The Australian Taxation Office has been quietly sending some of its work to the Philippines for several months as the Australian Public Service moves closer to operating in Asia on a large scale.
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The office insists the offshore "application development" by outsourcing giant Accenture is done in a secure facility and that no data on taxpayers is being sent to Manila.
But the main public service union says the ATO is taking unacceptable risks by moving any of its work overseas.
The news of the Philippines deal comes as the Commonwealth is openly canvassing the idea of following the lead of the NSW government and sending some of its work to India.
Accenture first came to to ATO in 2014, asking if it could take some of its work for the giant revenue agency to one of the private players' vast "service centres" in the Philippines.
The idea was considered and rejected at the time, according to an ATO spokeswoman, but not before senior public servants were dispatched to Manila for a tour of inspection.
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The spokeswoman told Fairfax that the present arrangement, where Accenture is helping to develop new IT capabilities for the office, was temporary and had been in place for several months.
"Earlier this financial year the ATO commenced a short-term arrangement with Accenture to use their Philippines Delivery Centre to increase our IT capability in application development for new policy implementation," she said.
"This additional capability is being used at peak times to temporarily support the ATO's workforce and existing onshore arrangement with Accenture.
"The offshore development is being conducted in a secure facility that has been inspected by ATO staff and conforms to government physical and data security requirements.
"There is no taxpayer data going offshore and only anonymised development data being is being used via secure channels.
"The arrangement is expected to continue to December 2016."
Accenture and the ATO have history, with the company reaping fees of $677 million for its work on the office's trouble-plagued "change program", which blew out in cost from an initial "fixed price" of $230 million in 2004 to $756 million when it concluded in 2010.
Community and Public Sector Union national president Alistair Waters says he is not convinced by the ATO's assurances about data and security.
"It will be very concerning to the Australian community that the ATO and the Turnbull government took this decision without letting Australians know it was even happening," Mr Waters said.
"The reality is that the ATO is now transmitting data overseas and this increases the risks of individual Australian's privacy being breached.
"Offshoring ATO IT development appears completely at odds with what the Prime Minister has said about supporting and developing Australian innovation.
"If this government had not cut the jobs of around one in five tax workers, this so called 'support' in the form of sending tax work overseas may well not be necessary," Mr Waters said.
