SYDNEY: Australia will set up an advisory body to mitigate against the risks of artificial intelligence, the government said on Wednesday, becoming the latest country to increase its oversight of the technology.

The government also said it planned to work with industry bodies to introduce a range of guidelines, including encouraging technology companies to label and watermark content generated by AI.

Science and Industry Minister Ed Husic said AI was forecast to grow the economy, but its use in business was patchy.

"There's also a trust issue around the technology itself and that low trust is becoming a handbrake against the uptake of technology and that's something we've got to confront," he told reporters.

Australia established the world's first eSafety Commissioner in 2015, but has lagged some other nations in the regulation of AI.

The initial guidelines will be voluntary, in contrast to other jurisdictions including the European Union, whose rules on AI for technology companies are mandatory.

Australia opened a consultation into AI last year that received more than 500 responses.

In its interim response, the government said it wanted to distinguish between what it called "low risk" uses of AI like filtering spam emails and "high risk" examples such as the creation of manipulated content, also known as "deep fakes".

The government plans to release a full response to the consultation later this year.