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As a fellow GP, practice owner in Queensland and your President, I was despondent when I heard about the Queensland Government’s decision to hit general practice with the payroll tax. The new ruling threatens the way we work and is yet another nail in the coffin for struggling practices in the state.
The current payroll tax application will lead to increased out-of-pocket expenses for patients and decreased bulk billing. This will push more patients into the public hospital system leading to overflowing emergency rooms, ambulance ramping and long waiting lists.
I thank Dr Bruce Willett for his hard work with the Queensland Revenue Office (QRO). We’ve had a win in advocating for a no-retrospective tax to be levied only from the 2022 financial year and as the QRO has advised, their role is only to interpret the law. It’s now up to the state premiers, who have called on the federal government to help GPs and Medicare, to look in their own backyard and ensure that general practice, similar to hospitals, is exempt from the payroll tax. We must not allow other states and territories to follow suit.
What are we doing?
- We’re seeking an exemption of the payroll tax for general practice in Queensland and across the country.
- We’re seeking clarification and expert legal and accounting advice.
- We’re being transparent with our members.
I’m committed to achieving a meaningful solution for our members and I will update you with our progress on this front.
What the new ruling means:
- The QRO now potentially deems tenant doctors, or GPs working under service agreements with practices, to be employees for payroll tax purposes.
- Practices may soon need to pay payroll tax for tenant doctors who provide general practice services on the premises once they meet certain criteria, such as practising more than 90 days per year or being on a weekend roster. It depends on the specific circumstances of each practice.
- This ruling may affect practices with two or more full-time equivalent tenant doctors.
- The tax will be paid on total billings generated by a practice from the current financial year 2021-22.
- Having practice rosters increases the likelihood that the payroll tax will be applicable. This change makes the provision of after-hours services more difficult.
- Bulk billing practices will not be able to pass on the increased costs, resulting in areas of socio-economic disadvantage being disproportionately affected as doctors leave those areas.
- The changes in the payroll tax discriminate against practices that prioritise team-based care and continuity of care, which have been proven to lead to better patient outcomes.
Many of us are working under service agreements and the conditions in this ruling make it difficult to maintain tenant doctor status. With additional taxes that can amount to tens of thousands of dollars, we’d have no choice but to pass on the costs to our patients to maintain our practices. This will only further accelerate the decline in bulk billing and higher out-of-pocket fees for our patients.
After a decade of Medicare rebates being frozen, the recent Queensland ruling is a further blow to the state of general practice. It’s another setback for marginal practices, especially in rural and regional areas.
With the prospect of higher out-of-pocket fees on the horizon, I encourage you to get in touch with your local member of parliament and explain the impact this will have on you, your practice, and the profession. You may also feel the need to explain to your patients that fees may soon increase, and that bulk billing will decrease substantially due to the new ruling.
General practice is the first point of healthcare for most Australians. Nine out of 10 Australians see their GP every year. We must ensure that it’s sustainable so that our communities can continue to access high-quality care.
We need reform now. We need to get it right, and we’re doing all we can on your behalf to make this happen.
Regards,
Dr Nicole Higgins
RACGP President
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