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Allan also said Victoria could lead the way on AI development. She said advancements in the field was estimated to add $30 billion to state product over the next decade.
But she acknowledged a delicate balancing act to protect the people whose jobs were affected or even replaced by the emerging technology, arguing AI could create more jobs than it took away if handled correctly.
“I’m the daughter of a man who worked with his hands. I watched him made redundant with the stroke of a pen,” Allan said.
“I don’t want a future where a politician – 40 years from now – has to say, ‘I’m the daughter of a man who used to work with a screen’.
“We can maximise the benefits – while protecting our people – so workers are better off from the change, not left behind in its wake.”
To achieve this, Allan said the government would introduce two new AI-focused policies.
She pledged to make Victoria the country’s hub for data centres – large facilities that house the servers and storage needed to enable AI – but raised concerns about the energy and water they would require.
The Stargate AI data centre in Texas is one of several projects being built in the United States.Credit: Bloomberg
The state government will spend $5.5 million on a sustainable data centre action plan to help determine where the centres should be located so they are close to power, water and transport without straining Victoria’s existing resources.
This plan will also work with the TAFE sector to develop workers who can help deliver this pipeline of centres, which the state estimates could be worth up to $25 billion in capital expenditure.
Australian Bureau of Statistics data released on Thursday showed a massive rise in spending on media and telecommunications buildings and equipment in 2025, partly driven by the rush across the world to build more data centres.
Allan also pledged $8.1 million for “AI career conversion” to help workers, whose jobs are affected by the technology, to become AI specialists.
“We’ll target the sectors where we can make the biggest difference, fast,” she said. “And we’ll offer it to more than 1300 workers who are most at risk.”
Allan’s comments come almost a year after she unveiled her Economic Growth Statement, a range of policies aimed at encouraging private sector investment and reassuring business on Labor’s economic credentials.
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State Opposition Leader Jess Wilson has sought to make the economy front and centre of her pitch to voters, setting the stage for a 2026 election campaign that will focus more heavily on jobs after a year in which crime has dominated both sides of politics.
Allan told the Committee for Economic Development of Australia lunch that some businesses disagreed with her commitment to legislate the right to work from home, but she would push on with the policy anyway.
“I’ve listened to their views. I respect them. I haven’t changed my mind,” she said. “And in the years to come, I think those businesses will change theirs.”
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