Greens Senator Barbara Pocock says Deloitte should be forced to repay its whole $440,000 for delivering a dodgy report. Photo: Region.
Pressure is building on consultancy giant Deloitte to repay all of its $440,000 fee for delivering a Federal Government report full of artificial intelligence-generated errors.
Even more pressure is on the government to force the big four firm to hand back all the money, despite the report being resubmitted without the AI mistakes.
Senate Estimates hearings this week have revealed that Deloitte has repaid almost $98,000 of its fee for the botched report it delivered to the Department of Employment and Workplace Relations (DEWR).
The report on an IT system used by DEWR to automate welfare penalties included non-existent academic references and a completely fabricated quote from a Federal Court judgment.
In addition to repaying almost 20 per cent of its fee, Deloitte has told the government it has instructed those who produced the report into the Targeted Compliance Framework (TCF) to undertake training in how to better use AI.
That’s simply not good enough for the Greens, who took the government to task over the bungled report and demanded to know what penalties would be imposed on the consultancy.
In a tag team of indignant rage, Greens senators Barbara Pocock and Penny Allman-Payne grilled government officials on Wednesday night (8 October) over retrieving only $97,587 of the fee paid to Deloitte, and for describing the firm’s behaviour as “troubling” rather than unethical.
Finance Department officials have admitted the agency only discovered Deloitte’s errors through media reporting.
Deloitte is making no public comment and is yet to apologise.
DEWR secretary Natalie James told Thursday morning’s hearing she was not at all happy with Deloitte and is expecting an apology.
“We should not be receiving work that has glaring errors in footnotes and sources,” she said.
“My people should not be double-checking a third-party provider’s footnotes.
“I am struck by the lack of any apology to us.”
Environment Minister Murray Watt (representing the workplace relations portfolio in the estimates hearing) agreed, adding that department processes needed to be improved due to the increasing prevalence of AI.
“We, of course, expect departmental processes to ensure that the quality of work received from consultants is high,” he said.
“I’m sure the department will reflect on what more can be done to avoid situations like this in the future.”
Senator Pocock described Deloitte’s work as “wilful negligence” and not something to be blamed solely on AI mistakes.
“This is expensive corner-cutting disguised as consultancy. Deloitte must issue a full refund for its shoddy work and offer an apology to the Australian people,” she said.
“Deloitte’s work would not pass a first-year university assessment test. What is the government paying for here?”
Senator Pocock said if contractors outsourced for government work are further outsourcing that work to AI, at the bare minimum, that work should be checked.
The case for outsourcing government work is to pay for a level of expertise that is not available in the public sector.
“Instead, the government received AI-generated corner-cutting. This should be a wakeup call for the government to consider stronger oversight of AI-generated material in contracted work,” she said.
“Who is regulating the system of contracting? Deloitte should have informed DEWR of its breach. Instead, the government is relying on whistleblowers and the media to uncover unethical behaviour from government contractors.”
The Greens have urged the government to ban the outsourcing of core government work to “dodgy contractors” and to support their bill to introduce bans for up to five years on Commonwealth work for suppliers who engage in unethical behaviour.
Despite the bungled first attempt, Deloitte’s report confirms that hundreds of thousands of welfare recipients face payment suspensions every year under a system whose lawfulness can’t be assured.
Senator Allman-Payne, who is the Greens’ social services spokesperson, noted that the government won’t even say the TCF is lawful.
“These payments can be the difference between food on the table or going hungry,” she said.
“If Labor can’t defend the system, they should end the TCF and stop suspending payments immediately.”
Deloitte’s report was initially released in July, sparking concerns from academics that it contained numerous inaccuracies, most likely the result of what are known as “hallucinations” by generative AI. Such hallucinations occur when AI user prompts are answered with invented quotes and references.
