ATO spends $162m in contact centre outsourcing

The Australian Taxation Office has spent around $162 million to outsource business processes like its call centre functions to three providers for the next three years.

The tax office this week published contracts with Datacom Connect, Probe Group, and Stellar Asia Pacific - all business process outsourcers - that will run from November 1 to February 29 2020.

Business process outsourcing sees a third-party supplier manage functions like call centre/ customer relations, accounting, payroll, and human resources.

The largest of the three new deals went to Datacom Connect, for a value of $76 million over the three-year period.

A further $49.6 million was given to Stellar Asia Pacific for the outsourced labour services, while Probe Group was awarded a $35.7 million contract.

The Datacom and Stellar contracts are renewals of existing deals: the ATO spent $111.7 million with Datacom Connect from May 2013 to October 31 this year, and $96.5 million with Stellar from August 2012 to August this year.

The Probe Group deal appears to have replaced a previous arrangement with Serco worth $246.6 million from August 2012 to October 31 this year.

The providers are sourced through the ATO's 'outsource labour for service delivery' panel.

In a pre-budget submission [pdf] earlier this year, the Community and Public Sector Union claimed ATO internal staffing levels had fallen by nearly a quarter - or 4000 roles - between 2013-14 and 2015-16.

The CPSU said its estimates showed around a fifth of the ATO's workforce was now made up of outsourced labour.

"There has been a notable increase in the use of labour hire by the ATO over the past three years," it wrote in its submission.

"Labour hire staff initially were used to provide call centre staff to respond to queries from the public during peak demand tax times between July to October (within the service delivery group).

"However, members report that labour hire staff are now engaging in compliance and debt work ... undertaking audits and other ‘core’ ATO functions."

The CPSU said Datacom contact centre staff alone occupied an entire office floor with around 500 staff.

It claimed the cuts had "significantly impacted the ability of the ATO to detect and deal with corporate and other tax avoidance".