With new polling finding the Victorian Government’s payroll tax on non-employee GPs is already costing patients, the Royal Australian College of GPs (RACGP) has called on all parties to commit to ending payroll tax on independent GPs soon after the 28 November election.
New billboards in the regional city of Bendigo have brought the issue into sharp focus, with one local GP pointing out the tax makes it “harder to attract doctors to provide services to the community”, which ultimately, costs patients.
The billboards highlight the ongoing risk the tax poses to healthcare access, drawing on a survey of 226 GPs across Victoria that found:
- 39% of Victorian general practices will reduce bulk billing or increase fees in the next 12 months if no changes are made to payroll tax
- 25% of practices have already done so
- 29% are considering moving or investing outside Victoria due to tax
- 62% of Victorian practices’ finances had worsened in the past two years despite record investment in Medicare
- 53% said they are “extremely concerned” about the long-term viability of general practice in Victoria.
Others delayed hiring non-GP staff who support care (9%), reduced opening hours or after-hours services (11%), or delayed investment in equipment, facilities, or technology (10%).
RACGP Victoria Chair Dr Anita Muñoz reiterated her call to remove the obstacle the tax had placed on GP access, especially outside Melbourne, and said change must happen soon.
“Practices and patients can’t wait 12 months on a promise to fix this in the future, they need a solution yesterday,” she said.
“That’s no exaggeration – four in 10 GPs and practices have said they need action within a year, and a quarter of them have already had to pass on costs.”
At a recent RACGP and AMA Victoria Health Debate, the Coalition, One Nation, and Greens all reiterated their commitment to joining other states like Queensland and Tasmania in exempting GPs who provide care as independent contractors – and their patients – from the tax.
Opposition Leader Jess Wilson went one step further and said she is ready to recall Parliament to make the change “this side of Christmas”. Dr Muñoz welcomed the commitment and urged all parties to do the same.
“It can’t come soon enough. Practices will be mapping their costs in 2027, and they need to know,” Dr Muñoz said.
Local GP Dr Dan Harbison said his practice, The GP Clinic Bendigo, is aiming to expand from four GPs to a practice with room for several more. He says this will allow them to provide more services for patients as well – provided they get payroll tax relief.
“We want to attract more doctors who want to provide more services to the community overall,” he said.
“But many GPs are comparing working in Victoria, with its high payroll tax on GPs, to other states like Tasmania and Queensland where there’s no tax and a practice can offer a GP better revenue as a result.”
Dr Harbison said the survey’s finding that three in 10 GPs [29%] are considering moving or investing outside Victoria due to the payroll tax resonates with his own experience.
“In the wider Bendigo community, people worry about the viability of their clinics,” he said.
“There’s been significant pressure from government to bulk bill. Many practices have adopted that model, but it becomes much harder to sustain if there’s both payroll tax and Medicare rebates that don’t keep pace with inflation.
“Practices have already had difficult conversations about moving from bulk billing to mixed billing or private billing. The message from government feels very unclear.”
Earlier this year, the Federal Government revealed Medicare funding for rebates and bulk billing would increase by just 2.6% in July, despite Consumer Price Index inflation of 4.2%.
Dr Harbison said payroll tax often wipes out general practices’ narrow profit margins completely and stymies their ability to invest in providing more care.
“It means you’re largely providing care it for the love of it, which we are. But you can only do that for so long,” he said.
“Adding an extra tax just makes it harder for our patients to access the care they know, expect, and deserve.”
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