AI Governance in Australia: From Policy to Practice; What the APS AI Plan 2025 Means for CISOs and CIOs

Australia’s public sector sets the pace for responsible AI.

Australia’s public sector has reached a critical point in its digital evolution. The Australian Public Service (APS) AI Plan 2025, released in November 2025, outlines a structured, trust-centric approach to adopting and governing artificial intelligence across government.

Yet its impact extends far beyond the public sector.

For CISOs, CIOs, and technology leaders across industries, this plan defines how governance, security, and accountability must underpin AI adoption — ensuring innovation does not compromise compliance or public trust.

In an era when AI decisions increasingly influence risk, policy, and operations, the APS plan provides a timely reference point for organisations navigating the same challenges.

The framework: Trust, People, and Tools

The APS AI Plan centres around three pillars:

• Trust: Strengthening transparency, ethics, and oversight through the creation of an AI Review Committee and updated government AI policies.
• People: Uplifting workforce capability through mandatory AI literacy programs and the appointment of Chief AI Officers (CAIOs).
• Tools: Providing secure, fit-for-purpose infrastructure such as GovAI and GovAI Chat, ensuring sovereignty and consistent governance.
• These pillars translate into a blueprint for all sectors: building AI maturity through structured governance, capable people, and secure technology ecosystems.

Trust as a measurable security outcome

The APS plan highlights a simple but powerful truth, innovation cannot outpace trust.

For private organisations, that means embedding AI governance frameworks that are transparent, explainable, and compliant with Australia’s legal and ethical standards. The same governance expectations that guide public agencies, including adherence to the Australian Privacy Principles (APPs) and the Protective Security Policy Framework (PSPF), apply equally to enterprises managing sensitive data or automating decision-making.

CISOs and CIOs should ensure their governance models include:

• AI impact assessments aligned with risk-management practices defined in the Information Security Manual (ISM).
• Clear accountability mapping, where each AI deployment has an identifiable data owner and risk custodian.
• Ethical transparency, including documentation of data provenance, model bias testing, and explainability criteria.
• Trust becomes measurable only when governance is codified — when every AI-driven process is traceable, auditable, and accountable.

Cybersecurity and compliance: the dual foundation

AI introduces both capability and complexity. It accelerates detection, prediction, and automation, but also expands the attack surface.

The APS AI Plan directly addresses this by aligning AI adoption with cybersecurity frameworks such as the ISM, IRAP, and the Privacy Act 1988.

Private enterprises can mirror this model by integrating AI controls within their Information Security Management System (ISMS), particularly if certified or aligned with ISO/IEC 27001 or ISO/IEC 42001 (AI Management Systems).

Key security imperatives includes:

• ISM alignment: Ensure AI systems follow the ISM’s principles for confidentiality, integrity, and availability, particularly around privileged access, model storage, and encryption.
• IRAP assessments: When using third-party AI services or cloud infrastructure, validate compliance through IRAP-assessed environments, confirming that AI workloads meet Australian Government security standards.
• Essential Eight maturity: Integrate the Essential Eight Maturity Model as a practical baseline to harden AI-connected systems against compromise. Patching, application control, and multi-factor authentication remain as vital to AI platforms as to any ICT environment.
• Continuous monitoring: Incorporate AI activity within Security Operations Centre (SOC) visibility, ensuring model training data, API interactions, and user access are logged and monitored.
• Embedding these controls transforms AI from a perceived risk into a governed capability.

Governance meets human capability

The APS plan recognises that AI governance succeeds only when people are capable of applying it. Every public servant will undertake AI literacy training, and every agency will designate a Chief AI Officer responsible for adoption and oversight.

Private organisations can adopt similar approaches by:

• Developing AI governance committees that unite technology, compliance, legal, and human-resources leaders.
• Implementing mandatory AI ethics and security training across departments.
• Enabling controlled experimentation, allowing teams to trial AI tools safely within IRAP-assessed environments.

Building capability is not a compliance exercise, it is a cultural shift. When employees understand both the potential and the risks of AI, organisations can innovate confidently and responsibly.

Infrastructure and sovereignty: secure by design

The APS AI Plan’s Tools pillar introduces GovAI, a secure Australian-based AI hosting environment, and GovAI Chat, a government-wide generative-AI assistant. Both prioritise data sovereignty, ensuring that sensitive data remains on-shore and within accredited environments.

