Australia hands copyright legal loophole to AI companies

In June 2026, Prime Minister Anthony Albanese appeared strong in his statement about what AI companies cannot do.

“No company should use Australian books, music, art or news to build or train AI without the artist’s control. That includes the artist’s control of the price and value of their work,” he declared in his ‘AI in Australia's interests’ speech. 

“Anything less, is theft.”

Yet, three months earlier, on 31 March 2026, his own government passed the Copyright Amendment Bill 2026, which opens a new avenue to a similar outcome: Australian copyright-protected material being used for AI development without permission or payment.

Why copyright matters

The moment a book, poem, photograph, painting, song, or another creative work exists, the creator holds the exclusive right to decide how that work is reproduced, distributed, or adapted. No registration or fee is required for this protection, and it lasts the creator's lifetime, plus 70 years.

In simple terms, anyone who wants to use someone else’s work needs their express permission under Australian copyright law.

The government, however, recently carved out an exception to this protection in the Copyright Act 1968. The Copyright Amendment Bill 2026 introduced an orphan works scheme that allows any work considered an “orphan” — meaning its owner is unknown or untraceable — to be used without permission, provided the user makes “reasonable” efforts to find and obtain consent from the rights-holder.

Orphan works are valuable to AI companies

Most 20th century material is thought to fall into the orphan works category: old photographs, newspaper clippings, unsigned manuscripts, paintings, books, films, cassette tapes, and much more. This is pre-AI-era material that AI companies value, and was protected under copyright.

The recent legislative amendment means copyright-protected works are now split into two categories: works with known owners and orphan works. But distinguishing between them could be difficult, especially given how AI models are trained.

Australian author Anna Funder, recently explained that AI models were initially trained on personal emails, Reddit posts, and other publicly available information online. But big tech companies wanted high-quality, human-authored material, the kind found in books because it's “better written, edited, and fact-checked”.

“What they particularly wanted were books published before 2022, because those ones are certain to be uncontaminated by AI,” she said at a Sydney Town Hall event earlier in August.

Older works, uninfluenced by AI, are valuable to technology companies. These materials are what the recently introduced orphan works scheme makes easier to take without permission or payment.

The shifting narrative on copyright reforms

ARIA CEO Annabelle Herd and Attorney-General Michelle Rowland MP. Image: LinkedIn

Attorney-General Michelle Rowland likely understands the pressures facing the TV, film and media industries. For a decade before entering politics in 2010, Rowland was a senior lawyer specialising in media and telecommunications at Gilbert + Tobin, including when the law firm represented Hollywood and Australian film studios in the copyright infringement case against iiNet.

In 2009-2010, she also chaired Screen NSW, the state government's key funding body for the Australian screen production industry.

Since becoming Attorney-General in May 2025, Rowland has delivered mixed messages about the government’s plans for copyright reforms.

In October 2025, Rowland stated, “This government has repeatedly said that there are no plans to weaken copyright protections when it comes to AI.” She said this while announcing the government’s decision not to introduce a text and data mining (TDM) exemption, a Productivity Commission recommendation that would've let AI developers freely use copyright-protected material for training models.

Australia’s creative industries welcomed the decision. Dean Ormston, CEO of APRA AMCOS, said in a statement, “If copyright was truly the barrier... the multi-billion-dollar investments in Australia from companies including Amazon and OpenAI wouldn’t be happening.

“Tech platforms are shopping for jurisdictions that will water down copyright legislation so that they can find ways to avoid paying creators while profiting from their cultural IP.” 

In the same announcement that rules out the TDM exemption, the government signalled it was considering other copyright reforms.

Less than two weeks later, in early November, the government moved to introduce the orphan works scheme under the Copyright Amendment Bill. This opened up a new pathway to a similar outcome: AI companies using Australian creative work, without payment or permission, to train their models.

The amendment reached the Senate floor by February 2026. Independent Senator for ACT David Pocock noticed the absence of any mention of AI in the legislation and moved a second reading to strengthen protections.

Independent Senator for ACT David Pocock. Image: Supplied.

“The Copyright Amendment Bill 2026 was subject to a Senate Committee Inquiry. However, there was not a single mention of Artificial Intelligence in the final report, suggesting the impacts of the amendment on AI and copyright were not considered,” Pocock told The Discloser.

“I moved a second reading amendment to the Copyright Amendment Bill 2026, again restating the need to protect Australian creatives from text and data mining and ensure copyright protects creatives against big tech.”

In a joint statement in late March, shortly before the orphan works scheme came into effect, peak bodies representing writers, musicians, artists, journalists, and cultural institutions made another last-ditch effort to oppose the imminent copyright amendment and its justification.

“The same arguments were deployed in 2016. They resurfaced during COVID-19… They are now being run again, in perfect step with big tech's push to weaken creator protections in the development of Intelligence,” the joint statement reads. 

