ATO Outsourcing to Private Call Centres Raises Concerns Over Taxpayer Vulnerability adn Cost
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A growing reliance on private call centres by the Australian Taxation Office (ATO) is sparking alarm, as thes outsourced operations pay workers significantly less than public servants and utilize call targets that may disadvantage vulnerable taxpayers. Contracts totaling $316.5 million have been awarded to US-based Probe Operations, Concentrix, and Serco, raising questions about service quality, worker exploitation, and the treatment of vulnerable individuals.
Shadow Workforce and Rising Costs
The Community and Public Sector union (CPSU) estimates that approximately 2,000 workers are currently employed at these for-profit call centres handling ATO work. According to CPSU deputy national president Beth Vincent-Pietsch, these contracts are not only more expensive for taxpayers but also lack the clarity and accountability of direct public sector employment.
“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 further emphasized that contract staff are frequently enough “set up to fail” due to inadequate training and support compared to their public sector counterparts, despite the ATO organizing the training guides which are then delivered by the private contractors.
Pay Disparities and Incentive Structures
Workers at one of the private operators reportedly earn $26.70 per hour, equating to an annual salary of around $52,800, based on the contract call center award for a level 2 clerical office worker. This rate is significantly lower than the $72,900 to $78,700 earned by directly employed ATO call centre staff, classified as APS 3. The difference represents a gap of more than $20,000 annually.
Incentive structures tied to call handling targets further exacerbate concerns. A source with knowledge of the operations revealed that workers can increase their pay by meeting these targets, creating a potential incentive to shorten calls and potentially compromise the quality of assistance provided to taxpayers. All of the private contractors reportedly rely on the contract call centre award to determine pay rates.
Debt Collection Practices Under scrutiny
The ATO’s outsourcing extends to debt collection, with $42.8 million in contracts awarded to Recoveriescorp, a private equity-owned debt collector. Since 2022, over 355,000 taxpayers, including welfare recipients, have been referred to Recoveriescorp, prompting complaints about aggressive collection tactics.
While the government prohibited Centrelink from using external debt collectors following the robodebt scandal, the ATO retains the authority to pursue welfare recipients for alleged tax debts. Dr. Vivien chen, a senior lecturer at the Monash Business School, highlighted the detrimental impact of this practise, particularly on vulnerable individuals.
“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.”
Government Directive Unheeded
The ATO’s increased reliance on private contractors began under previous Coalition governments. Despite a 2023 directive from the current Labor government urging agencies to curtail outsourcing of core functions, the large contracts with Probe, concentrix, and Serco took effect in 2024 and are set to run until mid-2026.
An ATO spokesperson stated that the agency supplements its workforce with external providers to enhance capacity, delivering services such as telephony, processing, and debt collection. The spokesperson added that all staff, including those at outsourced call centres, are expected to provide appropriate support to taxpayers experiencing vulnerable circumstances. However, the ATO declined to provide specific details regarding staffing levels, bonuses, or incentives used by the private contractors.
The growing trend of outsourcing raises basic questions about the ATO’s commitment to equitable and effective taxpayer service,and whether cost-cutting measures are coming at the expense of vulnerable Australians.
