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NSW pauses GP payroll tax audits for 12 months


Michelle Wisbey


24/08/2023 3:35:05 PM

The State Government will use the year-long freeze to consult on a long-term solution, a first step in preventing widespread practice shutdowns.

Stethoscope sitting on pile of bills.
At least six practices in News South Wales have already received retrospective payroll tax notices, including one for a staggering $450,000.

The RACGP has welcomed a New South Wales announcement to pause payroll tax audits for one year, labelling it a ‘step forward’ in saving general practice.
 
On Thursday, the NSW Government revealed the year-long amnesty would allow for further consultation with the college and the AMA to find solutions for the future.
 
A 12-month pause will also be applied to tax penalties and interest accrued on outstanding payroll tax debts incurred before and at the commencement of the 12-month period.
 
The move was announced alongside a new Special Commission of Inquiry into healthcare funding, which will examine the way the state’s health funds and services are delivered.
 
Earlier this month, the RACGP urged NSW Premier Chris Minns to introduce the amnesty for the tax grab, which is already causing widespread chaos.
 
At least six practices in the state have received retrospective payroll tax notices, including one for $450,000.
 
RACGP President Dr Nicole Higgins told newsGP the temporary reprieve is a crucial step forward in protecting the future of medical centres.
 
‘The goal has always been to ensure that general practices can keep their doors open and have certainty. What is needed in the long-term is no retrospective application, and an amnesty is welcomed to give us the time,’ she said.
 
‘This allows us time to negotiate payroll tax with the NSW Government, and this is breathing space for us to ensure we have the time to advocate strongly for practices.
 
‘General practice operates on very thin margins and payroll tax would have been the nail in the coffin for many of those practices.’
 
Earlier this month the Victoria and NSW governments confirmed the tax changes, in which practices earning a revenue over a certain threshold could have payroll tax liabilities for tenant GPs operating out of the clinic.
 
South Australia and Queensland have also committed to introducing the changes but have both announced amnesty periods.
 
NSW Finance Minister Courtney Houssos admitted the tax has created ‘great uncertainty in the GP community’ and could lead to increases in presentations to emergency departments already under significant strain.
 
‘That is why we will need time to satisfactorily resolve the matter,’ she said.
 
‘This will take time, but we are committed to doing this carefully and thoughtfully to achieve the best result we can.’
 
Last week, the college, alongside the AMA, wrote to Victoria Premier Daniel Andrews pleading for ‘urgent intervention’ on its tax rollout; however, no amnesty has been announced for the state.
 
A previous newsGP poll found just 3% of general practices could absorb the costs associated with the changes in payroll tax, and 78% would need to increase patient fees
 
One Victorian practice manager, who received an $800,000 tax bill, has already warned the changes would wipe out more than half of all medical centres.
 
‘What we now need is GPs in Victoria to be talking with their local state MPs about the impact of payroll tax on their practices,’ Dr Higgins said.
 
‘They need to tell Daniel Andrews general practice in Victoria will suffer because of the measures that are proposed, it will kill off bulk billing and increase the gap that patients have to pay when they see their GP.’
 
Dr Higgins said a nationwide approach to payroll tax is now needed to protect practices.
 
‘What I would like to see is a nationally consistent approach to general practice that ensures there’s no retrospective application and consistent amnesty periods for practices to transition their business models,’ she said.
 
Meanwhile, the Special Commission of Inquiry is set to review healthcare funding in NSW and identify opportunities to deliver higher quality, timely, and more accessible care.
 
The Inquiry will examine the governance and accountability structure of NSW Health, how health services are funded, and how to address escalating costs, limit wastage and identify areas of improvement in financial management. 
 
RACGP NSW/ACT Chair Professor Charlotte Hespe welcomed the inquiry, saying it is a step in the right direction.
 
‘General practice plays a critical role, keeping people healthy and reducing pressure on our emergency care system,’ Professor Hespe said.
 
‘There is so much more that GPs can and want to do for our patients, we just need to remove the barriers.’
 
NSW Health Minister Ryan Park said it is a ‘once-in-a-generation’ look at the health system and its funding.
 
‘The purpose of the Inquiry is to help us determine what steps we need to take to move forward and how we can continue to deliver the essential health services our community deserves,’ Mr Park said.
 
Richard Beasley SC, senior barrister and former Senior Counsel Assisting the Special Commission of Inquiry into the Ruby Princess, has been appointed Inquiry Commissioner.
 
A final report is due to be handed down in August next year.  
 
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newsGP weekly poll How long do you usually spend completing a review of a GP Mental Health Plan?

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Dr anon   25/08/2023 9:05:01 AM

PSI income and now payroll tax.

Can we just call ourselves tradies? At least then the health minister might like us too (nirses and pharmacists wanting to be doctors).

We need urgent extremely strong representation, otherwise general practitioners will be like general physicians, and watch health costs then.


Dr Camilo Guerra   25/08/2023 3:40:29 PM

This article is just like a black comedy satire. Except that it is not funny.
Not long ago, our brave RACGP representatives came out of “though negotiations” with the government about General Practice being in a precarious position given the Medicare rebate and how this was directly affecting the viability of primary medical services and financial long term survival of General Practice. Hence the pillar of primary healthcare and frontline of medical services in Australia. Don’t forget that during the pandemic we were FRONTLINE HEROES!
So the RACGP Junta came out of negotiations hailing their efforts as a great achievement that will inject life into General Practice present and future. Medicare Rebate “adjusted” to the equivalent of a cup of cardboard coffee mines the liquid, just the cup! And triple the bulk billing incentive… sometime in the near future. But no words about any red tape and paperwork requirements . I guess they forgot about this Tax small detail, right?🙄