National

Australian Tax Office calls in the... debt collectors

The Australian Tax Office has come under fire for putting out an expression of interest to privateers wanting to advise the ATO how to collect debts. 

It has prompted Australian Services Union official Jeff Lapidos to quip "you'd think after 100 years the Tax Office would know how to collect money it was owed".

Between July 2013 and last Friday the ATO had reduced its workforce by 3234 staff as it continues the biggest staff cuts of any Commonwealth employer.

The union, which has been lobbying against job losses, was concerned the agency's use of outsourced companies would increase leaving Australian taxpayers exposed to companies which did not need to adhere to the Australian Public Service code of conduct.  

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The ATO has been using consultants to collect some debts since 2006.

The expression of interest put out a fortnight ago asked for interest from those willing to collect debts and advise about alternative collection strategies, strategies aimed at preventing future debt and the "delivery of services at the national level".

"It seems to me these private companies would say, 'you know what, we can fix this problem for you'," Mr Lapidos said. 

The union was concerned that at the moment private debt collection companies were taking on the easier cases, meaning their success ratio would be higher.

Mr Lapidos also said private companies would not be covered by the APS code of conduct. 

"Not like private debt collectors who can ring people up in the middle of the night and attempt to pressure them," he said. 

But an ATO spokesperson, who confirmed the agency was refreshing some of its debt collection contracts, said the Tax Office had a comprehensive governance framework in place to ensure private companies met the same security, integrity and quality requirements applying to internal debt collection. 

"The agencies are required to meet all Commonwealth privacy and security requirements," the spokesperson said.

"They are open to scrutiny from the ATO's internal audit area, the Australian National Audit Office and the Commonwealth Ombudsman.

"Payments to agencies are on a flat fee-for-service per case basis, regardless of the amount or type of the debt referred or the amount recovered."

The cost of collection was reported in the ATO's annual report but was not broken down between the Tax Office and external agencies.

The cost to collect net $100, including GST collections, was 90 cents, down from 91 cents in 2012–13.