AI Productivity Boost of 2.4% Hinges on Trust and Reskilling, EY Report Shows

For technologists and AI leaders, Australia’s EY report is a real-world validation that broad AI adoption can deliver economy-wide productivity leaps—but with a critical caveat: trust. While 80% of Australians back tighter AI rules, the report frames regulation not as a brake but as a prerequisite for widescale integration. The real bottleneck is workforce transformation: the difference between a 2.4% productivity surge and a muted outcome will be determined by how effectively organisations reskill workers and redesign workflows, not just by model performance.

Australia stands on the cusp of a significant economic transformation, with a new report from EY projecting that artificial intelligence could deliver a 2.4% productivity boost over the next decade—enough to end a long stagnation that has eroded living standards across the country. Released on July 30, 2026, the analysis quantifies for the first time the potential macroeconomic uplift from widespread AI adoption, estimating a $116 billion increase to real GDP and the creation of 44,000 jobs, even as the technology reshapes the workforce. The findings arrive at a critical moment for Australia’s economy, which has suffered one of the steepest declines in living standards among developed nations, with real wages down 5.1% since March 2021 according to an OECD report in July. Labour productivity growth has averaged a meagre 0.3% annually over the past decade, underscoring the urgency of the opportunity AI presents.

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From a macroeconomic perspective, a $116 billion GDP boost represents roughly 4-5% of Australia’s current output, making it a transformative force akin to past technological revolutions.

The EY modelling suggests that AI does not simply replace roles but augments human work, leading to net job gains across most industries. Services, healthcare, and professional sectors are expected to see employment lift due to higher productivity and increased real wages fuelling demand. However, capital-intensive sectors such as mining and agriculture could experience a slight decline in headcount. Crucially, EY’s regional chief economist Cherelle Murphy stressed that realising the full 2.4% uplift hinges on two interdependent factors: effective workforce reskilling and the establishment of appropriate regulatory frameworks. While businesses have warned that stringent rules could slow adoption, over 80% of Australians favour tighter governance over AI usage, creating a policy tension that the government must navigate carefully.

The regulatory debate mirrors global challenges: too little oversight risks public backlash and safety incidents that could stall adoption, while overly prescriptive rules may stifle innovation and investment. Murphy argued that clear institutional frameworks would actually build the trust necessary for users to embrace AI, unlocking the productivity gains that models predict. This suggests a path where smart regulation acts as an enabler rather than a barrier, a nuance that will likely shape Australia’s AI policy in the coming year.

From a macroeconomic perspective, a $116 billion GDP boost represents roughly 4-5% of Australia’s current output, making it a transformative force akin to past technological revolutions. The productivity channel is particularly important because Australia’s recent growth has been largely population-driven; productivity improvements are essential to sustainably raising living standards without inflationary pressure. The Reserve Bank of Australia, which has been battling stickier-than-expected inflation, would likely welcome any supply-side expansion that boosts potential output and helps ease cost-of-living pressures.