Will the $155b data centre boom pay off for us all?

June 29, 2026 — 5:15am

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Commodity booms have been a huge part of Australia’s economic fabric and sometimes even the national identity. Think of the 19th-century gold rushes that sparked mass immigration, the post-Second World War period where the wool trade was so important it was said we were “riding on the sheep’s back”, or the massive China-fuelled resources boom of earlier this century.

Lately, however, there’s another spending surge that’s got the economic world talking: the explosion in plans to build big sheds full of computers.

Investment in data centres could rival the size of past mining booms, and the government is keen on attracting this money to Australia, albeit with conditions. Westpac estimates it’s a $155 billion pipeline: an enormous sum.

But looking beyond the mammoth numbers, how much does this bonanza really help the economy? Don’t huge booms often cause economic headaches as well as gains? How can we avoid those pitfalls this time around?

When there’s a huge spending spree, it inevitably helps the economy to some extent, but don’t be misled by the huge numbers on data centres. I’m not convinced the economic benefits are as great as they may seem. There are also lessons we can learn from past resources booms, which gave the economy a short-term boost but also left us with longer-term problems.

First though, there’s no denying the scale of data centre spending. HSBC reports that Australia’s data centre investment is either fourth- or sixth-highest in the world, depending on how it’s measured. IT companies’ spending on equipment soared to a record high of $11.8 billion in the year to March.

So many data centres are being built, or at least planned, because tech companies are betting we’ll need them to meet soaring........

© The Sydney Morning Herald