This sets a precedent for enterprises managing regulated data.

CISOs and CIOs should:

• Prioritise sovereign or IRAP-assessed cloud services for AI workloads.
• Maintain central AI use-case registries to track deployments, datasets, and risk levels.
• Avoid vendor lock-in by adopting interoperable and model-agnostic architectures.

Data residency, transparency, and interoperability are no longer optional, they are the new compliance frontier.

Ethics, transparency, and explainability

Beyond technical safeguards, the APS AI Plan emphasises ethical accountability, ensuring AI outcomes are explainable and human-centric. For industry, this means mapping ethical principles to measurable controls.

Organisations should reference the Department of Industry, Science and Resources’ AI Ethics Principles, which complement existing standards under ISO/IEC 42001. These principles, fairness, reliability, accountability, and human oversight can be operationalised through:

• Bias testing in AI models before deployment.
• Human-in-the-loop verification for critical decisions.
• Transparent data labelling and audit trails for training data.

Ethical assurance builds trust with customers, regulators, and shareholders alike.

The link to the Essential Eight: building AI maturity

The Essential Eight Maturity Model, developed by the Australian Cyber Security Centre (ACSC), provides a robust framework for improving cyber resilience. It also applies directly to AI ecosystems.

When integrated with AI governance, the Essential Eight enhances control in three key areas:

1. Application control and patching reduce the risk of compromised models or third-party plug-ins.
2. Multi-factor authentication and restricted privileges protect AI platforms from misuse or data exfiltration.
3. Regular backups and recovery testing ensure model integrity and continuity.

In short, the Essential Eight is the operational backbone of secure AI. Pairing it with governance frameworks such as ISO/IEC 27001 and ISO/IEC 42001 creates a holistic assurance posture, one that balances innovation and defence.

How Risk Associates supports AI governance and compliance readiness

Across its two-decade legacy in information-security certification and assessment, Risk Associates continues to assist organisations in aligning innovation with compliance.

Through risk-based audits and governance alignment, Risk Associates supports organisations in:

• Mapping AI governance maturity across compliance domains.
• Aligning AI frameworks with standards such as ISO/IEC 27001, ISO/IEC 42001, PCI DSS, and NIST CSF.
• Conducting readiness assessments referencing ISM, IRAP, and Essential Eight benchmarks.
• Assuring data-protection compliance in accordance with the Australian Privacy Principles (APPs).

By focusing on readiness — not reaction — Risk Associates helps leaders operationalise trust, building AI ecosystems that are secure, auditable, and future-compliant.

Strategic takeaways for CISOs and CIOs

The APS AI Plan provides a clear model for AI-ready governance. For enterprise leaders, the strategic takeaways are:

1. Governance first, deployment second — formalise AI policies before expanding use cases.
2. Embed compliance — align every AI initiative with ISM controls, IRAP assurance, and APP obligations.
3. Integrate security frameworks — apply the Essential Eight as baseline protection for AI environments.
4. Empower people — combine AI literacy with ethical leadership.
5. Measure trust — audit AI systems regularly for transparency and explainability.

Together, these actions create sustainable AI maturity — where governance, compliance, and performance advance in unison.

Looking forward: from compliance to continuous assurance

The APS AI Plan 2025 demonstrates that governance is not a barrier to innovation but its enabler. It proves that structured oversight, workforce capability, and secure infrastructure can coexist with technological agility.

For Australian CISOs and CIOs, the next phase of digital transformation will be defined by continuous assurance — where compliance frameworks such as ISM, IRAP, and the Essential Eight operate alongside ISO and AI management standards to maintain resilience.

As AI systems increasingly shape decision-making, leaders must ensure they are explainable, auditable, and secure by design. That shift — from compliance to assurance — will define the resilience and reputation of every modern enterprise.

FAQs – Frequently Asked Questions

The APS AI Plan 2025 sets a national precedent for how artificial intelligence can be scaled responsibly, with governance, capability, and ethics at its core.

For Australia’s CISOs and CIOs, it is a call to action: to embed trust as infrastructure, integrate security as culture, and ensure that every intelligent system operates within a framework of accountability and assurance.

Because in the era of governed intelligence, resilience is not achieved through technology alone, it’s achieved through verified trust.