Telco Services Australia Reports No Corporate Taxable Income Despite Multi-Million Dollar Government Contract

Telco Services Australia, an operator for Centrelink call centres, reported no corporate taxable income for several years, including periods when it held a substantial government agency contract. The Perth-headquartered company generated over $185 million in revenue in 2024-25 and $130 million the year prior, yet reported no taxable income in these periods.## Contract DetailsThis two-year period coincides with the company's multi-year contract, valued at over $90 million, to manage call centre operations for Services Australia, the agency overseeing social security.## Financial Structure and Analyst CommentsFinancial documents, filed on December 24, show $166.5 million in related party transactions last financial year for Telco Services. Jason Ward, a principal analyst at the Centre for International Corporate Tax Accountability and Research, stated that these payments appeared to "virtually eliminate profits" for the company, resulting in no tax payable. Ward suggested the business's structure might have allowed it to avoid reporting and tax obligations in Australia, advocating for increased transparency for companies bidding on public contracts. The documents also indicated that payments for directors and key management personnel increased during the 12-month period, even as the company reported a financial loss. There is no assertion that the company or its directors engaged in illegal activities.## Company's StatementA spokesperson for TSA Group, the parent entity of Telco Services Australia, stated that while Telco Services itself did not record taxable income, "other associated entities did and the appropriate amount of tax has been paid by them." The spokesperson added that a large, independent auditor had assessed the taxation arrangements and payments. They noted that the entities which paid the tax were not subject to public reporting requirements and that Telco Services had paid tax in previous years. TSA described the related party transactions as costs for services provided by associated companies, which are simultaneously recorded as revenue by those associated companies.## Broader ContextTelco Services Australia is an operational arm of the Perth-based TSA Group, which employs over 4,300 workers across five contact centres in Australia and the Philippines. The group also manages outsource operations for major corporations such as Telstra and NRMA insurance. An analysis of TSA Group's structure revealed that its various businesses infrequently lodge public financial accounts, making it challenging to publicly verify the group's total tax payments or the flow of related party transactions among entities. Another operational arm, Telco Sales, which holds a contract with Telstra, paid approximately $700,000 in corporate tax in 2022-23 and received a partial refund the following year, having generated over $120 million in revenue during those two tax years. The staff handling the Services Australia contract for Telco Services are employed by a separate entity called Trimatic Management Services, which received $5 million in grant funding from the Western Australian government in 2024 to expand call centre jobs. Services Australia uses a mixed workforce of permanent public service staff and contractors, including other outsource operators like Concentrix. Government agencies' increasing reliance on outsourced call centres has been noted, with attempts to reduce this reliance having stalled. The majority of calls to the Australian Taxation Office's phone lines are answered by staff from private operators, including Probe Operations, Serco, and Concentrix.