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AMA (NSW) has announced a state-wide campaign encouraging patients to help GPs fight a potentially devastating tax.
“Ahead of the next election, NSW residents will be delivering a message to the NSW Government that they cannot claim to support general practice while also taxing them out of existence,” said AMA (NSW) President, Dr Michael Bonning.
“Payroll tax threatens to close many practices and force others to change their billing practices to accommodate this cost. It is a greedy and poorly conceived cash grab that will exacerbate GP shortages and increase costs for patients.”
An AMA (NSW) survey of members found more than a third of respondents (36%) indicated they would be forced to close their practice if liable for payroll tax. The survey of almost 250 doctors also found 89% would have to increase consultation fees to patients and 83% would reduce bulk billing.
Dr Daniel Rankmore is a general practitioner and practice owner of Barton Lane Practice in Tamworth, which was awarded RACGP’S Practice of the Year in 2022.
He said general practitioners are not asking Government to change the rules for doctors, but to stick to the rules previously established.
“The tenancy and agency model has been the industry standard for decades. In this cash grab, state revenue is redefining the rules, claiming GPs are employees by pointing to shared after-hours rosters, team-based care, and common spaces, all of which ensure access to quality care. These are technical details not reflective of the intent of the legislation nor the structure of the business set up in good faith.”
Payroll tax is a state-based tax that applies to employers. Most GPs engage practices to support them, and the GPs do not work for the practice. As such, until recently, payroll tax did not apply to most general practices. However, recent court decisions and the Public Notice issued by the Queensland Government reveal a willingness to broaden the application of payroll tax to all general practices, with few exemptions.
Over the last 20 years, regulatory bodies, professional and accreditation bodies, and governments have all encouraged general practitioners to move away from models of solo general practice to models where a number of general practitioners practice from the same location.
Practitioners conducting their medical practice from a common location is seen as beneficial for patients and GPs. Practicing from the same location as others ensures there is professional support available to general practitioners, and patients benefit from the opportunity for colleagues to confer with one another. Patients also benefit by being able to readily access care from another GP at their regular practice if their regular GP is on leave or otherwise unavailable.
Dr Rankmore said the timing of this change in the application of payroll tax is particularly cruel.
“It is retrospective taxation. They are changing the interpretation and threatening to backdate it five years. It’s also a post pandemic slap in the face. General practice’s contribution to the pandemic was invaluable – supplying the majority of vaccinations, telehealth and anti-viral prescribing with little notice or financial reward.”
He added, “General practice already faces tremendous challenges in financial viability and workforce recruitment.
“Without doubt the broadening of payroll tax will lead to higher patient fees and fewer doctors working in general practice,” Dr Rankmore said.
The number of junior doctors entering general practice has decreased from 45% to 13%. Australia is heading for a GP workforce disaster. AMA research indicates there will be an undersupply of 10,600 FTE GPs by 2031-32.
According to Dr Bonning, “General practice needs a massive boost, not increased taxation.
AMA (NSW) is calling for a payroll tax exemption for general practices.
“A payroll tax exemption will give practices greater security and help salvage a primary care system that is under threat,” Dr Bonning said.
“State Governments have appealed to the Commonwealth to implement Medicare solutions that will strengthen general practice and reduce pressure on their hospitals. This is the State’s opportunity to step up to the plate and do its part to keep general practice affordable and accessible for patients,” Dr Bonning said.
Patients are urged to look for information about payroll tax next time they visit their GP and ask for a postcard to send to politicians.
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