Payroll tax decision is another nail in the coffin for general practice

AMA (NSW) warns that the latest Court of Appeals decision regarding Thomas and Naaz Pty Ltd case provides no reprieve for general practice from the uncertainty surrounding payroll tax liability.

According to AMA (NSW) President, Dr Michael Bonning, the Court of Appeals’ dismissal of the Thomas and Naaz Pty Ltd application for leave to appeal highlights the risks for general practice with the application of payroll tax.

“We expect this decision to pave the way for the issuing of the Revenue NSW Practice Note and an increase in audit activity,” he said, adding that this case along with other recent court decisions lay plain the State Government’s ability and desire to charge general practices payroll tax.

“Payroll tax will have devastating ramifications for general practices in NSW,” Dr Bonning said. “General practices across NSW will face payroll tax bills of thousands of dollars. Some practices will be forced to close their doors, while others will have to charge patients increased fees. The decision to levy payroll tax will turbocharge the decline of bulkbilling.

“The impact on patients will be significant. As practices close, access to healthcare will diminish – this will be even more difficult in rural and regional NSW where general practices are fewer and farther between.

“Other practices will be forced to stop bulk billing and increase fees for patients. Payroll tax is a patient tax.

“The NSW government is asking the Commonwealth government for more money for general practice but at the same time imposing a sneaky tax which will directly contribute to the decline of general practice,” Dr Bonning said.

AMA (NSW) has campaigned directly to patients on this issue, recently holding an event in the Treasurer’s own electorate. AMA (NSW) anticipates pressure from patients will escalate in the lead up to the State Election.

AMA (NSW) is calling on the next NSW Government to exempt general practices from payroll tax.

An exemption would bring general practices in line with other healthcare services, such as public hospitals, local health districts, and not-for-profit hospital providers. Exemptions also currently exist for religious institutions, charitable organisations, education providers and government.

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