NSW Government Turns to AI to Tackle Procurement Rorts

The NSW government has announced a bold new step: handing over “vast troves” of procurement data to the ACCC so that artificial intelligence can sniff out cartel behaviour in government contracts. With $42 billion in spending each year, the stakes couldn’t be higher.

The positive side

On one hand, this is a forward-thinking move. Government procurement is notorious for waste and, at times, outright corruption. Using AI to detect unusual bidding patterns or collusion could protect taxpayer money and level the playing field for honest businesses. Treasurer Daniel Mookhey’s message is clear: law-abiding companies should be rewarded, not disadvantaged by competitors who play dirty.

The OECD has shown that similar programs can cut procurement costs significantly. If applied effectively, this initiative could not only save billions but also strengthen trust in public spending.

The negative side

But here’s where the concern creeps in. Whenever we hear “AI” and “vast troves of data” in the same sentence, red flags go up. Who controls the algorithms? How accurate are they in detecting cartel behaviour without falsely accusing legitimate businesses? Data privacy, transparency, and accountability are all at risk if AI is rolled out without strict oversight.

There’s also a broader question: are we outsourcing judgment to machines in areas where human context is critical? Detecting “patterns” is one thing; interpreting intent and lawfulness is another. If not handled carefully, this could become another case of technology moving faster than regulation.

My view

AI has the potential to be a powerful ally in the fight against procurement rorts, but it must remain a tool, not a decision-maker. The final call should always rest with human investigators. If this partnership strikes the right balance between innovation and responsibility, it could set a global benchmark for using AI in public integrity. But if mismanaged, it risks creating more doubt than trust.

In short: this is a step worth taking — but one that demands as much scrutiny as the rorts it aims to expose.