Greens Senators Barbara Pocock and Penny Allman-Payne have grilled the Government in Senate estimates over the bungled Deloitte report into the Targeted Compliance Framework (TCF).
During questioning from Senator Barbara Pocock at a Senate estimates hearing last night, the Finance Department revealed that Deloitte had refunded just $97,587 (less than a quarter) of the $440,000 contract. Finance admitted that it had discovered Deloitte's errors through media reporting but still said Deloitte's behaviour was "troubling" rather than unethical.
Deloitte is yet to apologise for the bungle in which it used AI to produce a review of the Targeted Compliance Framework, the IT system used to automate welfare penalties and payments from income support. The big 4 firm's report was found to have numerous errors including non-existent academic references and fabricated quotes. This morning Minister Murray Watt agreed with DEWR Secretary Natalie James that Deloitte should apologise.
The Greens have urged the Government to ban the outsourcing of core government to dodgy contractors and to support the Greens' bill to introduce bans for up to 5 years on Commonwealth work for suppliers who engage in unethical behaviour.
The substance of the Deloitte report, notwithstanding the issues with the report's production, confirms that hundreds of thousands of welfare recipients face payment suspensions every year under a system whose lawfulness can't be assured. The Department will face further questions on its continued operation of the system in light of this report later this afternoon.
As stated by Greens spokesperson for finance and public sector Senator Barbara Pocock:
"Deloitte's bungled report isn't just artificial incompetence, it's wilful negligence. 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.
"Deloitte's work would not pass a first-year university assessment test. What is the Government paying for here? If the contractors outsourced to do government work are further outsourcing that work to AI - at the bare minimum, you'd expect this work to be checked - that's not too much to ask.
"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.
"Who is regulating the system of contracting? Deloitte should have informed the Department of Workplace Relations (DEWR) of its breach. Instead, the Government is relying on whistleblowers and the media to uncover unethical behavior from government contractors. The current code of conduct is clearly inadequate to deal with unethical behavior - the Government must act now to regulate and ensure the quality of work that it's paying for.
"The Government should not be contracting out core program analysis like this to AI via consultants when this work can and should be done by our public service.
"Dodgy contracting work, like that of Deloitte and PwC, is the reason why the Greens introduced a bill to parliament last sitting week. We want to ban any potential supplier, who has engaged in unethical conduct from getting Commonwealth work for up to five years."
As stated by Greens spokesperson for Social Services, Senator Penny Allman-Payne:
"Hundreds of thousands of welfare recipients lose access to payments every year, and Labor have said they can't even say if it's lawful."
"These payments can be the difference between food on the table or going hungry. If Labor can't defend the system they should end the TCF and stop suspending payments immediately."
Further background on Targeted Compliance Framework and calls to end payment suspensions
The Department this morning reiterated that it stood by the findings of the Deloitte report into the Targeted Compliance Framework, the system which operationalises the suspension and cancellation of payments from income support recipients for not meeting so-called 'mutual obligations'.
The report found "substantial issues" across multiple dimensions of the TCF's operations and delivery, and Deloitte could not assure the Government of the TCF's alignment with the law, despite that system being responsible for withholding hundreds of thousands of welfare payments every year.
The Greens have called on Labor to stop all welfare payment suspensions under the system immediately, following serious legal doubts raised by the Deloitte report and a related report by the Commonwealth Ombudsman calling the system into question. The Department will face further questions on its continued operation of the system in light of this report later this afternoon.
The Commonwealth Ombudsman's recent report into the Targeted Compliance Framework found over 1,000 welfare recipients had their welfare payments unlawfully cancelled by the automated system over two years.
In echoes of Robodebt, a recent Commonwealth Ombudsman's report slammed the Government for being slow to act on legal advice which suggested the TCF was unlawful, and that it took them almost a year to pause cancellations and reductions in welfare debts. Meanwhile, harmful payment suspensions continue to this day.
While the Department has 'paused' the cancellation and reduction of payments under the TCF following legal advice that it was unlawful, tens of thousands of welfare recipients are still subject to payment suspensions every month. Nearly 350,000 payment suspensions were issued just in the first quarter of 2025, affecting more than 280,000 people out of the roughly 800,000 who had requirements during the period.1
Given the extreme legal uncertainty around the Targeted Compliance Framework and the known harm caused to welfare recipients, the Greens have called for the government to end payment suspensions, a call backed by the Antipoverty Centre, Economic Justice Australia and the Australian Council of Social Service.
