Australia's Productivity Commission has dropped its idea to let tech firms use copyrighted material to train artificial intelligence (AI) systems. The creative industry strongly opposed the plan, calling it a form of digital piracy. Instead, the commission has told the government to wait for three years before deciding on any new review of copyright laws around AI. Annabelle Herd, CEO of the Australian Recording Industry Association, said, "These findings reinforce what Australian creators and rights holders have consistently argued across 2025: our copyright system is robust, fit for purpose, and should be allowed to do its job in protecting the value of Australian culture." She added, "This report clearly affirms that Australia does not need new copyright carve-outs or regulatory shortcuts to enable artificial intelligence." Earlier, the commission had suggested a “fair dealing” exemption to copyright rules, which would allow AI companies to use copyrighted data and text to develop AI models specific to Australia. They argued that such use could help boost Australia's economy by creating AI tailored to local needs. Scott Farquhar, Atlassian co-founder and Tech Council of Australia chair, supported the move, saying fixing copyright rules could attract billions in foreign investment. But music bodies and other creative groups pushed back hard. Attorney General Michelle Rowland confirmed in October that the government will not allow any such exemptions, effectively ending the proposal. The commission said it chose to wait because of uncertainties. These include how AI-related copyright changes work overseas, the impact on new Australian content creation, and whether open web material could be licensed voluntarily without law changes. The report is part of five inquiries led by Treasurer Jim Chalmers to boost Australia’s economy. Danielle Wood, the commission chair, said productivity growth has slowed since 2016 and needs a push. She said, "We need to get productivity moving to ensure future generations can live better and more prosperous lives than those that came before them." The commission also made 47 other recommendations on workforce skills, health care, economic growth, and climate goals. It softened a proposal on corporate tax reform and offered budget-friendly alternatives to cut company tax while encouraging investment. Chalmers welcomed the report but noted, "We’ll take the time to consider them properly in the lead up to the next budget and beyond."