Australia’s AI copyright debate turns on constitutional property rights

The rule at the centre of the dispute

Section 51 gives the federal parliament power to make laws for the acquisition of property “on just terms.” Critics argue that giving AI companies new rights to use protected material, while reducing the rights of its owners, could trigger that provision.

Ross Cadell, a Nationals senator and member of the federal parliamentary committee on AI, told Guardian Australia the government might have to compensate every rights holder in the world. Shadow attorney general Michaela Cash urged the government not to “sell out Australian authors and rights holders” to attract AI investment.

The Labor government is considering copyright changes as part of a wider AI reform package covering data centres, online safety, jobs, energy and the economy. Prime Minister Anthony Albanese has promised the “strongest possible protections” and warned that using creative work without payment would be “theft.”

Some AI companies have rejected licensing under existing law as too complicated. Anthropic has proposed an opt-out model: it could collect material unless a rights holder sets up a digital signal showing they object.

Attorney general Michelle Rowland’s office said the government intended to support creative workers, and that any future changes should give rights holders meaningful control and fair compensation.

No proposal, but a constitutional test

Anne Twomey, emeritus professor of law at the University of Sydney, called the issue exceptionally difficult. The government has not yet published a specific legislative proposal, and High Court decisions on copyright and property acquisition have varied across cases involving video games, plain cigarette packaging and audio cassettes.

Twomey expects the government to examine the constitutional risks carefully. She also said that granting AI companies a new right to use protected material while reducing rights holders’ existing protections could create a constitutional problem. The High Court has recognised several exceptions to section 51, she noted, so the government would need to establish whether the provision applies before legislating.

The potential reach goes beyond Australian creators. If a law allowed models to be trained in Australia on international material, foreign rights holders might have grounds to sue in Australian courts. Cadell warned that the result could be the “largest compensation case for rights holders in history.”

At a parliamentary committee hearing on Friday, officials from the attorney general’s department confirmed they were considering the risks. They did not directly answer Cadell’s question about international consequences or possible liability to overseas rights holders.

Music’s objection is about more than payment

Annabelle Herd, chief executive of the Australian Recording Industry Association, said any proposal allowing AI companies to collect data would amount to an acquisition of property. She argued that it was hard to imagine compensation making up for a right transferred to companies so they could profit, and said the change could lead to a constitutional challenge.

Chris Maund, head of Mushroom Records, said the existing law works and AI companies should use current licensing arrangements. Companies such as Spotify already make deals related to AI, he said. A change could also affect artists and rights holders beyond Australia: companies could train models there while avoiding other countries’ copyright laws.

Maund said international rights-holder groups had urged Labor not to weaken copyright. He also said the government had treated the music industry well, particularly Albanese and Tony Burke, crediting them with creating Creative Music Australia, which benefited companies such as Mushroom Records and their artists. On copyright, however, he said the government’s position diverged from those of artists and rights holders.

Cash said the Coalition recognised AI’s benefits and supported investment, while sharing concerns about the constitution. She said compensation for rights holders was the prime minister’s own standard and that the government should meet it. The Coalition would examine property rights and acquisition on just terms once the government presented its proposals.

I think the central uncertainty is not whether the government can describe a change as pro-innovation, but what legal right it would actually transfer—and to whom. Without a proposal, the international liability remains a warning rather than a settled outcome. But a domestic rule that lets models train on global material could turn an Australian copyright decision into a dispute over rights far beyond Australia.