AI in Australian councils: which privacy law applies to yours
· Updated
Joaquín Trapero in AI and privacy expert, and founder of Nonimo.
A council isn’t an APP entity, so the federal Privacy Act most AI advice is written against usually isn’t the law that binds it. The rules come from your state, and in two states they shifted on 1 July 2026. What that means for councils using AI day to day depends on the postcode.
This page is for the officers who do the pasting: records, customer service, planning and governance. If something has already gone into a chat window, whether that counts as a breach is a separate question with its own clock.
Your council answers to its state privacy law, not the federal Privacy Act. NSW councils sit under the PPIP and HRIP Acts, Victorian under the PDP Act, Queensland's under the Information Privacy Act 2009 and WA's under the PRIS Act. South Australia has no statute. OVIC says keep personal information out of public AI.
Which privacy law covers your council, state by state
The OAIC’s page on state and territory privacy laws is blunt: the Privacy Act doesn’t cover local, state or territory government agencies. Complaints about a council in NSW, Victoria, Queensland, Tasmania or the NT go to that jurisdiction’s own commissioner.
So every vendor deck quoting the APPs at you is quoting the wrong statute. Pick your state below to see the law, the regulator and what each says about public chatbots.
Which law binds your council, and what it says about public AI tools
Choose the state or territory your council sits in.
Law: Privacy and Personal Information Protection Act 1998, plus the Health Records and Information Privacy Act 2002 for health information, such as immunisation clinics, where Ahpra's AI guidance for clinicians also applies.
Regulator: Information and Privacy Commission NSW.
On public AI tools: Digital NSW's basic guidance says never to put personal data into them. It's written for NSW Government agencies and doesn't name councils. The Office of Local Government hasn't set a mandatory AI framework for councils.
Records: State Records NSW treats anything AI creates during government business as a State record. Courts add their own rules, like the Supreme Court's practice note on generative AI.
Law: Privacy and Data Protection Act 2014 and its Information Privacy Principles. OVIC's local government guidance confirms Part 3, the privacy part, applies to councils.
Regulator: Office of the Victorian Information Commissioner (OVIC).
On public AI tools: staff shouldn't enter personal information into publicly available generative AI tools; OVIC says doing so will likely be a contravention of the IPPs. Its ChatGPT report also flags IPP 9.1, on transfers outside Victoria.
Records: PROV says records created by or through AI are public records.
Law: Information Privacy Act 2009. Section 18 counts a local government as an agency, and agencies follow the Queensland Privacy Principles from 1 July 2025.
Regulator: Office of the Information Commissioner Queensland.
On public AI tools: start with section 33. An agency may disclose personal information to an entity outside Australia only on limited grounds, such as the person agreeing. So ask where your chatbot provider processes the text.
Breaches: the mandatory notification scheme reached councils on 1 July 2026.
Law: Privacy and Responsible Information Sharing Act 2024, in force since 1 July 2026. The WA Government says it covers public sector entities "including local governments".
Regulator: the Information Commissioner of WA.
Breaches: reporting serious data breaches starts on 1 January 2027.
Day to day: a licence copy sent for an infringement review is now covered, and a WA licence watermarked for that review stops it being reused.
Law: none. SA has no privacy statute, and the OAIC describes its privacy committee's remit as state government agencies.
What fills the gap: the council's own adopted policy, its records and FOI duties, and its supplier contracts.
On public AI tools: the sector wrote its own, through LGITSA and the LGA of SA. Useful, but not law.
Law: Personal Information Protection Act 2004. It binds public authorities as the Right to Information Act 2009 defines them, and that list names a council.
Regulator: the Tasmanian Ombudsman.
On public AI tools: I haven't found council-specific AI guidance from the Ombudsman. Work from the Act's principles and your council's own policy.
Law: Information Act 2002. Section 5(1) lists a local government council as a public sector organisation, and its Schedule 2 privacy principles apply to them.
Regulator: Office of the Information Commissioner NT.
On public AI tools: no council-specific guidance found. The privacy principles still apply to anything typed into one.
