GPs’ payroll tax plight hits Prime Minister’s inbox

Landmark changes to bulk billing may be welcome, but they will be useless if clinics continue to be ‘killed off’ by soaring tax bills, RACGP President Dr Nicole Higgins has said.
 
On Wednesday, the Federal Government rolled out its flagship Medicare changes, including the long-awaited tripling of the bulk-billing incentive – a reform long called for by the college.
 
The sweeping changes mean healthcare will become more affordable for children under the age of 16 and those with concession cards, at a time when bulk-billing rates are plummeting.
 
But as medical centres in many parts of Australia teeter on the brink of payroll tax-induced closure, the RACGP has warned the reforms will not help if there are no clinics left to roll them out.
 
Dr Higgins made the point in a new letter addressed directly to Prime Minister Anthony Albanese, calling for the tax to be scrapped, and for greater consistency between different states and tiers of government.
 
‘While your government has taken steps to support general practice sustainability via Budget initiatives like tripling the bulk-billing incentive, disappointingly state governments are making things harder,’ she wrote.
 
‘Lack of harmonisation is causing confusion and financial distress for many general practices … it is also threatening the ability of practices to make billing decisions in line with the Government’s objective to increase bulk-billing rates.
 
‘By aligning policies, we can not only simplify the taxation process but also ensure that independent practitioners, general practices, and service entities are treated fairly and equitably across the country.’
 
Government heavyweights were out in full force on Wednesday touting the reforms, which were first revealed in May’s Federal Budget.
 
Launching the new incentives at the Our Medical Gregory Hills clinic in Sydney, Prime Minister Albanese labelled the reform as ‘the biggest investment in Medicare bulk billing in 40 years’.
 
‘We understand that Medicare is at the centre of our health system, that the primary healthcare that GPs deliver makes an enormous difference to people,’ he said.
 
But Dr Higgins warned the reforms will be ‘completely undermined’ if action is not taken against payroll tax.
 
‘We have a Federal Government wanting to put money into general practice and we’ve got state governments who are killing off any reforms, and general practice is caught in the middle,’ she told newsGP.
 
‘There’s a state and federal divide when we’re trying to create a cohesive healthcare system, and it’s actively working against us.
 
‘Payroll tax kills off bulk billing, it’s that simple, because you can’t bulk bill and pass on a fee, and that especially impacts our most vulnerable patients.’
 
Previous newsGP polls revealed just 3% of practices would be able to absorb the costs of extra payroll tax, and more than half of respondents said they would have to increase out-of-pocket fees for patients by more than $20.
 
Payroll tax continues to create significant concern and frustration among GPs, with one Melbourne owner facing a retrospective bill of up to $5 million.
 
Most states and territories have now offered concessions or amnesty periods for practice owners to prepare for the change, although Victoria continues to lag behind.
 
The RACGP is now calling for each Premier to commit to scrapping the retrospective collection of payroll tax, a three-year assisted compliance period to assess the impact on operating models, and a consistent position from State Revenue offices.
 
Dr Higgins also wants the issue to be added to the next National Cabinet agenda so it can be discussed on a nationwide level, with the aim of consistency between the leaders.
 
‘You’ve got state governments who have empty coffers and they’re trying to replenish,’ she said.
 
‘But it’s a false economy if they think that they can use general practice to do that.’
 
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