From whistleblower to parliamentary inquiry, Deloitte is navigating a turbulent period in Australia.
It is criticized for its use of generative AI in a consulting engagement for the Department of Employment and Workplace Relations. On one hand, because it was not disclosed. On the other, because this AI (GPT-4o) fabricated sources and judicial precedents.
The mission, conducted from late 2024 through mid-2025, culminated in a 237-page report. Topic: the Targeted Compliance Framework (TCF). This system, implemented in 2018, automates the assessment of jobseekers’ situations—and the possible imposition of financial penalties. Deloitte observes, broadly speaking, that the underlying algorithm, beyond its lack of transparency, is disproportionately punitive.
The initial report carried a dated July 4. An updated version was released on September 26. The main content remained the same, but the problematic quotes disappeared. And Deloitte noted in an annex that AI had been used.
Deloitte Had Initially Mentioned a ‘Transcription Issue’
A researcher at the University of Sydney raised the issue in August. He noted that the report attributed to some of his colleagues works they had not produced. Subsequently, among other things, a reference to a nonexistent judicial decision was found in a case involving the government and a citizen over the so-called robodebt system (automatic debt assessment and collection).
An agreement appears to have been reached with Deloitte for the reimbursement of about AUD 100,000 of the AUD 440,000 cost of the engagement.
Green Senator Barbara Pocock argues that the full amount should be refunded. She justifies this, in part, by Deloitte’s actions after the matter came to light. On one hand, the firm initially told the Department of Employment that it was a “transcription issue.” On the other, it contacted the Department of Finance claiming that the report’s sponsors were aware of the AI usage. This was raised during a Senate hearing.
How we ‘fess up when we mess up shows who we are. Pay it all back Deloitte. And apologise. Give yrsrlf some procurement teeth Labor: the capability to ban for poor behaviour, commensurate with the misdemeanour, up to 5 yrs. pic.twitter.com/BAnrek1Uz5
— Barbara Pocock (@BarbaraPocock) October 9, 2025
Murray Watt, the Minister for Employment when the Deloitte contract was signed, called it a “clearly unacceptable” act. He regrets the absence of apologies, including to those to whom the AI had falsely attributed certain works.
In this context, the Department of Finance decided to tighten the oversight of future contracts with any consultant. Any potential use of AI would have to be disclosed, identifying tools and purposes.
* The Greens are the third-largest political force in the Australian Senate, with 10 seats, compared with 29 for the Labor Party and 27 for the opposition coalition.