No councils. The ACT Government does the municipal work itself, under the Information Privacy Act 2014 (ACT). A Canberra officer is a territory employee, not a council one.
OAIC, state and territory privacy legislation (updated 1 December 2025); OVIC; Queensland Information Privacy Act 2009 as at 29 October 2026; WA Government PRIS page (1 July 2026); NSW Audit Office, Local government 2025; Digital NSW; State Records NSW; PROV. Tasmanian Personal Information Protection Act 2004 and Right to Information Act 2009; NT Information Act 2002 as in force at 1 June 2026.
Borrowing federal wording is the easiest slip in a council AI policy, because it’s the wording Google finds first. A Victorian policy that cites APP 6 instead of IPP 2 reads well and points the officer at the wrong regulator.
Do councils use AI? What the NSW audit counted
The best numbers are from NSW. The Auditor-General’s Local government 2025 report, published on 28 January 2026, found 90 councils had adopted AI, with 109 tools in pilot or full use. It also says the count may be low, because fewer than half of councils monitor their tools.
Most of it is generative AI for everyday productivity work. The rest includes help with planning and land-use questions, recruitment, asset checks and spotting contamination in waste. Whatever the tool, what ChatGPT keeps from a prompt is the first thing to look up.
How far NSW councils' AI governance had got
Share of councils with each piece in place, as the Auditor-General reported it.
Audit Office of NSW, Local government 2025, chapter 9. Bars scaled to the largest value (40%). Tools staff open themselves, such as Copilot on a personal login, rarely reach an inventory.
That 10% is the figure I’d take to an executive meeting. A council that can’t list its tools can’t tell a resident which one handled their request. The audit recommended councils review their AI readiness and consider a strategy, with a 30 June 2026 deadline.
Victoria’s AI policy, and how much of it binds a council
Search for the Victorian Government’s AI policy and you land on the Administrative Guideline for generative AI, made on 27 November 2024. It covers public service bodies and public entities under the Public Administration Act 2004. That Act lists a council as an exempt body, outside both. Borrow it; it doesn’t bind you.
OVIC’s guidance is different. It’s written for every organisation under Part 3 of the PDP Act, and OVIC counts councils among them. Its June 2026 update asks for a risk assessment before use, a policy, training on permitted tools and a human check of accuracy. A template for that policy saves a week.
The Victorian AI documents a council officer gets sent
| Document | Written for | Binds a council? |
|---|---|---|
| OVIC, publicly available generative AI tools (updated 26 June 2026) | Organisations under Part 3 of the PDP Act | The IPPs do; this is how the regulator reads them |
| Administrative Guideline for generative AI (27 November 2024) | Public service bodies and public entities | No. Councils are exempt bodies under the Public Administration Act. A good model |
| PROV, AI technologies and recordkeeping policy (29 February 2024) | Public offices under the Public Records Act 1973 | Yes. That Act lists any municipal council as a public office |
| OVIC's ChatGPT investigation (24 September 2024) | A state department | No, but the same IPPs apply to councils |
OVIC; vic.gov.au; PROV; Public Administration Act 2004, s 4(1) and s 5; Public Records Act 1973, s 2. The last column is my reading of each document's scope. Blocking whole sites is one control; data loss prevention tools watch what's sent instead.
The investigation is worth ten minutes. A child protection worker used ChatGPT on a court report, and OVIC found the department contravened IPP 3.1 on accuracy and IPP 4.1 on security. It already had an acceptable use policy and privacy training, which OVIC called far from sufficient.
AI in customer service: before you paste a resident’s request
Customer service is where the resident’s name sits, and it’s where most of the drafting happens. The question isn’t whether to use AI. It’s what goes into the box, and which box.
OVIC adds one more line worth printing: publicly available tools shouldn’t be used to formulate decisions or undertake assessments. Drafting a reply is fine. Deciding a hardship request isn’t. Walk your own case through below.
Can this resident's request go into an AI tool?
For a customer service officer with a request open on screen.
What would you paste?
Which tool would it go into?
What do you want from it?
