AI models: cheaper, stronger models, released in stages
Two of the large AI companies released new models in the last week. Both point the same way: more capable models at lower prices, with some of the most powerful models released in stages.
Google announced Gemini 4 Argon on 30 September. Google aims it at long, complex work such as software engineering, legal and finance tasks, and finding and fixing security weaknesses in software.1 It is not generally available yet. It is first going to a group of trusted cyber security defenders through a Google program, and Google says paid API customers and Google AI Ultra subscribers will be next. The API is the connection other software uses to reach the model. Google lists introductory prices of $2 per million input tokens and $10 per million output tokens, rising to $4 and $20 after the introductory period.1 A token is a small chunk of text, roughly part of a word.
OpenAI released GPT-6.1 Sol at its developer event. A launch post on OpenAI's developer forum lists API prices of $2 per million input tokens and $10 per million output tokens, the same as the GPT-6 Sol model it replaces, with cheaper rates for repeated input.2 The same post reports a score of 71.4% on OSWorld 2.0, a test of how well a model can operate a computer, against 73.5% for the more expensive GPT-6 Astra model, at about one-seventh of Astra's cost per task.2 In ChatGPT it is available to Plus, Pro, Business, Enterprise and Edu users in ChatGPT Work and Codex, but not yet in the main chat.3
What it means for a small business: the AI built into everyday tools keeps getting cheaper to run, and that tends to flow through to the apps you use. The test scores come from the companies themselves. Try any new tool on your own real work, such as drafting a quote or summarising a long email chain, before relying on it.
AI trends: voluntary promises abroad, hard questions at home
On 29 September, leaders of Anthropic, Google, Meta, OpenAI, Nvidia and xAI signed a voluntary AI safety accord at the White House. The companies commit to internal controls, an independent external auditor and a board committee to review the auditors' reports.4 The accord is not legally binding. It says that over time it may make sense to turn these steps into law.4 For transparency, this brief is written with Anthropic's Claude.
In Australia, the Senate inquiry into AI and data centres asked the chief executives of OpenAI and Anthropic to appear at a hearing in Canberra on 1 October. Both declined, citing the short notice.5 The request followed the June access of a Medicare statistics portal by an OpenAI AI agent (software that can act on its own, not just answer questions). Anthropic asked for another date and said it would send executives from the US and Australia, without saying which hearing. OpenAI's chief strategy officer is due to appear before a separate parliamentary committee on AI in Sydney on 6 October.5
The federal government is also consulting on rules for large data centres and AI training in Australia. Submissions close on 9 October.6 The paper forecasts that data centres' electricity use in the National Electricity Market (the east coast grid, which does not include WA) could grow from about 5 terawatt hours in 2025-26 to 34 terawatt hours by 2035-36.6
The most practical news for businesses came from the privacy regulator. On 30 September the OAIC published guidance on a new rule that starts on 10 December 2026. Organisations covered by the Privacy Act that use a computer program to make or inform decisions that significantly affect people's rights or interests must say so in their privacy policy. They must list the kinds of personal information used and the kinds of decisions involved.7 The guidance includes a fact sheet and a flowchart, and the OAIC says it reflects 90 written submissions.7
Most small businesses with annual turnover of $3 million or less are not covered by the Privacy Act. There are exceptions, including health service providers, businesses that trade in personal information and Commonwealth contractors.8
Work software: AI instructions you can reuse, and a billing change to watch
Google is adding "skills" to Gemini in Workspace and the Gemini app. A skill is a saved set of instructions, such as your business's writing style, that you can reuse and combine in the Gemini app and most Workspace apps.9 The rollout in Workspace started on 5 October and should finish by mid-November, across Business Starter, Standard and Plus and the Enterprise editions. Skills will replace Gems, Google's earlier custom assistants. Business and enterprise users lose Gems from 1 March 2027, when they will be automatically moved to draft skills.9 If your team has built Gems for quotes, emails or customer replies, plan to check them after the move.
