Major companies earning hundreds of millions from government contracts are among dozens of corporates paying little or no tax, official records show.
Corporate taxation details released by the Australian Taxation Office indicate that big service providers including Serco Group, Adecco Holdings, Datacom Australia and Spotless Group paid no tax or as little as $11 million in 2017-18 despite earnings which in some cases reached close to $1 billion.
The records show that multinational services giant Serco incurred a tax bill of just $11.1 million in 2017-18 despite earning $968.1 million from a multiple government contracts across a wide range of areas including defence, immigration and citizen services.
Several major contractors are contributing even less to government revenue.
Recruiter Adecco, which holds supply contracts with multiple government departments including the Australian Taxation Office itself, earned more than $557 million in 2017-18 but paid no tax. Neither did IT firm Datacom Australia, despite income of $505 million.
The Community and Public Sector Union, which represents public servants, condemned the failure of major government contractors to pay taxation, and called on Prime Minister Scott Morrison to "act on multinational tax avoidance and ensure that companies that are considered for contracts pass tax standards".
According to the ATO's latest Corporate Tax Transparency report, about a third of big companies did not pay tax in 2017-18.
The report, which includes tax information on 2200 public and private entities, found their total income tax take reached $52.3 billion, up $6.6 billion from the previous year.
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The tax office said part of the increase was due to the implementation of the Multinational Anti-Avoidance Law, which was passed in 2016 to crackdown on multinationals such as tech giants Apple and Google, who were accused of using "artificial and contrived" arrangements to avoid reporting profits in Australia. The ATO said as a result $7 billion was booked to Australian subsidiaries of foreign-owned companies in 2017-18.
Tax office Deputy Commissioner Rebecca Saint said there were legitimate reasons for companies to pay little or no tax, including making a loss, claiming against losses from previous years or investing in start-ups.
But she said the incidence of this was declining, down from 36 per cent to 32 per cent of companies in the past three years.
"The positive trend we are now observing is that many companies have ceased generating accounting losses and are now offsetting profits by utilising losses from prior years. We expect many companies to exhaust these losses and begin paying income tax in the coming years," Ms Saint said.
She warned companies that consistently report sustained losses that their behaviour would "raise a red flag".
CPSU National Secretary Melissa Donnelly said the ATO report highlighted the risks in outsourcing government services.
Labour hire and outsourced services were worth nearly $1 billion in annual federal government spending, she said, and included firms who were not paying taxes.
"This has a real impact in terms of the services the community receives," Ms Donnelly said.
"When a client can't get their call to Centrelink answered, we should remember that a significant number of companies aren't paying a cent in tax in Australia."
She singled out Datacom and Adecco as some of the "biggest culprits".
Adecco won a $230 million contract to supply 1000 staff for Centrelink compliance activities in a government outsourcing push that coincided with the flawed robodebt program, while Datacom holds major contracts with the Department of Home Affairs, the Australian Signals Directorate and the Australian Criminal Intelligence Commission.
A Datacom spokeswoman said the company was still establishing itself in the Australian market and lower profit margins meant it paid less tax.
A Serco spokesman said the company was committed to working in accordance with the law and financial reporting requirements, and strongly refuted "any suggestion regarding reduced tax liabilities".