In a move signaling fiscal restraint amid ambitious digital transformation, the Australian federal government plans to assign chief AI officer roles to existing public service staff rather than recruiting outsiders. This approach, detailed in recent reporting, aligns with a broader push to embed artificial intelligence across agencies by mid-2026, leveraging internal talent to oversee AI adoption without expanding headcounts.

The strategy emerges from the Australian Public Service (APS) AI Plan, unveiled in November 2025, which mandates every department and agency to appoint a Chief AI Officer (CAIO) by July 2026. According to iTnews, these positions will likely be filled by current APS employees, with some holding dual roles as agency officers—a hybrid model blending AI oversight with existing duties.

Government insiders note this decision avoids the costs and delays of external hires, drawing from a pool of over 150,000 APS workers already gaining AI exposure through mandatory training programs. The plan, led by the Department of Finance in collaboration with the Digital Transformation Agency and Australian Public Service Commission, aims to boost efficiency and service delivery using generative AI tools accessible to all public servants.

Roots of the AI Push

The initiative stems from the APS AI Plan 2025, which promises ‘better services faster’ for Australians. As outlined on digital.gov.au, every public servant will receive AI tools and training, with CAIOs tasked to coordinate adoption, mitigate risks, and drive innovation. This follows Labor’s November announcement, positioning AI as a ‘fundamental shift’ in government operations, per Startup Daily.

Finance Minister Katy Gallagher emphasized the plan’s collaborative development, incorporating input from across the APS. ‘The APS AI Plan sets out how the Australian Public Service will harness artificial intelligence,’ states the official release on the Department of Finance site. Early pilots, such as those in Home Affairs, are testing AI on sensitive data, with the department leading by example.

Internal Talent Takes Charge

Exclusively reported by iTnews, the CAIO roles will integrate into current structures, potentially seeing agency heads double as AI leads. This mirrors U.S. federal mandates where Chief AI Officers manage risks and innovation, but Australia’s version prioritizes cost-efficiency amid budget pressures. No new funding has been allocated specifically for these positions.

Sources within the APS indicate selection criteria focus on staff with AI literacy from ongoing training rollouts. The Information Age publication highlighted Labor’s commitment: ‘Chief AI officers coming to Australian govt agencies,’ underscoring the plan’s scope across all federal entities.

Risk Management and Tools

To guide AI use, the Digital Transformation Agency launched an AI Impact Assessment tool, helping agencies evaluate proposals for compliance and ethics. Government News reports this instrument addresses concerns over data privacy and bias, especially as Home Affairs plans to apply AI to classified information—a move flagged in iTnews.

Mandatory AI training for all APS staff, announced earlier, ensures a baseline competency. ‘Every public servant is to receive mandatory training to use artificial intelligence,’ notes Government News. Agencies like GitHub foresee a surge in AI agents from 2026, aligning with the National AI Plan’s vision detailed in IT Brief.

Broader National Strategy

The APS effort ties into the National AI Plan, released last week, which outlines public sector integration steps. Government News contributor Elizabeth Carroll explains its implications: steps for embedding AI into services while upholding safeguards. This complements voluntary AI ethics frameworks now gaining regulatory teeth.

Industry observers on X, including posts from tech accounts, buzz about the internal staffing model, with one noting ‘Federal chief AI officer roles set to go to existing APS staffers’ linking back to iTnews coverage. Sentiment reflects cautious optimism, tempered by execution challenges in a bureaucracy known for slow tech adoption.

Challenges Ahead

Critics question whether dual-role staff can adequately champion AI amid day-to-day pressures. Home Affairs’ aggressive data plans raise security flags, requiring robust governance. The APS AI Plan at-a-glance page stresses risk management, but implementation hinges on CAIOs’ authority.

Budget constraints drive the no-new-hires decision, echoing efficiency dividends of past years. As iTnews covers ongoing federal IT shifts, the real test lies in measurable outcomes: faster policy-making, reduced backlogs, and innovative services without compromising trust.

Global Parallels and Future Outlook

Australia’s model echoes the U.S. OMB directive for CAIOs, but with a uniquely frugal twist. International benchmarks, like the UK’s evolving digital roles, inform the approach. By 2026, with CAIOs in place and tools widespread, the APS could pioneer AI-driven governance Down Under.

Stakeholders await July deadlines, monitoring pilots for scalability. If successful, this internal pivot could redefine public sector tech leadership, proving AI transformation need not inflate payrolls but elevate capabilities from within.