Artificial Intelligence has moved from theory to practice - and in 2026, it will become a defining capability for local governments across Australia. For South Australian Councils already navigating budget constraints, workforce shortages, security obligations and rising community expectations, AI has become a powerful opportunity, but also a new focus area for governance.
This article provides a leadership-focused overview of what Council CEOs, General Managers, Directors, and Governance teams need to know about AI as they prepare for 2026.
Across Australia, councils are already harnessing AI to streamline day-to-day operations. By 2026, AI will become embedded within standard municipal workflows, driving improvements in areas such as:
AI-driven virtual assistants responding to common queries
Automated triage for customer requests
Sentiment analysis of community feedback and social media
Predictive maintenance for roads, buildings, and stormwater assets
Automated defect detection via drones or mobile cameras
AI-driven capital works prioritisation tools
Drafting reports, grant submissions, and council papers
Summarising long documents or regulatory changes
Automating repetitive administrative processes
AI won’t replace Council expertise—but it will amplify the capabilities of existing teams, especially in small regional Councils with limited resources.
The shift to AI introduces new governance obligations similar to cybersecurity and WHS: you can delegate the work, but not the accountability.
Council Leaders should ensure the organisation has clear policies around:
Outlining acceptable use, risk controls, and decision boundaries.
2025–26 Federal Privacy Act reforms will significantly expand obligations for Councils — especially related to AI training data and personal information handling.
Any AI used in decision-making must be understandable and reviewable. This becomes critical in areas like planning, compliance, and enforcement.
AI tools often rely on third parties, cloud services, or shared data models. Council Leaders must ensure:
data sovereignty is preserved
training data is not being reused without consent
the vendor’s AI outputs are auditable and defensible
A well-structured AI governance framework will soon be as essential as a Cybersecurity or Information Management policy.
Council networks are already high-value cyber targets. In 2026, AI will:
increase the speed of attacks
enhance phishing sophistication
introduce risks via connected systems and integrations
At the same time, AI can strengthen security through:
anomaly detection
automated threat response
continuous monitoring tools
The key message for executives: You cannot deploy AI without ensuring your Council’s underlying cyber posture meets at least Essential Eight maturity requirements.
AI amplifies both opportunity and exposure.
The ICT skills shortage across Local Government is expected to continue into 2026 and beyond. AI introduces new capability requirements in:
data literacy
prompt engineering
algorithmic risk assessment
AI procurement and vendor management
cyber resilience
For many Councils, especially smaller regional ones, developing internal AI capability may not be feasible. Instead, Leaders should plan for:
Managed AI support, governance, and integration.
Pooling resources across multiple Councils.
Focusing on practical use cases rather than deep technical expertise.
A workforce that understands how to use AI safely and effectively will be a competitive advantage in talent-constrained environments.
AI will not necessarily reduce ICT spending — at least in the short term. Executives should plan for cost impacts in:
cybersecurity uplift
integration with existing systems
training and change management
data cleansing and quality improvement
licensing for AI-enabled platforms (Microsoft, CRM, etc.)
The return on investment, however, comes from:
efficiency gains
reduced overtime
fewer manual tasks
streamlined asset planning
improved customer experience
better decision-making
CFOs and Finance Managers should include AI considerations in forward budgets, long-term financial plans, and ICT capital works programs.
The community — including regional residents — now expects digital services comparable to commercial experiences:
24/7 responsiveness
simple online forms
automated updates on requests
proactive information rather than reactive communication
AI plays a pivotal role in delivering this without dramatically increasing staff workloads.
For example:
AI can automatically categorise and route online requests.
Virtual assistants can handle after-hours or peak-time demand.
Predictive tools can identify issues before residents lodge complaints.
Councils that embrace these tools will be better positioned to enhance satisfaction and trust.
For CEOs, GMs, and Directors, one of the most transformative benefits of AI is its ability to provide real-time insights that were previously impractical or too resource-intensive to produce.
AI can improve:
asset lifecycle forecasting
financial modelling
risk scenario planning
disaster management and climate resilience
workforce planning
capital works prioritisation
Leadership teams can make decisions informed by accurate, up-to-date data instead of relying solely on historical reports or manual analysis.
2026 will be a turning point for Local Government in South Australia.
Councils that prepare now will be able to:
enhance service delivery
reduce risk
manage growing workloads
improve financial sustainability
build a future-ready workforce
strengthen community trust
Those that delay may face:
increased cybersecurity exposure
outdated systems unable to integrate with AI-enabled platforms
skill gaps that take years to catch up
missed opportunities for efficiency and cost savings
community frustration as expectations evolve
AI is no longer a “technology project” — it is an organisational capability and a leadership priority.
Council CEOs and executives should focus on three immediate steps:
Set clear expectations and decision boundaries.
Start small, measure impact, and scale.
AI success depends on secure, high-quality, well-managed data.