Significant concerns have been raised about how the Australian Taxation Office's reliance on outsourced call centres is impacting vulnerable taxpayers, with revelations that private contractors pay workers substantially less than public servants while using performance targets that may compromise service quality.
Multi-Million Pound Contracts with Private Operators
The Australian Taxation Office has outsourced thousands of call centre positions to three major private operators: US private equity-owned Probe Operations, Nasdaq-listed Concentrix Services, and British multinational Serco. According to government tender analysis, these contracts are collectively worth approximately £190 million.
This substantial outsourcing arrangement is separate from the ATO's additional £25.7 million worth of contracts with private equity-owned debt collection agency Recoveriescorp, highlighting the extensive dependence on for-profit contractors to handle the government's primary revenue collection operations.
Workers 'Set Up to Fail' with Lower Pay and Call Targets
Beth Vincent-Pietsch, deputy national president of the Community and Public Sector Union, revealed that approximately 2,000 workers at for-profit call centres are now performing ATO work. She expressed serious concerns about the arrangement, stating these workers receive lower pay and conditions than directly employed public servants while costing taxpayers more with reduced transparency.
Call centre staff at one private operator typically earn £15.40 per hour, equating to an annual salary of approximately £30,500 - significantly below the Australian Public Service rates. Direct ATO call centre employees typically receive between £42,100 and £45,400 annually, representing a pay gap of over £11,500.
The situation is compounded by performance incentives that reward staff for keeping calls brief, creating potential conflicts when dealing with vulnerable taxpayers who often require more extensive assistance and support.
Vulnerable Taxpayers at Risk
Consumer advocates have raised alarms about how this outsourced model affects vulnerable taxpayers, particularly amid increasing complaints to the tax watchdog about the agency's debt collection practices. Dr Vivien Chen, senior lecturer at Monash Business School, highlighted that private debt collection can exacerbate difficult situations.
"We know of people being pursued for tax debts who are experiencing vulnerability, including victim survivors of family violence who are coerced into tax debts as a result of financial abuse," Chen explained. "Contact from debt collectors is stressful and aggravates the harm that victim survivors experience when fleeing violence."
More than 355,000 taxpayers have been referred to Recoveriescorp since 2022, including welfare recipients who have complained about heavy-handed approaches. This represents the ATO's first use of external debt collectors since before the pandemic.
Government Directive Ignored
Despite a 2023 directive from the Labor government for all agencies to "move away from outsourcing work that is the core role of the APS or the agency," the ATO has continued and expanded its private contracting arrangements. The substantial contracts with Probe, Concentrix and Serco took effect in 2024 and run until mid-2026, well after the government's policy announcement.
While private contractors were originally intended to manage seasonal peaks like tax time, they have evolved into what the union describes as a "shadow workforce" performing core ATO functions. The ATO declined to comment on specific numbers of call centre staff used by private contractors or questions about bonus and incentive structures.
An ATO spokesperson stated that external suppliers provide additional capability and that all staff, including outsourced contact centres, are expected to ensure appropriate support for taxpayers experiencing vulnerable circumstances during debt recovery actions.
