Here’s a jaw-dropping revelation: a call center operator that bagged a massive government contract worth tens of millions of dollars managed to pay zero corporate tax for two consecutive years. But here’s where it gets controversial—despite raking in over $185 million in revenue during 2024-25, Telco Services Australia reported no taxable income, according to newly surfaced financial documents. The year prior? A similar story, with $130 million in revenue and still no tax paid. This all unfolded while the company was under a multi-year, $90 million-plus contract with Services Australia, the agency overseeing social security.
And this is the part most people miss: the company’s financial structure appears deliberately designed to minimize tax obligations, according to Jason Ward, a principal analyst at the Centre for International Corporate Tax Accountability and Research. Ward suggests the federal government should demand greater transparency from companies bidding for public contracts. So, how did they do it? The documents, filed on Christmas Eve, reveal $166.5 million in related party transactions last year, effectively wiping out profits and, consequently, taxable income. Meanwhile, payments to directors and key management personnel increased, even as the company reported a financial loss.
Now, there’s no evidence of illegal activity, but the situation raises eyebrows. Telco Services is part of the Perth-based TSA Group, which employs over 4,300 workers across five contact centers in Australia and the Philippines. Beyond its government contract, the group handles outsourcing for corporate giants like Telstra and NRMA Insurance. A TSA spokesperson defended the arrangement, claiming that while Telco Services itself didn’t pay tax, other associated entities did, and an independent auditor has vetted their tax payments. However, these entities aren’t required to disclose their financials publicly, adding another layer of opacity.
Here’s the kicker: an analysis by Guardian Australia found that TSA Group’s various businesses rarely file public financial accounts—unusual for a company of its size. This complexity makes it nearly impossible to verify how much tax the group has paid overall or how funds flow between its entities. For instance, another TSA arm, Telco Sales, paid just over $700,000 in corporate tax in 2022-23 but received a partial refund the next year, despite generating over $120 million in revenue across those two years.
Adding to the intrigue, while Telco Services holds the Services Australia contract, its staff are technically employed by a separate entity, Trimatic Management Services. Trimatic received a $5 million grant from the Western Australian government in 2024 to expand call center jobs. Services Australia, for its part, insists its workforce is primarily permanent public servants, supplemented by contractors.
This isn’t an isolated case. Government agencies increasingly rely on outsourced call centers, and attempts to reduce this dependency have stalled. For example, the majority of calls to the Australian Taxation Office’s phone line are handled by private operators like Probe Operations, Serco, and Concentrix. Tax agents have complained to the ombudsman about declining service quality, citing inexperienced staff who struggle to provide accurate information.
So, what do you think? Is this a clever use of legal loopholes, or does it highlight a deeper issue with corporate tax accountability? Let us know in the comments below. And if you’ve got more insights or information, drop an email to jonathan.barrett@theguardian.com.
