-580) – published LW 24 October 2025

Bega Valley Local Environmental Plan 2013 (Amendment No 49) (2025-559) – published LW 17 October 2025

Canterbury-Bankstown Local Environmental Plan 2023 (Amendment No 10) (2025-560) – published LW 17 October 2025

Hornsby Local Environmental Plan 2013 (Map Amendment No 6) (2025-561) – published LW 17 October 2025

Mid-Western Regional Local Environmental Plan 2012 (Map Amendment No 16) (2025-562) – published LW 17 October 2025

Parkes Local Environmental Plan 2012 (Amendment No 10) (2025-564) – published LW 17 October 2025

Parkes Local Environmental Plan 2012 (Amendment No 9) (2025-563) – published LW 17 October 2025

State Environmental Planning Policy (Planning Systems) Amendment (Independent Planning Commission Referral Criteria) 2025 (2025-565) – published LW 17 October 2025

State Environmental Planning Policy Amendment (Explorer Street Eveleigh) 2025 (2025-566) – published LW 17 October 2025

State Environmental Planning Policy Amendment (Macarthur Gardens North Affordable Housing Area) 2025 (2025-567) – published LW 17 October 2025

Sydney Local Environmental Plan Amendment (Eastern Harbour City) 2025 (2025-568) – published LW 17 October 2025

Upper Lachlan Local Environmental Plan 2010 (Map Amendment No 3) (2025-569) – published LW 17 October 2025

Wollongong Local Environmental Plan 2009 (Map Amendment No 10) (2025-570) – published LW 17 October 2025

Yass Valley Local Environmental Plan 2013 (Amendment No 19) (2025-571) – published LW 17 October 2025

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Dan Pearce

Emily Booth

Christine Jones (Editor), Nupur Garg

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