“The timing, each time, is not coincidental. The target, each time, is the same. The earnings of artists and creators who have no comparable institutional power, no government funding, and no capacity to absorb further cuts to their income.”

Despite concerns raised by creative industries and politicians like Senator Pocock, the Copyright Amendment Bill 2026 passed Parliament on 31 March. It came into effect the next day, on 1 April, with very little media coverage and public debate about what it might enable.

Even Rowland, who typically posts on social media when legislation passes, appears to not have done so on this occasion.

There is, however, an announcement on the government’s website where the amendment is portrayed as a solution for libraries, museums, and researchers, and linked to recommendations made by the Australian Law Reform Commission in 2013 and the Productivity Commission in 2016.

The following month, on 20 May, the Attorney-General appeared at Maurice Blackburn's Class Actions + Corporate Conduct Symposium. According to Rowland's speaking notes obtained under Freedom of Information, she was preparing to talk about the government’s commitment to “a fit-for-purpose copyright framework that protects and supports Australia's creative and media industries while unlocking AI innovation”. 

The notes also refer to “detailed consultations” with an AI reference group where they covered “options for fair, legal avenues for using copyright material in AI” and “improving certainty on how copyright law applies to AI-generated material”.

In her keynote speech delivered on the day, obtained under FOI, Rowland spoke about the orphan works scheme with no mention of AI. But later in the same speech, she said she was “focused on progressing policy reform to keep pace with technology change” and “considering how AI interacts with the legal frameworks... including the Copyright Act 1968.”

“This is a significant policy focus for the Government and I am committed to engaging with stakeholders, including through the Copyright and AI Reference Group, to consider these issues,” she added.

The following month, in June, Senator Pocock raised a whistleblower's allegation in Parliament, saying the government had been privately considering proposals to allow AI companies to train their models on Australian copyright material.

“From government documents I have been made aware of, AI companies have cited our copyright laws as a barrier to using Australian content to train their models,” Pocock said. “In practice, however, we know they have indiscriminately scraped and stolen this work.”

Legal loopholes that leave creators exposed

Prior to the copyright amendment, Australians would have been owed payments if their creative works were used to train AI models. However, the reform has created loopholes that could prevent that from happening.

The undefined standard of ‘reasonable’

The orphan works scheme allows anyone to use orphan works without permission or payment, provided they undertake a “reasonably diligent search” to locate the owner, within a “reasonable time before use”, and a record is kept for a “reasonable period”.

A library, a museum, an education institution, and an AI company may each interpret “reasonable” differently. But all can claim to have acted reasonably under their own interpretation.

No damages for past use

If the copyright owner later surfaces, they can seek payment or block future use of their work. However, they cannot claim damages for use that has already happened, a limitation that tips the balance towards the user, not the creator.

It’s also unclear how an aggrieved creator would prove their copyright had been infringed upon.

Scheme ‘unlikely’ to be exploited by AI

AI is absent in the legislation itself, but it does make a single appearance in the explanatory memorandum.

The memorandum does not say the law prohibits AI companies from using orphan works to train their models. Instead, it says it’s “unlikely” they would do such a thing because it would be “administratively burdensome, time consuming and impractical”. 

For an industry that, as Pocock noted, had already “indiscriminately scraped and stolen” creative work, the word “unlikely” may not create the “certainty” that Rowland said the reforms would give to creators.

Creators 'not a tech subsidy'

The National Association for the Visual Arts (NAVA) recently published an open letter to the government, Australia's creators are not a tech subsidy, to spell out what's at stake, and to call for a pause on further copyright reforms until creative industry stakeholders are properly consulted.

"Australia's cultural and creative sector contribute over $67 billion to the economy and grows faster than most of the economy. It comprises more than 95,700 businesses and employs hundreds of thousands of Australians," the letter states.

“Undermining the legal protections that make these careers would be an economic decision with consequences felt for decades.” 

The letter rejects the idea that industry-run funds could replace those rights. Such offers, they argue, are designed “to permanently sever creators from the work they make. The song written at 2am. The photograph that took a day to compose. The story researched for six months. The novel that took years.”

What looks like a payment offer, the letter warns, is really “the removal of the only protection that says a creator’s work is theirs”.

What it all adds up to

While government officials promised certainty and control for creators, the fine print appears to tell a different story. The orphan works scheme leaves most works from the 20th century exposed, with no absolute protections in the legislation and no defined way to prove infringement.

Australia’s Prime Minister declared that denying creators control over their work amounts to theft. If that standard holds, the government’s own legislation may have made that theft easier to carry out and harder to challenge.

There are further copyright reforms being discussed outside of public view.

"We want consent, and to be paid for our work through the legal system that exists to make that happen," NAVA's open letter states.

"We are asking the Government to bring the platforms to the table for local licensing agreements and to hold the line until they come." 

Investigation continues in part three. Coming soon.

Read part one on the High Court ruling that solidified Australian copyright protections for the internet age.