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NSW issues payroll tax exemption tied to bulk billing
Contractor GPs at practices that reach certain bulk-billing thresholds will receive payroll tax rebates, while retrospective bills are also off the table.
NSW Treasurer Daniel Mookhey and Premier Chris Minns ahead of the 2024–25 state budget. (Image: AAP)
The NSW Government has announced a payroll tax rebate for contractor GPs and a waiver for past unpaid payroll tax liability in an estimated $189 million spend targeted at bulk billing.
The Government confirmed the move as part of its 2024–25 state budget in an effort to ‘ensure the cost of seeing a GP remains accessible’, after estimating that a 1% decrease in bulk billing equates to approximately 3000 extra emergency presentations.
RACGP NSW&ACT Chair Dr Rebekah Hoffman was directly involved in negotiations and applauded the State Government for its commitment.
‘This gives GPs across NSW certainty that they can continue to operate and keep their doors open for patients, without fear of being hit with a huge tax bill that will shut them down,’ she said.
Payroll tax, and its potentially devastating impact on general practice, has been a hotly debated topic since a high-profile ruling left practice owners vulnerable to significant tax liabilities under previous legislation.
A survey by the medical appointment booking platform HotDoc, which went out to 310 clinic owners and managers nationally, found that around one in six (16.5%) reported concern about closures, including the viability of their own clinic. More than nine in 10 respondents to a 2023 newsGP poll also said they would be forced to raise their fees if they were hit with the tax.
RACGP President Dr Nicole Higgins thanked Dr Hoffman, as well as AMA NSW President Dr Michael Bonning, for helping to negotiate the deal.
‘The NSW payroll tax outcome ensures the viability of general practice with no retrospective application of payroll tax,’ she told newsGP.
‘For those practices who were facing closure, this will be welcome news.’
Dr Bonning, who is also a member of the RACGP Expert Committee – Funding and Health System Reform, said NSW could be the first state to legislate a guarantee of no retrospective payroll tax liability for general practice.
‘Unfortunately, general practice continues to struggle with decades of underfunding,’ he said.
‘Legislating “no retrospectivity” will provide certainty for practices and will minimise the risk of more closures of general practices in NSW.’
Once the legislation is passed there will be an ongoing payroll tax rebate for contractor GPs in practices with bulk-billing rates above 80% in metropolitan Sydney, and above 70% in the rest of the state.
Dr Hoffman thanked Health Minister Ryan Park and Finance Minister Courtney Houssos for negotiating with the RACGP ‘in good faith’ and ‘understanding the devastating impact’ the tax would have had on GPs.
‘We appreciate the very tight budgetary constraints the NSW Government is under and know this decision was not taken lightly,’ she said.
‘The tax arrangements going forward will reduce future liabilities and will go a long way to ensuring NSW practices remain viable and open for patients, and those that are bulk billing may continue.’
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