Health Minister ‘very worried’ about payroll tax impacts

Federal Health and Aged Care Minister Mark Butler has added his voice to growing calls for state governments to reverse their payroll tax grabs, warning its implementation is at odds with recent health investments.
 
The Minister’s pleas come after the RACGP and doctors across the country have warned widespread practice closures could be on the way if states do not rule out the potentially crippling tax.
 
Already, practice owners have reported receiving bills of more than five million dollars as state governments continue their crackdown on the new tax.
 
In a new show of unity with GPs, Minister Butler said state and territory governments need to listen to doctors, the college, and the widespread calls for change.
 
‘Payroll tax is a matter for the states, but I am very worried that our historic investments we’ve put into Medicare, in response to calls from state governments, will be lost to increased payroll tax obligations by general practices,’ he told the ABC.
 
‘I’ve strongly urged state treasurers, premiers, and health ministers to listen closely to general practice organisations like the [RACGP] in their states about ways in which they can work through this.’
 
RACGP President Dr Nicole Higgins welcomed this sign of support from Australia’s top health decisionmaker.
 
‘It is time that the Health Minister started reigning in the state premiers who are undermining his efforts to support general practice,’ she told newsGP.
 
‘Minister Butler is now coming out strongly in support of GPs, the payroll tax issue, and the impact that this is having on our patients.
 
‘We can’t have a Federal Government supporting general practice and patients at the same time as we have our state treasurer’s and health ministers use Medicare money to prop up their own coffers.’
 
It comes after the tripling of the bulk billing incentive was rolled out last year, in addition to further investments into Medicare and general practice, in a bid to make a trip to the doctor more affordable, particularly for vulnerable Australians.
 
One month after the incentive went live in November, a 2.1% increase in bulk billing rates was recorded nationally.
 
But according to the latest data, just 83% of provider fees were paid by Medicare in February, compared to 85% when the incentive was introduced.
 
Recent HotDoc data also revealed 95% of responding Victorian clinics plan to increase patient fees by an average of $12 per appointment in response to any tax changes.
 
Several states have introduced payroll tax amnesties for practices to help prepare for the change, but GPs say a lack of long-term certainty remains.
 
The most pressing need for change comes in South Australia where its amnesty ends on 30 June this year, while in Victoria, GPs can only request ex gratia relief with no amnesty period on offer.
 
But Dr Higgins said the debate over payroll tax reform has been going for too long, and now is the time for state political leaders to act.
 
‘The healthcare system is being undermined by state greed when they need to be looking at the big picture, because having the added payroll tax on Medicare will lead to increased ramping and overflowing emergency departments, which will impact their own hospitals – it’s an own goal,’ she said.
 
‘GPs are starting to have conversations with patients around what payroll tax will mean and the impact that will have on increasing the gap and reducing bulk billing.
 
‘At a time when we’re starting to see green shoots in general practice, payroll tax will just cause them to wither and die.’
 
Last year, the RACGP launched a petition calling for the tax to be scrapped, which has so far gained more than 11,500 signatures from doctors and patients alike.
 
Additionally, conversations are continuing with the Victorian Government to sure up support for the state’s medical centres.
 
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