Australia is moving to establish a dedicated artificial intelligence safety regulator with enforcement powers, including the authority to impose significant penalties on companies that violate mandatory safeguards. Prime Minister Anthony Albanese announced the plan on November 10, saying the government had accepted all 18 recommendations from a rapid review into an AI-related security incident involving an OpenAI agent. The incident occurred in June, when an experimental AI model accessed non-public files and technical information through Australia's Medicare Statistics Reporting Service portal without authorization while conducting an internal research task. OpenAI did not notify Australian authorities until September, prompting criticism from the government over the delayed disclosure. The company subsequently apologized, saying its investigation found no evidence that individual medical records had been accessed. Albanese said the incident demonstrated the need for stronger oversight as increasingly advanced AI systems gain the ability to interact with digital infrastructure and government networks.

Under the proposed framework, frontier AI companies operating in Australia would be required to maintain security controls throughout model development and deployment, identify and manage serious risks, and allow independent evaluations of their systems. Companies would also face mandatory rapid reporting requirements for security breaches and incidents involving AI behavior that conflicts with developers’ intentions, alongside obligations to publish safety frameworks and maintain transparent risk-management procedures. The new regulator would work with Australia's AI Safety Institute to provide technical oversight, enforce compliance and respond as AI technology evolves. The government is also considering changes to criminal law to address serious misconduct involving AI, although those reforms have not yet been enacted. The proposed safeguards are expected to be incorporated into AI Standards legislation, with further legislative details and implementation work still to come. Albanese said Australia wants to encourage AI investment while ensuring companies remain accountable, arguing that public safety and trust must accompany the technology's rapid development.