Comment: As the Act Party knew it would, Paul Henry’s entry into politics received more than its fair share of media space. It reminds us that as we head into an election, we need to keep our eye on parties’ policies, including digital policies which have been alarmingly absent from policy debate. Digital policies might not get the attention of a media personality entering politics, but are increasingly going to shape our economy, our media, our public services, and our lives.
Consider the previous government’s Cloud First policy, which directed government agencies to prefer public cloud services over traditional information and communications technology infrastructure, adopted in 2023. This was embraced by the incumbent coalition government and enhanced through directing the public sector to also make greater use of AI, while cutting back on the public sector workforce at the same time.
This policy amounts to a form of privatisation. These services are almost always provided by giant global platforms such as Microsoft and Amazon. This expansion has been accompanied by the rapid construction of data centres across New Zealand to support these corporations, with little consideration given to their substantial demands on resources such as electricity and water.
Recent policy announcements by the Australian prime minister, on the other hand, indicate that country, unlike New Zealand, plans to address these issues through state and federal legislation, which would require data centres to contribute as much electricity as they use, minimise water use and a raft of other guardrails protecting workers, copyright holders and others who stand to be affected by unregulated use of AI.
“A buck short and a day late” is often used to describe New Zealand’s approach to policy and investment.
Two years ago, a postgraduate student of mine wrote a convincing dissertation on how this country could lead on energy, data and AI infrastructure. In this, he addressed the “chicken and egg” problem faced by our energy sector since its privatisation: the reluctance to invest in new power plants without the certainty of demand for the increased output.
He argued that could be addressed by introducing long-term contracts with data centre operators, which would ensure a pipeline of new power generation. Also needed was a regulatory framework requiring data centres to draw their electricity from new generators of electricity (wind farms, solar farms and so on) rather than from existing ones, competing with households.
His dissertation also pointed to the need to assess the risks of becoming too dependent on foreign-controlled technology providers. In a time of conflict, a worst-case scenario could see New Zealand pressured to support a side through providers being ordered to cease operations to ‘non-friendly’ governments – a digital equivalent of the closure of the Strait of Hormuz. Regulatory backstops would be needed to guard this.
Take-up of cloud services, data centres and AI infrastructure cannot be left to the market alone. They involve questions of accountability, resilience, privacy and national sovereignty. Any strategy must also include a regulatory framework capable of managing the risks that inevitably follow dependence on these new digital systems. For example, data sovereignty considerations include the extent to which technology companies can use customer information they hold to train artificial intelligence systems for their own, and not their customers’, purposes.
Effective regulation is rarely as simple as banning a technology outright, such as the global efforts to ban social media for under-16-year-olds. In other fields regulations exist such as vehicle safety standards: vehicles that fail to comply can be ordered off the roads. It can be a confounding contradictory world; gambling is regulated in New Zealand, yet screen addiction in children’s bedrooms is not.
This signifies an urgent need for a powerful new digital regulatory agency established through laws and backed by serious penalties. We have yet failed to emulate Australia through creating an office such as its e-safety commissioner. This election, we should demand serious policies from our politicians, rather than slogans and personalities.