Built from OVIC's guidance on publicly available tools and the Victorian Administrative Guideline. The order of questions is mine. For a chatbot on the council website that calls a model from your own code, the swap can run on your server through a gateway.
The approved-tool branch still ends in stripping because a contract limits what the provider may do with the text. It doesn’t stop the text being sent.
Are AI prompts public records? NSW and Victoria
State Records NSW put it plainly in February 2024: any record created during government business, by a person, a system or AI, is a State record. A record AI produced needs metadata that includes “the prompts, inputs or algorithms used to create the record”.
It also says AI-generated records must be saved in official recordkeeping systems so they’re accessible when needed, for example for GIPA requests. PROV took the same line for Victoria in its 2024 policy. A record released with a redaction drawn over a PDF releases the name with it.
Where each piece of an AI-assisted reply ends up
| What the task produces | Where it usually lives | Can the council produce it for GIPA or FOI? |
|---|---|---|
| The final letter to the resident | The CRM and records system | Yes |
| The prompt, with the resident's details | A chat history on someone's login | Only if it was captured. On a personal account, no |
| Logs from the council's own app calling a model | The council's servers or an AI gateway's prompt log | Yes, and they're records too |
State Records NSW, AI and public office recordkeeping (9 February 2024); PROV, Artificial Intelligence Technologies and Recordkeeping Policy (29 February 2024). How each row is stored is my illustration. Clearing old chats on a council account: deleting ChatGPT history.
A stripped prompt is a better record anyway. If it’s ever released, there’s nothing in it to redact.
When a paste becomes a data breach in Queensland and WA
Two breach schemes reach councils for the first time in 2026 and 2027. Queensland’s mandatory notification scheme started on 1 July 2025 for most agencies and on 1 July 2026 for local government. WA agencies must report serious data breaches from 1 January 2027.
Under section 47 of Queensland’s Act, an eligible data breach is unauthorised access to or disclosure of personal information that’s likely to result in serious harm. OVIC treated the ChatGPT case as an unauthorised disclosure to OpenAI. The serious harm test is where the argument happens.
Breach notification for councils, where it's settled
| State | Councils inside a mandatory scheme from | What it means for a pasted file |
|---|---|---|
| Queensland | 1 July 2026 | Assess it against section 47, and notify if it's eligible |
| Western Australia | 1 January 2027 | Handling rules apply now; reporting starts then. A leaked licence copy may need a new WA card number |
| Victoria | No mandatory scheme under the PDP Act | OVIC still asks to be told when personal information goes into a public AI tool |
| South Australia | No statute | Your policy and contracts decide |
Queensland Information Privacy Act 2009, ss 47 and 219, and the explanatory notes to SL 2025 No. 73; WA Government PRIS page; OVIC.
Check what your council’s cyber policy says about this before you need it. What an Australian cyber policy covers is easier to read on a quiet Tuesday than during an incident.
What goes in a council AI register
The NSW audit found only one council in ten had every AI tool in a central inventory. The national assurance framework says governments should keep a register of when they use AI, and the audit notes it’s not mandatory for councils. Nothing stops you doing it anyway.
A register is the cheapest control on this page. It’s also where your AI policy becomes something an auditor can check. Tick what yours already records for each tool.
Does your council AI register record these?
One row per tool, including the ones nobody procured.
Ticked: 0 of 10
Not yet a register. Start with the stripping and storage rows: they're the ones a privacy complaint asks about first.
Close. Check the vendor rows against the contract, not the sales page. If a tool's traffic runs through an API gateway such as Kong, note whether its PII plugin is on.
My list, drawn from the NSW audit's governance elements, OVIC's minimum expectations and State Records NSW. Not an official template. For tools built in-house, compare PII redaction software before you write the stripping row.
The row councils skip is the one about decisions. If a tool has ever ranked grant applications or summarised a hardship request, that’s the entry a reviewer will ask for first.
