he Royal Australian College of GPs (RACGP) has called on the ACT Government to step up with a solution to payroll tax and patient costs in the territory.
In the historic interpretation of payroll tax under which ACT GP fees were set, practices paid payroll tax on the salaries of employees like nurses and receptionists, while the billings of GPs who work under independent arrangements and pay a percentage of billings to practices, were exempt.
Following a New South Wales court case, the ACT’s revenue office began to consider independent GPs’ billings as liable for payroll tax. While Queensland has provided a workable solution and other states offered amnesties or otherwise engaged with GPs, the ACT Government put forward a temporary relief for general practices that increased bulk billing to 65% of patients at a time when Canberran bulk billing general practices were increasingly unviable.
RACGP NSW&ACT Chair Dr Rebekah Hoffman said the ACT Government’s obstinacy is costing patients.
“Canberrans’ ability to access a GP is under threat from their own government,” she said.
“This GP payroll tax is a tax on patients, and unfortunately, it will bite. We have sought to engage with the ACT Government and GPs in our capital territory, and will continue to do so, which is why I’m in Canberra today. We need a solution that actually reflects the high costs in the ACT.
“Unfortunately, the ACT Government has left GPs with no choice but to increase fees. If other jurisdictions offer better remuneration and cheaper cost of living, more GPs will leave and fewer GPs will come to Canberra.
“It’s clear the ACT government needs to do more to attract GPs to practise in Canberra, but in not working towards a solution, it’s doing the opposite.”
The Federal Government has spoken out against the tax, with health minister Mark Butler MP saying he was “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,” with Federal Treasurer Dr Jim Chalmers MP echoing his concern.
Canberra GP and principal of the East Canberra General Practice Dr Clara Tuck Meng Soo said Canberra’s general practices do not have the margins to absorb payroll tax on behalf of patients and had been forced to add a levy for the tax.
“This is a tax on patients and a tax on health,” she said.
“General practices are small businesses with narrow margins. We simply don’t have the profitability to afford to absorb payroll tax on patients’ behalf. We have had to impose a $3 levy on privately billed patients, but we’re at the lower end and still coming up short from where we were before payroll tax was imposed on independent GPs – I believe other practices are charging more depending on their individual circumstances.”
A survey by medical appointment booking platform HotDoc found general practices expect an average increase of $12 for a standard 20-minute consultation.
“The Federal health minister’s bulk billing figures show that Canberra had the lowest increase in bulk billing of any jurisdiction,” Dr Meng Soo continued.
“The ACT Government knows it’s creating challenges for their communities, but their offer to waive payroll tax on practices that increase bulk billing to 65% of patients doesn’t make sense – even with a tripled bulk billing incentive for some patients, we’d be making a loss in the high-cost environment of Canberra.
“Unlike our elected representatives, GPs are asked to choose between their conscience and their income, to earn less to increase access for our patients. We can only do so much. Last year I had to close a practice because it was not viable to stay open while bulk billing the number of patients we were.
“Every dollar we pay in payroll tax is an incentive against bulk billing.”
