Call centre operator that won major Centrelink contract paid no corporate tax for two years | Business

Centrelink’s outsourced call center operator paid no corporation tax for several years, even after winning a major government contract worth tens of millions of dollars, Guardian Australia has revealed.

New financial documents show Perth-based company Telco Services Australia generated more than $185 million in revenue in 2024-25 but reported no taxable income.

The previous year, it had reported $130 million in income and also paid zero taxes.

The two-year reporting period coincides with the company’s $90 million-plus multi-year contract to run call center operations for Services Australia, the body responsible for social security.

Jason Ward, principal analyst at the International Center for Corporate Tax Liability and Research, said the business appeared to be structured to “avoid reporting and tax obligations in Australia”.

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He said the federal government should subject bidders for public contracts to a higher level of transparency.

Financial documents filed on Christmas Eve show related party transactions at Telco Services last fiscal year were $166.5 million. There are no details regarding the identity of the related parties.

According to Ward, these payments “virtually eliminate the profits” of the company, resulting in no tax being paid.

At the same time, payments to executives and senior management staff increased over the 12-month period even after financial losses were reported, the documents show.

There is no allegation that the company or its directors acted illegally.

Telco Services is one of the operational arms of a Perth-based organization known as TSA Group, originating from Perth. The group says it has a team of more than 4,300 employees operating across five contact centers in Australia and the Philippines.

As well as government agency contracting, the group runs outsourcing operations for major companies and brands, including Telstra and NRMA insurance.

A TSA group spokesman said the Telco Services company did not record taxable income, but “other associated entities did and the appropriate amount of tax was paid by them.”

“Tax arrangements and payments were assessed by a major, independent auditor,” the spokesman said.

The spokesperson said entities paying the tax are not required to meet public reporting requirements and that Telco Services had paid the tax in previous years.

TSA defined related party transactions as costs incurred for services provided by related companies and “concurrently recorded as revenue by related companies.”

A Guardian Australia analysis of the structure of the TSA group found that several businesses rarely opened public financial accounts; This is unusual for such a large operator with thousands of employees and large revenue streams.

The complex structure made it impossible to publicly verify how much tax it paid in total or how related-party transactions flowed between different entities.

Another of its operational arms, Telco Sales, has a flagship contract with Telstra. This company paid just over $700,000 in corporate taxes in 2022-23 but received a partial refund the following year. It generated more than $120 million in revenue over two tax years.

While the Telco Services arm of the TSA group has the Services Australia outsourcing contract, staff are employed by a different organization called Trimatic Management Services.

trimatic Received $5 million grant funding from the Western Australian government in 2024 to expand call center business in the state.

A spokesperson for Services Australia said the agency is home to one of the largest contact center networks in the country and its workforce is “mainly based around permanent Australian public service staff” supported by contractors.

Centrelink also uses a separate outsourcing operator, Concentrix, to run some call center operations.

Guardian Australia has detailed in recent months how reliant government agencies are now on outsourcing call centres, and how attempts to reduce reliance on external consultants and contract workers have stalled.

Most calls to the Australian Taxation Office’s hotline are answered by employees of three private operators: US private equity-owned Probe Operations, British multinational Serco and Concentrix.

Tax agents have complained to the ombudsman about deteriorating service on ATO phone lines, saying they are often speaking to inexperienced call staff who are unable to provide informed answers.