Australian Finance Department releases internal AI guidance

Australia’s Department of Finance has publicly released internal guidance on generative AI under the Freedom of Information Act 1982, outlining how staff and contractors should use AI tools in their work.

The guidance, dated March and April 2026, applies to tools including Microsoft 365 Copilot Chat, Microsoft 365 Copilot full licences, and public generative AI services such as ChatGPT, Claude, and Gemini. It says AI tools can improve productivity and service delivery, but also carry risks that must be understood and managed.

Staff intending to use AI tools must complete the APS Academy’s AI in Government Fundamentals course. Staff are also encouraged to build prompting skills in a secure environment through GovAI’s Interactive Learning Environment and discuss approved AI use cases with managers.

The guidance says staff must use generative AI safely, responsibly, and ethically, in line with departmental policies and APS values. The guidance states that AI should support, rather than replace, human judgement and that final decisions must always be made by people, not AI systems.

The document also sets limits on the information that can be entered into AI tools. Public generative AI tools may be used with non-sensitive official and unofficial information, but staff must not enter personal, sensitive, classified or protected information. Copilot Chat and Copilot full licence in web mode are also restricted from use with personal, sensitive, classified, or protected information.

Finance’s enterprise-grade Copilot full licence operating in work mode permits broader use within the department’s ICT environment, including sensitive and protected information where an AI use case has been formally registered. Staff seeking to use personal information with Copilot full licence must complete a Privacy Impact Threshold Assessment and consult the Privacy Team.

The guidance also requires staff to register some AI use cases through Finance’s AI Use Case Register. Registration is required for certain uses involving personal, sensitive, classified, or protected information, while paid AI tools or systems require consultation or approval before procurement.

Staff are required to disclose AI use when AI-generated content significantly influences decision-making, could reasonably be mistaken for human-generated content, has not been reviewed by a subject-matter expert, or where legal or ethical obligations require disclosure.

The department says AI use is overseen by an AI Governance Committee responsible for promoting AI strategy, supporting safe implementation, advising on ethical, legal and social responsibilities, and ensuring compliance with government legislation, regulations and standards.

The guidance says Finance governs AI in line with the Digital Transformation Agency’s Policy for the responsible use of AI in government, Australia’s AI Ethics Principles, the Pilot Australian Government AI assurance framework, and the Protective Security Policy Framework. It says the department has limited its use of AI to low-risk use cases.

Why does it matter?

The guidance provides a practical example of how governments are translating high-level AI principles into operational rules for everyday use. Rather than focusing solely on ethics frameworks, it addresses concrete issues such as training requirements, approved tools, data handling, disclosure obligations and governance processes.

The document also highlights a broader challenge facing public administrations worldwide. As generative AI becomes part of routine government work, agencies must balance productivity gains with privacy, security, transparency and accountability requirements. Australia’s approach illustrates how governments are seeking to enable AI adoption while maintaining human oversight and limiting risks associated with sensitive information.

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