Microsoft told its resellers that, from 1 December 2026, new Microsoft 365 Copilot Business licences bought through its Cloud Solution Provider program will have usage-based billing switched on by default. That means extra AI features are charged by use, with a default limit of 4,000 Copilot Credits per user per month that administrators can change.10 The change will not be available in Australia at first.10 It is still worth knowing about. Pay-as-you-go AI charges are becoming common, so ask your IT provider how usage is limited and who gets the bill before you switch new features on.
Workforce: a fourth rate rise as inflation climbs
The Reserve Bank raised the cash rate by 0.25 percentage points to 4.60% on 29 September, in a unanimous decision.11 The board said inflation remains elevated, some of the risks it flagged in August are happening, and businesses are facing cost pressures and are raising prices or looking to do so. It noted that the labour market has eased broadly as expected.11 It was the fourth rise of 2026 and takes the cash rate to its highest level since November 2011. The ACTU estimated the rise adds about $110 a month to repayments on an average mortgage of $731,000.12
The next day, the ABS reported that consumer prices rose 4.0% in the 12 months to August, up from 3.5% in July. Trimmed mean inflation, which strips out the biggest price moves, was 3.6%.13 Electricity prices rose 13.2% over the year as Commonwealth rebates ended, and fuel rose 13.5%.13
Demand for workers is cooling slowly. The ABS counted 325,000 job vacancies in August (seasonally adjusted), down 0.9% over the quarter and 1.3% over the year. Private sector vacancies fell 2.0% over the quarter.14 The national unemployment rate was 4.6% in August, and the September figures are due on 15 October.15
Perth and WA: confidence recovers a little, costs hit a five-year high
Prices are rising faster in Perth than nationally. Perth's consumer prices rose 4.3% over the year to August, and 0.6% in the month.13
WA had 40,900 job vacancies in August in original terms, down 5.1% over the quarter but up 0.9% over the year.14 The state's unemployment rate was 4.5% in August (seasonally adjusted), or 4.4% in trend terms.15
CCIWA's business confidence survey for the September quarter, released on 1 October, found 80% of WA businesses named rising costs as a barrier to growth. That is the highest share since CCIWA first asked the question in 2021.16 The hardest hit were retail trade at 89%, resources at 88% and construction at 87%.16 Confidence recovered a little after a sharp fall in June. 40% of businesses expect conditions to improve over the next 12 months, up 15 points, although CCIWA says confidence is still in negative territory on its longer-term index.16
Labour shortages eased slightly. 56% of businesses named skilled labour shortages as a constraint, down 3 points from June.16 Just over half (52%) named government regulation and compliance as a major barrier.16
What it means for service businesses and trades
Whether you run a cleaning company, an IT support firm, a plumbing business or a small agency, a few steps follow from this week's news.
- Check your prices against your costs again. Fuel and electricity both rose more than 13% over the year to August, and Perth inflation is 4.3%.13 If you have not reviewed your hourly rates, callout fees and standard quotes this year, do it now. Look at vehicle and power costs as well as wages.
- Plan for higher borrowing costs. Equipment finance, vehicle loans and overdrafts are likely to cost more after another rate rise, and the RBA has said it may lift rates again.11 Check your repayments and your cash buffer before committing to a big purchase.
- Work out whether the December privacy rule applies to you. First check whether your business is covered by the Privacy Act. If it is, list any software that makes or shapes decisions about customers or staff, such as automatic credit checks, applicant screening or automated pricing, and update your privacy policy before 10 December. The OAIC's new fact sheet and flowchart are the place to start.7
- Review AI tools before new charges arrive. With pay-as-you-go AI billing spreading and Gems being replaced by skills, make a list of the AI features your team uses, what each costs, and who can switch new ones on.
- Keep training on the table. More than half of WA businesses still report skill shortages.16 A trainee or apprentice can be a practical way to build skills when experienced staff are hard to find, and CCIWA is calling for stronger apprenticeship and traineeship policies.16