![A resident's name turned into [PERSON_1]: in NSW, AI-made council records need metadata that includes the prompts used to create them](/guias/en-au/council-ai-prompt-state-record-label.webp "A resident's name in a council prompt")
Council AI and resident data: the step at the desk
Every regulator above lands on the same thing for public tools: personal information shouldn’t go in. A policy says so. It doesn’t make it happen at 4.45pm with forty requests in the queue, which is the gap OVIC found in its ChatGPT investigation.
Take a made-up barking dog complaint, the kind a customer service queue gets by the dozen. To draft a firm, polite reply the model needs the chronology and the local law, not the mobile number. If the complaint came with a spreadsheet of past reports, hidden rows and sheets travel too.
The same complaint, as pasted and as it should be pasted
Wren Castellano of 14 Tallowwood Close, Bellbird Flat (mobile 0491 570 156, rates assessment 3308-21, pension concession on file) reports the kelpie at 16 Tallowwood Close barks from 5am. Third complaint since March. Draft a reply explaining our nuisance process.
[PERSON_1] of [ADDRESS_1] reports the dog at [ADDRESS_2] barks from 5am. Third complaint since March. Draft a reply explaining our nuisance process.
Fictional resident, suburb, property and numbers; the mobile is from ACMA's range for fiction. The officer puts the real name back in the final letter. More identifiers worth catching are in our list of what to redact.
That swap is what Nonimo for Australian councils does on the officer’s Mac or Windows computer. The officer selects the text, presses a key, and names, addresses and numbers become labels before the tool sees them. The real details return in the reply on the same screen.
The pension concession is the line that bothers me most. It isn’t sensitive information in the statutory sense, but it’s the detail a resident would least expect to find in a vendor’s logs. The key linking labels to real details stays on the officer’s computer, as our security page explains.
This is my reading of public regulator pages for councils, and your privacy officer still decides how it applies to your own systems.
Sources
- OAIC, State and territory privacy legislation: the Privacy Act doesn’t cover local government; council complaints go to state commissioners.
- OVIC, Use of publicly available Generative AI tools in the Victorian public sector: personal information shouldn’t go in; minimum expectations; notifying OVIC.
- Victorian Government, Administrative Guideline for the safe and responsible use of generative AI: scope and the rule on decisions.
- State Records NSW, AI and public office recordkeeping: AI records are State records; prompts in the metadata; GIPA.
- Audit Office of NSW, Local government 2025: 90 councils, 109 tools, policy, strategy and inventory figures.
- Queensland Information Privacy Act 2009: local government as an agency (s 18), offshore disclosure (s 33), eligible breach (s 47), councils’ delayed start (s 219).
- Explanatory notes, SL 2025 No. 73: QPPs from 1 July 2025; breach scheme for local government from 1 July 2026.
- WA Government, Privacy and Responsible Information Sharing: local governments covered from 1 July 2026; breach reporting from 1 January 2027.
Accessed 7 November 2026.
Common questions
What is the Victorian Government's policy on artificial intelligence?
For staff, an Administrative Guideline made in November 2024. It prefers agency-approved tools and says not to use generative AI to make decisions. Councils fall outside it: the Public Administration Act treats them as exempt bodies.
Do councils use AI?
Yes, more than their paperwork shows. NSW's Auditor-General counted 90 councils using 109 AI tools, yet only 10% had every tool listed in one central inventory.
How can AI be used in customer service at a council?
Mostly for drafting replies and answering planning questions. The careful version keeps the resident's name, address and reference numbers out of what the tool sends to its provider.
What happens to the information I share with external AI tools?
It goes to the provider, on the provider's terms. In Victoria, OVIC asks organisations to tell it when personal or non-public information has gone into a publicly available tool.
What does OVIC's AI guidance say?
Keep personal information out of public generative AI tools. OVIC says entering it will likely contravene the IPPs, and expects risk assessments, a policy, training and accuracy checks.
Does a council need an AI strategy?
No law requires one yet. In NSW, the Auditor-General found 11% of councils had an AI adoption strategy and recommended the rest consider developing one.
Is there a national AI policy that binds councils?
No. NSW's Auditor-General notes the national assurance framework isn't mandatory for councils, and the Office of Local Government hasn't set a mandatory AI framework either.