The Australian Taxation Office (ATO) has outsourced thousands of call centre roles to private operators, raising alarms about the impact on vulnerable taxpayers. These private operators, including US private equity-owned Probe Operations, Nasdaq-listed Concentrix Services, and British multinational Serco, have secured contracts worth $316.5 million, according to an analysis of government tenders. This outsourcing strategy, coupled with a $42.8 million contract with debt collector Recoveriescorp, highlights the ATO’s growing reliance on for-profit contractors.
Consumer advocates have voiced significant concerns regarding the outsourced model’s effect on vulnerable taxpayers. The Community and Public Sector Union’s deputy national president, Beth Vincent-Pietsch, noted that approximately 2,000 workers at these for-profit call centres are performing ATO work. She emphasized the disparity in pay and conditions between these workers and directly employed public servants, pointing out the higher cost to taxpayers and the reduced transparency and accountability.
Impact on Workers and Taxpayers
Private call centre staff earn significantly less than their public sector counterparts, with a typical hourly rate of $26.70, translating to an annual salary of about $52,800. This is in stark contrast to the $72,900 to $78,700 base annual salary for ATO’s directly employed call centre staff. The discrepancy is exacerbated by incentive structures that encourage shorter calls, potentially conflicting with the needs of vulnerable taxpayers who require more time and support.
While the ATO organizes training guides for contract staff, the actual training is often delivered by the private contractors themselves. This arrangement has led to concerns that call centre staff are “set up to fail” due to inadequate training and support compared to public sector employees.
Historical Context and Current Practices
The use of private contractors by the ATO is not new, initially intended to manage peak periods like tax time. However, the practice has evolved into what some describe as a “shadow workforce.” Despite a 2023 directive from the Labor government to reduce outsourcing of core agency roles, the ATO’s contracts with Probe, Concentrix, and Serco, which began in 2024, remain in place until mid-2026.
The ATO’s engagement with Recoveriescorp since 2022 marks its first use of an external debt collector since before the pandemic. Over 355,000 taxpayers, including welfare recipients, have been referred to Recoveriescorp, leading to complaints about aggressive debt collection practices.
Expert Opinions and Future Implications
Dr. Vivien Chen, a senior lecturer at the Monash Business School, argues that the use of private debt collectors can exacerbate already difficult situations for those experiencing vulnerability. “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 said. “Contact from debt collectors is stressful and aggravates the harm that victim survivors experience when fleeing violence.”
“Australian taxpayers contacting the ATO understandably assume they are speaking with an ATO employee, but may unknowingly be speaking with a private contractor who is not a public servant and not covered by the code of conduct.” – Beth Vincent-Pietsch
The ATO’s spokesperson stated that the agency supplements its workforce with outsourced contact centre providers to enhance capability. However, the spokesperson did not address specific questions about the number of call centre staff used by private contractors or the details of their bonus and incentive structures.
The ongoing reliance on private contractors raises questions about the ATO’s commitment to reducing outsourcing and ensuring that taxpayer interactions are handled with the necessary care and expertise. As the contracts continue, the debate over the efficacy and ethics of outsourcing critical public services is likely to intensify.
Moving forward, the ATO and government policymakers will need to address these concerns, balancing the need for efficient service delivery with the protection of vulnerable taxpayers and the integrity of public service standards.
