OP ED by Ben Malpass, Executive Vice President of Local Government, TechnologyOne
As the cost of managing and maintaining over $600 billion worth of assets continues to climb, councils across Australia are being challenged to keep a lid on rates, leaving little room to manoeuvre.
Councils are doing everything they can to absorb pressures in the short term, but many are reaching a tipping point. And, as they increasingly take on more responsibility beyond the three Rs – rates, roads, and rubbish – achieving long-term financial sustainability demands not just new thinking in 2026 – but new ways of operating.
Value-based AI application
We’ve been embedding AI for the past six years and, in my experience, AI has been overhyped for the past three years. As we head into 2026, I’m relieved to see the conversation shifting to value.
By replacing inflated promises with real-world value, we are now seeing AI’s true potential and how it can help LGAs do more with less in the areas they need it most.
Early digital movers – councils already immersed in AI application – are unlocking new levels of capability, automation, and efficiency. Over the next 12 months, these councils will be the ones to scale their AI-driven operations, achieving tangible gains, meaningful business outcomes, and real community benefits.
With admin often one of the largest expenses for councils, it’s no surprise AI use cases that streamline, speed-up and automate back-office processes are gaining significant traction.
From automating everyday tasks to producing reports and forecasting trends, AI now holds the potential to transform the core workings of local government, and many council leaders are energised to start driving change.
As this shift accelerates over the next few years, AI will transform staff’s efforts from high-volume processing to high-value productivity. Every hour saved on admin-heaving tasks will enable valuable resources to be redirected to community-facing services, benefiting everyday residents in the process.
Reactive to preventative operations
Councils continue to tackle the repercussions of decades-long ineffective asset management this year, but new strides in technology are enabling councils to shift from a position of reactivity to proactivity.
From road defects and fire warnings to swimming pool surveillance and parking enforcements, AI is being weaved into every facet of council operations.
For example, over 30 councils and state road authorities across ANZ have implemented AI and Machine Learning (ML) from Retina Visions to automate the defect inspection process. This innovation means councils no longer need to deploy additional staff or contractors for inspections, enabling them to fix issues before they become costly problems or risks to public safety.
Over the coming months, we expect to see these capabilities expand, giving councils the tools to detect issues even sooner, ultimately. maximising an asset’s performance, while minimising the financial burden.
This intelligent approach solves a genuine time-consuming and costly problem for councils, but most importantly it delivers on its promise by putting AI to work with people, not instead of them.
Council services with a human touch
As digital expectations rise, councils need to act more like service-led businesses. Three quarters of people now expect government services to match the quality and responsiveness of the private sector, according to PwC.
But, just like the private sector, they are also expected to retain the ‘human touch’. In fact, almost half of Australians believe it is essential to have a human available when using government services.
As councils roll-out more digital and self-service capabilities this year, preserving the human touch will become more important than ever.
Accessible services
Over the next five years, AI will empower every council – even the most risk-averse. But one of the most pressing issues right now is accessibility to existing digital services.
Our research shows only 55 percent of Australians use online local government services, suggesting the problem is not with the technology, but with the designers of the services not “sitting in the shoes” of users, especially those who lack the ability or confidence to use them.
We identified reoccurring pain points, including complex language, hard to find information, and time- consuming processes, that are ultimately driving increased reliance on traditional customer service channels, placing additional pressure on a resource-constrained industry.
With the right technology and a commitment to empathetic service design, councils across Australia can bridge the accessibility gap, unlocking the full potential of their digital investments.
Councils at the cross-section of innovation and empathy
From admin efficiencies to public safety and asset performance, a new wave of artificial intelligence-driven investment is taking place across the local government sector that could deliver a very different future to the past decade.
AI brings the innovation, but humans bring the empathy. Councils that place themselves at the cross- section of both in 2026 will be the ones to successfully optimise operations and sustainably reshape their service delivery.
