The Australian Taxation Office (ATO) has outsourced thousands of call centre roles to private operators, raising concerns 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 government tender analysis. The move has sparked criticism over lower wages and a profit-driven approach that may not adequately support taxpayers in need.
In addition to these contracts, the ATO has agreements worth $42.8 million with private equity-owned debt collector Recoveriescorp. This outsourcing strategy highlights the ATO’s growing reliance on for-profit contractors, which now serve as its primary public interface. Consumer advocates have expressed significant concerns, noting an increase in complaints about the agency’s debt collection practices.
Concerns Over Worker Conditions and Pay Discrepancies
Beth Vincent-Pietsch, deputy national president of the Community and Public Sector Union, revealed that approximately 2,000 workers at these for-profit call centres are performing ATO work. She highlighted the disparity in pay and conditions between these workers and directly employed public servants, emphasizing that the cost to taxpayers of these private contracts is higher and lacks transparency.
“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,” Vincent-Pietsch stated. She added that the call centre staff employed by contractors are “set up to fail” due to inadequate training and support compared to public sector employees.
Incentive Structures and Pay Rates
Call centre staff at one private operator reportedly earn $26.70 per hour, equating to an annual salary of about $52,800. This rate is based on the contract call centre award for a level 2 clerical office worker. Workers can increase their pay by meeting call handling targets, incentivizing shorter calls. This approach may conflict with the needs of vulnerable taxpayers who require more time-consuming assistance.
Probe, Serco, and Concentrix declined to comment on their pay rates and incentive structures, directing inquiries to the ATO. The union noted that private contractor pay levels are significantly below the Australian public service rates, where ATO call centre employees typically earn between $72,900 and $78,700 annually.
The Role and Impact of Outsourcing
While the ATO has long utilized private contractors, they were initially intended to manage peak periods, such as tax time, not to serve as a permanent workforce. An ATO spokesperson stated that the agency supplements its workforce with outsourced contact centre providers to enhance capability.
“The ATO currently engages external suppliers, including Serco, Concentrix, and Probe, to deliver a range of contact centre services, including telephony, processing work, and debt collection,” the spokesperson explained. They added that all staff, including those at outsourced centres, are expected to provide appropriate support to taxpayers in vulnerable circumstances.
The ATO’s reliance on private contractors increased under recent Coalition governments and has persisted despite a 2023 Labor government directive to reduce outsourcing of core agency roles. Large contracts with Probe, Concentrix, and Serco took effect in 2024 and will run until mid-2026, according to public tender information.
Implications for Vulnerable Taxpayers
The ATO has signed repeat contracts with Recoveriescorp since 2022, marking its first use of an external debt collector since before the pandemic. More than 355,000 taxpayers have been referred to Recoveriescorp, including welfare recipients who have complained about aggressive collection practices.
A Recoveriescorp spokesperson stated that the company is committed to respectful customer treatment and adheres to formal debt collection guidelines. However, Dr. Vivien Chen, a senior lecturer at the Monash Business School, warned that the use of private debt collectors could 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 said. “Contact from debt collectors is stressful and aggravates the harm that victim survivors experience when fleeing violence.”
While the government has banned Centrelink from using external debt collectors for social security debts following the robodebt scandal, the ATO is still permitted to use them for tax debt recovery, even among welfare recipients.
The situation underscores the challenges faced by vulnerable taxpayers and raises questions about the balance between efficiency and empathy in public service delivery. As the contracts continue, stakeholders and policymakers will need to consider the broader implications of outsourcing critical government functions to private entities.
