The NSW government has announced a framework to fast-track datacentre approvals, committing to assess new proposals within 75 days if they meet world-class energy, water, and environmental standards. The initiative comes amid growing community concern about the rapidly expanding industry, which has seen investment surge by 75 percent annually over the past three years. Economists have credited this substantial capital inflow with helping the state avoid recession. The Minns government appears to be positioning NSW as a premium destination for digital infrastructure development.
Under the new guidelines, developers must comply with six core principles, including applying world-class environmental and efficiency standards, imposing no net cost to consumers and communities, and funding additional water and energy supply infrastructure. Critically, the government will introduce regulation to ensure datacentres bear the cost of electricity network upgrades without passing these expenses to households and small businesses. An independent pricing regulator will be commissioned to review how water pricing can reflect full servicing costs. The framework has already garnered endorsement from industry leaders CDC, AirTrunk, and Data Centres Australia.
Treasurer Daniel Mookhey emphasized that the framework provides certainty for both investors and the broader community, stating that NSW is setting a high bar as a premium destination. The government will relocate its Office of AI, established in 2025, directly into the cabinet office. This move follows opposition proposals for a dedicated AI minister with guarantees that frontline workers would not be replaced by automation. The NSW Greens have joined their federal counterparts in calling for a moratorium on new datacentre developments, citing concerns about resource consumption and community impact.