Australian tech billionaire Mike Cannon-Brookes has urged governments to plan for massive job disruption, warning the country faces a “painful” transition.

The co-founder of software giant Atlassian said automation was going to cause upheaval in the local workforce.

“I hate being Chicken Little and trying to scare people but it seems to be the only way to get action – there will be massive job disruption,” Mr Cannon-Brookes told a Senate inquiry on Tuesday.

While many new jobs will be created by technology, people who lose jobs in other sectors do not face a smooth transition, he said.

Mr Cannon-Brookes says Australia faces the major challenges of upskilling workers, making education a life-long process, ensuring post-disruption employment is created locally and providing support to people who lose their jobs.

“This time we know what’s coming. I think we must act and act soon,” he said.

Mr Cannon-Brookes, who Forbes estimated to have a fortune of $US3.4 billion ($4.35 billion) last week, also had a warning for the retail sector.

“The head-in-the-sand attitude of Australian businesses scares me a lot,” he said. “Amazon is going to tear apart Australian retail as they did in the US.”

But Mr Cannon-Brookes has offered some green shoots. He believes Australia is capable of building a world-class technology industry and skills to manage disruption.

“Technology is the single greatest competitive advantage in business today. It’s eating every industry in the world.”

-AAP