National

Public service union furious over Tax Office's Manila outsourcing proposal

The main public sector union is demanding urgent talks with the Australian Taxation Office over a proposal to move outsourced backroom functions to Asia.

The CPSU says it is "deeply concerned" after revelations that a giant multinational contractor wants to take ATO work to the Philippines and that Health Department work has been going to India for years.

The Canberra Times revealed on Wednesday that contracting behemoth Accenture wants to undertake "data-testing" for the ATO in Manila with the Taxation Office insisting that no actual data would go offshore under the proposal.

Tax says it has not given Accenture an answer yet but senior official have travelled to the Philippines capital to inspect the transnational's offices there and the union says that Australians would be "horrified" at the prospect of sensitive tax data going offshore.

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CPSU Deputy President Alistair Waters said the idea of using a company with a headquarters in Dublin to take advantage of the Irish Republic's the low corporate tax regime "smacked of hypocrisy" and that tax staff were shocked to read of the proposal.

 "We are seeking an urgent meeting with ATO management to demand some answers," the union official said.

"This news has not gone down well with Tax staff, who are already reeling from loss of 3000 jobs and the closure of 11 regional offices.

"Most Australians would be horrified if the government allowed their highly sensitive tax information to be offshored.

"The Abbott government is already looking to outsource Medicare and PBS payments.

 "Who is to say that in a couple of years whole swaths of government services are conducted from call centres in Asia? In this day and age, outsourcing means offshoring."

Accenture is one of the federal bureaucracy's favoured contractors with contracts worth $380 million across a number of departments, but its registration in Ireland minimisesits exposure to Australian taxes.

Treasurer Joe Hockey has ordered the ATO to crack down on multinationals who shift their profits offshore in a bid to avoid paying taxes here and Mr Waters accused the government of hypocrisy over the proposal.

 "Only last week Joe Hockey said he was cracking down on companies that weren't paying their fair share of tax and yet Accenture, which is reportedly getting $380 million a year from Commonwealth contracts, is based in Ireland, which means the company is getting away with paying as little tax as it can in Australia."

"Under this government we are seeing an emerging and worrying trend of seeing jobs going offshore.

"This work could be done by Australians. It would be good to see this Government back jobs rather than preside over yet more job losses."

Mr Hockey's office declined to comment on Thursday.

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