An outsource call centre operator for Centrelink, Telco Services Australia, has reportedly paid no corporate tax over a two-year period, despite securing a significant government contract. The Perth-based company generated over $185 million in revenue during the 2024-25 financial year, yet reported no taxable income, according to newly released financial documents.
In the previous year, Telco Services Australia also reported an income of $130 million but similarly paid no tax. This two-year tax-free period coincides with the company’s $90 million-plus contract to manage call centre operations for Services Australia, the agency overseeing social security.
Corporate Structure and Tax Practices Under Scrutiny
Jason Ward, principal analyst at the Centre for International Corporate Tax Accountability and Research, commented on the company’s financial structuring, suggesting it might be designed to avoid tax obligations in Australia. He emphasized the need for greater transparency from entities bidding for public contracts.
The financial documents, submitted on Christmas Eve, revealed $166.5 million in related party transactions last year at Telco Services. The lack of detail regarding these related parties raises questions about the company’s financial practices. Ward noted these transactions “virtually eliminate profits,” resulting in no tax liability.
“The federal government should subject those bidding for public contracts to higher levels of transparency.” — Jason Ward
Company’s Defense and Operational Overview
Telco Services, a branch of the larger TSA Group, operates from Perth and employs over 4,300 workers across five contact centres in Australia and the Philippines. Alongside its government contract, TSA Group manages outsourced operations for major corporations such as Telstra and NRMA Insurance.
A spokesperson for TSA Group clarified that while Telco Services reported no taxable income, other associated entities did pay the appropriate taxes. These arrangements were reviewed by an independent auditor. The spokesperson also noted that Telco Services had fulfilled its tax obligations in previous years.
“The taxation arrangements and payments have been assessed by a large, independent auditor.” — TSA Group Spokesperson
The spokesperson explained that related party transactions were costs for services provided by associated companies, simultaneously recorded as revenue by those companies. However, an analysis by Guardian Australia highlighted the group’s complex structure, making it difficult to verify overall tax payments or track related party transactions.
Implications for Government Outsourcing
The revelations about Telco Services come amid broader discussions on the reliance of Australian government agencies on outsourced call centres. Services Australia, which operates one of the country’s largest contact centre networks, supplements its workforce with contractors, including those from Telco Services and other operators like Concentrix.
Recent reports have detailed the growing dependency on external consultants and contract workers by government agencies. The Australian Taxation Office, for example, relies heavily on private operators such as Probe Operations, Serco, and Concentrix for handling calls. This reliance has drawn criticism from tax agents who report declining service quality and inexperienced call staff.
By the Numbers: “The majority of calls to the Australian Taxation Office’s phone line are answered by workers at three private operators.” — Guardian Australia
Looking Ahead: The Need for Transparency and Reform
The situation with Telco Services underscores the need for reform in how public contracts are awarded and monitored. Experts like Ward advocate for increased transparency and accountability to ensure fair tax contributions from companies benefiting from lucrative government contracts.
As the debate over outsourcing and corporate tax practices continues, stakeholders will be watching closely for any policy changes or regulatory actions that might arise. The case of Telco Services could serve as a catalyst for broader discussions on corporate governance and tax fairness in Australia.
In the meantime, the public and policymakers alike will be scrutinizing the practices of companies involved in government contracts, with a focus on ensuring that they contribute their fair share to the nation’s tax revenue.
