NSW Government continues to engage with GPs on payroll tax


The NSW Government continues to engage with GPs and stakeholders as it finds a solution to payroll tax issues.

The NSW Government has not imposed additional payroll tax obligations on GPs and GP practices.

In August 2023, following uncertainty in the sector and engagement with practices, the Australian Medical Association (AMA) and Royal Australian College of GPs (RACGP), the NSW Labor Government legislated a 12-month pause to payroll tax audits on GPs.

It also brought in a 12-month pause on tax penalties and interest accrued on outstanding payroll tax debts.

In 2018, the Chief Commissioner of State Revenue issued a payroll tax assessment to a clinic concerning payroll tax. That assessment was the subject of legal challenges through to 2022.

The 12-month pause also gave time to see the impact of the increase in funding to Medicare rebates by the Federal Labor Government.

Recent Medicare data shows an uptick in bulk-billing rates in NSW, bringing optimism about the relief of cost pressures to the sector.

When the 12-month pause was legislated, the RACGP welcomed the time it gave to find an outcome. RACGP NSW/ACT Chair Professor Charlotte Hespe called it “a positive step in the right direction for the future of GP care in NSW.”

The NSW Labor Government continues to actively engage with GPs, practices and industry stakeholders while the 12-month pause is in effect to find an outcome.

Minister for Finance Courtney Houssos said:

“We understand that families, households and businesses across NSW are feeling the pinch of a once-in-a-generation cost-of-living crisis.

“This is yet another legacy issue from the former NSW Liberal-National government. Their inaction on this issue dates back to 2018 and we have been left to clean up their mess.

“In August 2023, the NSW Government instituted a 12-month pause on payroll tax audits for GPs and GP practices, and a 12-month pause on tax penalties and interest accrued on outstanding payroll tax debts.

“Since August, I have met with a number of GPs and their representatives to understand what challenges they’re facing.

“The true cause of the pressure on GPs is the disastrous decision by the former federal Liberal-National government to freeze the indexation of bulk-billing rates.

“The Federal Labor government’s increase to bulk-billing came into effect in November.

“When we announced the pause in August 2023, we said we wanted to see the impact of the federal Government’s changes to the bulk-billing incentive. It’s clear those effects are starting to flow through to practices to ease cost pressures on GP practices and patients.

“I will continue to consult with GPs, practice owners and stakeholders over the coming months.”

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