Imagine this: A company raking in hundreds of millions of dollars in revenue, yet somehow managing to pay zero corporate tax. Intrigued? Let's dive into a story that raises serious questions about corporate tax avoidance and government contracts in Australia.
An outsource call center operator, Telco Services Australia, which handles calls for Centrelink, found itself under scrutiny. Despite securing a lucrative multi-year contract with Services Australia, the agency responsible for social security, the company astonishingly paid no corporate tax for two consecutive years. Financial documents reveal that the Perth-based company generated over $185 million in revenue during the 2024-25 financial year, but reported no taxable income. The year prior, the company reported $130 million in income, again with no tax paid.
This two-year period coincides with the company's $90 million-plus contract with Services Australia. Jason Ward, a principal analyst at the Centre for International Corporate Tax Accountability and Research, suggests the company's structure may have been designed to avoid tax obligations in Australia. He argues that the federal government should demand greater transparency from companies bidding for public contracts.
But here's where it gets controversial... The financial documents, released on Christmas Eve, also show significant related party transactions, totaling $166.5 million in the last financial year. The details of these related parties remain undisclosed. According to Ward, these payments effectively eliminate the company's profits, leading to zero tax payable. Simultaneously, payments to directors and key management personnel increased, even amid reported financial losses.
It is important to note, there is no suggestion of illegal activity by the company or its directors.
Telco Services is part of the TSA Group, a Perth-based entity. The group claims to employ over 4,300 workers across five contact centers in Australia and the Philippines. Besides its government contract, the group also provides outsource services to major corporations like Telstra and NRMA insurance.
A TSA group spokesperson stated that while Telco Services itself recorded no taxable income, other associated entities did, and they paid the appropriate amount of tax. The spokesperson added that these entities are not required to publicly report their finances, and Telco Services had paid tax in previous years. TSA describes the related party transactions as costs for services provided by associated companies, which are then recognized as revenue by those companies.
And this is the part most people miss... An analysis by Guardian Australia found that the TSA group's various businesses rarely file public financial accounts, which is unusual for a large operator with thousands of employees and significant revenue. This complex structure makes it nearly impossible to publicly verify the total tax paid or how related party transactions flow between different entities.
Another TSA Group entity, Telco Sales, holds a major contract with Telstra. This company paid just over $700,000 in corporate tax in 2022-23 but received a partial refund the following year, despite generating over $120 million in revenue across the two tax years.
Interestingly, while Telco Services holds the Services Australia contract, the actual staff are employed by Trimatic Management Services. Trimatic received $5 million in grant funding from the Western Australian government in 2024 to expand call center jobs. Services Australia emphasizes that its workforce is primarily made up of permanent Australian public service staff, supplemented by contractors.
Centrelink also utilizes another outsource operator, Concentrix, for some of its call center operations. Recent reports highlight the growing reliance of government agencies on outsource call centers, despite attempts to reduce the use of external consultants and contract workers. The majority of calls to the Australian Taxation Office are answered by workers at three private operators: Probe Operations, Serco, and Concentrix.
What are your thoughts on this situation? Do you believe the government should demand more transparency from companies that win public contracts? Share your opinions in the comments below. Do you think this is a tax avoidance scheme?
