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Payroll tax should be top of National Cabinet agenda: RACGP
The college says a singular set of rules need to be established to keep practice doors open, labelling the status quo ‘a joke, at best’.
This year’s Health of the Nation report found 80% of practice owners are concerned about the viability of their practice. (Image: AAP)
The RACGP is calling for urgent action on payroll tax, as inconsistency continues to provoke widespread anxiety among practice owners and tenant doctors alike.
It says the looming National Cabinet meeting should be used to create nationally consistent rules to protect patients’ access to healthcare.
The plea comes after a payroll tax ruling in Queensland confirmed patients’ fees paid directly to a GP for their services will not be subject to payroll tax.
This is the same approach the RACGP now wants implemented in every state and territory, all of which currently have different rules, concessions, and amnesties.
Specifically, it wants governments to commit to:
- no retrospective collection of payroll tax liabilities
- clarification on what constitutes a ‘relevant contract’
- a full exemption from payroll tax for independent practitioners, or an amnesty until the Federal Government finalises its health funding reforms, and general practices can transition to new business models
- no payroll tax on patients’ fees/Medicare paid to their GP for their services.
RACGP President Dr Nicole Higgins said without these changes, healthcare systems will deteriorate and state hospitals will be forced under more pressure than ever before.
‘It’s a joke at best and coercive at worst, and it will send practices broke,’ she said.
‘The Federal Government has recognised the critical role of general practice in keeping people healthy and out of hospital, and they’re progressing important reforms to strengthen Medicare, and ensure all Australians have access to affordable GP care.
‘But state and territory governments risk derailing these federal reforms by hitting practices with extra payroll tax. In many states and territories, there’s a very real risk of widespread practice closures and higher out-of-pocket fees for patients.’
This year’s
Health of the Nation report found 80% of owners are concerned about the viability of their practice, while
184 general practices shutdown last year alone.
Clinics across the nation have already faced potentially practice-closing tax bills,
with one totalling $800,000 and another more than $1 million.
This is despite a
2010 Harmonisation Joint Protocol for payroll tax, a key mechanism to ensure a uniform approach to the application of taxation across Australia.
Dr Higgins said the lack of harmonisation is becoming ‘dire’ for many, while for others it has led to confusion and fear.
‘For example, Victoria is refusing to admit anything has changed, despite the many practice owners crying out for help because they’re being hit with huge retrospective tax bills they can’t afford to pay,’ she said.
‘And just recently, in Australia’s capital, practices have received threatening letters from the ACT Revenue Office informing them they risk being audited unless they register for payroll tax.
‘The ACT Government has shown it has no clue how general practice or bulk billing works by demanding practices bulk bill an impossibly high amount in order to receive a temporary payroll tax amnesty.
‘We need to sort this out urgently.’
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