Deloitte Australia has admitted that a four hundred forty thousand dollar report it produced for the federal government was generated using artificial intelligence, complete with fake academic references and even a made-up Federal Court quote. The firm now says it will issue a partial refund — the corporate equivalent of shrugging and handing back loose change after being caught red-handed.

The report, commissioned by the Department of Employment and Workplace Relations, was supposed to provide serious analysis of welfare compliance. Instead, it turned out to be what many describe as an AI-generated hallucination dressed up as consultancy. The revised version quietly uploaded by Deloitte removed the fake sources and confirmed that Azure OpenAI GPT-4o was used in drafting the document.

Deloitte insists that its “core findings” remain valid — a statement that would be funny if taxpayers weren’t paying for it. Critics, including lawmakers and academics, have branded the episode a symptom of corporate laziness, where multimillion-dollar firms now outsource thinking to chatbots and still collect premium fees.

But the scandal runs deeper than Deloitte’s sloppy reliance on AI. It exposes a broader pattern of government departments throwing taxpayer money at consulting giants for what increasingly looks like digital snake oil. Despite repeated audit warnings about wasteful consultancy spending, the cycle continues — inflated invoices, unverified reports, and political silence.

So far, no official has explained why a government swimming in economic warnings continues paying elite firms for work that could have been written in a single prompt. Accountability, like the report’s citations, appears to be missing in action.