In the Australian Taxation Office\u2019s workplace in the Melbourne suburb of Dandenong, a team dedicated to debt collection sits in the eastern part of the floor.<\/p>\n
They use the same kitchen and bathrooms as nearby workers, but they are paid much less than those in the public service also collecting debts, and face inferior conditions.<\/p>\n
Former workers at the ATO\u2019s private debt collector, Recoveriescorp, say they are kept in the shadows, leading to poor working conditions for outsource workers and inconsistent decisions for taxpayers seeking help with their debts.<\/p>\n
\u201cWe were just like battery hens sitting at our desk making calls to collect debts,\u201d says one former worker, who requested anonymity due to employment confidentiality provisions.<\/p>\n
\u201cOccupational safety just went out the window; you\u2019d get pulled up for taking too long going to the toilet.\u201d<\/p>\n
A second former Recoveriescorp employee says resignation rates are extreme, which the person says is bad for taxpayers because they must constantly deal with inexperienced staff making life-changing decisions about debt repayments.<\/p>\n
\u201cThe tax office is well aware that this is happening because they would have the attrition numbers,\u201d the former worker says.<\/p>\n
\u201cThe ATO would also see the number of complaints rising. The public actually knows there\u2019s something wrong but at the end of the day it comes down to cost, which is not fair on us, or taxpayers.\u201d<\/p>\n
The ATO is one of the most prolific users of outsourced workers through its use of three major call centre operators \u2013 the private equity-backed Probe Operations, the Nasdaq-listed Concentrix Services and the British multinational Serco \u2013 as well as the private debt collector Recoveriescorp.<\/p>\n
Sign up for the Breaking News Australia email<\/a><\/p>\n It has awarded Recoveriescorp $42.8m worth of contracts since 2022, according to the government tender portal. Recoveriescorp has paid zero corporate tax<\/a> in recent years.<\/p>\n The close relationship includes \u201cinsource\u201d Recoveriescorp employees embedded into the ATO who are instructed to tell taxpayers they are from the tax office, and \u201coutsource\u201d employees working under the debt collector\u2019s name.<\/p>\n A Recoveriescorp spokesperson said the company was unable to comment due to contractual restrictions.<\/p>\n The ATO referred more than 355,000 taxpayers to Recoveriescorp between January 2024 and October 2025. The tax office declined to provide updated figures.<\/p>\n \u2018Higher level of stupidity\u2019<\/p>\n The expanded use of Recoveriescorp came amid a push by the ATO to recoup more than $50bn in what the agency describes as \u201coutstanding collectible debt\u201d, a figure that grew significantly during the pandemic.<\/p>\n A recent review by the Tax Ombudsman, the independent watchdog for the tax system, described the ATO\u2019s decision-making as \u201cinconsistent\u201d.<\/p>\n The report found the tax office issued \u201cvague guidance and poor communication\u201d, which led to \u201cconfusion and unfair outcomes\u201d for taxpayers seeking a reduction or refund of interest charges.<\/p>\n Taxpayer complaints have doubled over a 12-month period, according to the tax ombudsman, Ruth Owen, who says the majority of complaints are about debt collection.<\/p>\n \u201cMostly the complaints I get are from people who actually want to pay their debt back, but they can\u2019t meet the conditions that the ATO has set for them,\u201d Owen tells Guardian Australia.<\/p>\n \u201cThe other issue is compound interest. If you\u2019ve got a debt and the ATO is charging 10.65% compounding interest on that, even a small debt can get large very quickly.<\/p>\n \u201cI want the ATO to make sure they are taking every taxpayers\u2019 individual circumstances into account and showing a degree of empathy in recognising some people are struggling while still trying to pay their debts back.\u201d<\/p>\n Government agencies initially outsourced various operations to handle changing demand or access specialised skills, a practice the Community and Public Sector Union says was ramped up by Coalition governments.<\/p>\n But Labor\u2019s attempt to curb reliance on external consultants and outsourced workers has stalled<\/a> just two years after the government ordered skills to be brought back in-house.<\/p>\n