What will payroll tax mean for patients in regional NSW?

AMA (NSW) is warning that patients in regional NSW could be hardest hit by the impact of payroll tax on general practices.

“If general practices are slugged with payroll tax, some will be forced to close their doors. For patients in rural and regional NSW – where access to a general practitioner is already very limited – this would be disastrous,” said AMA (NSW) President, Dr Michael Bonning.

Ahead of the NSW State Election, AMA (NSW) has been pushing the major parties to commit to a payroll tax exemption for general practices.

“A payroll tax exemption would give general practices the surety they need about their financial future,” Dr Bonning said.

Many general practices have been anxiously following recent court challenges from general practices who were audited and found liable for huge tax bills. The NSW Court of Appeals’ decision to block an appeal attempt from practice owners, Thomas and Naaz, has created significant fear that more general practices will face payroll tax audits. The private centre operators face $795,000 in tax liabilities covering a five-year period.

AMA (NSW) Councillor, Dr Ai-Vee Chua is a general practitioner and practice owner of Dubbo Family Doctors. She said the reality is most practices operate on very slim margins and a payroll tax audit would have significant ramifications.

“The Medicare rebate has not kept pace with the cost of inflation. It’s gobsmacking that the Government has expected GPs to pick up the difference between the rebate and the costs of running a business for decades. This tax grab will likely be the proverbial straw that breaks the camel’s back. Especially for practices in regional NSW,” Dr Chua said.

The Western NSW Primary Health Network has previously reported that 60% of practices in that region reported being only ‘just financially sustainable’.

“Even if practices remain open, there is a high likelihood they will be forced to increase fees to patients,” Dr Chua said.

“This hurts the most vulnerable in society and is a last resort for many practices. But this tax really puts practices between a rock and a hard place,” Dr Chua said.

“People in regional NSW face worse health outcomes compared to other people in metropolitan areas. We just went through a rural health enquiry that detailed the heart-breaking experiences rural and regional patients have faced.

“The fact that the State Government continues to ignore the advice of people on the frontlines of delivering healthcare is disheartening and demoralising. Residents in regional NSW deserve better,” Dr Chua said.

Media contact: 0419 402 955