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GPs left frustrated by payroll tax ‘savings’ claim
The RACGP continues to call for national consistency in scrapping the tax, as the NSW Government spruiks the ‘savings’ made by GPs who have claimed its rebates.
While some GPs in NSW grapple with the cost of payroll tax, some states have already removed the burden for practices.
As the New South Wales Government talks up the ‘savings’ made by GPs who have claimed its payroll tax rebates, the RACGP has renewed its calls for the tax to be scrapped nationwide.
According to a State Government announcement this week, GP clinics have claimed more than $74.1 million in ‘payroll tax-free wages’ and ‘saved $4 million’ in the first eight months of the Bulk Billing Support Initiative.
But RACGP NSW Chair Dr Rebekah Hoffman said the view that the payroll tax rebates have resulted in a saving is a stretch.
‘I find the narrative increasingly frustrating because it was a tax that previously wasn’t required to be paid and in different states there’s a complete exemption for GPs to pay it,’ she told newsGP.
It comes after independent practitioners were deemed employees for payroll tax purposes in some states, prompting the RACGP to warn of potentially devastating financial and healthcare impacts.
In response, several jurisdictions rolled out exemptions, amnesties, or scrapped the tax entirely.
In NSW, the State Government launched its current initiative, allowing medical centres making payments to contractor GPs to claim a rebate on payroll tax if they meet the relevant proportion of GP services under prescribed arrangements.
To claim the ongoing payroll rebate for contractor GPs, clinics must meet bulk-billing targets of 80% in metropolitan Sydney and 70% in other areas of NSW.
While RACGP NSW welcomed the Government’s efforts to ease the financial burden of payroll tax via the rebate, Dr Hoffman said it is time for a complete exemption.
‘A nationally consistent framework is the only framework that makes sense, and the logical place to start is for a full exemption for GPs,’ she said.
‘We know the out-of-pocket costs for accessing healthcare is increasing, and an ongoing state tax that increases the cost to see a GP is frustrating,’ she said.
‘We continue to have conversations at all levels of state, with the media and with our members.’
But NSW Health Minister Ryan Park said the rebate scheme is working as planned.
‘This initiative is delivering exactly what we set out to achieve – keeping GP clinics open, protecting bulk billing, and making sure people can see a doctor without facing extra out-of-pocket costs,’ he said.
‘When people can access a bulk-billing GP close to home, they’re less likely to end up in a hospital emergency department for issues that can be managed in primary care.’
NSW Health estimates a 1% drop in bulk billing equates to around 3000 additional emergency presentations, but figures are yet to show a consistent upward trend.
The bulk-billing rate in NSW for the December quarter (2024–25) was 81.9%, down from 82.2% in the previous quarter (September) but up from 81.3% when compared against the December 2023–24 quarter.
However, NSW Finance Minister Courtney Houssos expects more of the state’s 2300-plus GP clinics to come on board over time.
She did not say how many clinics are already involved in the initiative.
‘We are committed to pulling every lever we can to support bulk billing and access to affordable healthcare in NSW,’ Minister Houssos said.
‘We expect more clinics to register for the Bulk-Billing Support Initiative as we near the end of the financial year, ensuring even more patients have access to a bulk-billed GP appointment.’
Dr Hoffman said while some practices can more readily adapt their business to ease the payroll tax burden, it is disheartening for many of the smaller practices with limited options.
‘We’ve come part of the way, and for that cohort of GPs that have received a rebate, we are very happy for them – it means that they are potentially able to keep their doors open,’ she said.
‘But then there’s this middle group of GPs who don’t have that option and are having to increase their fees.
‘What payroll tax has done for most small general practices … is that they’ve probably moved away from bulk billing, and they’ve had to increase their private fees to be able to cover the costs of payroll tax.
‘So, the option for them to then reverse that and bulk bill when they’ve had to increase their fees because of taxes is really disheartening.’
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