The Royal Australian College of General Practitioners (RACGP) is urging political leaders to intervene after general practices in Canberra have been threatened by a new tax grab.
The RACGP has been informed that the ACT Revenue office has started contacting GP clinics in Canberra regarding payroll tax.
A recent re-interpretation of tax legislation has put practices across the country in line for additional tax bills of hundreds of thousands of dollars. The new costs are beyond the margins of most clinics, meaning they must either raise fees or close. Queensland is the only state to have announced an amnesty period for practices up to 30 June 2025.
RACGP President Dr Nicole Higgins said: “Access to essential GP care is at a tipping point in Australia’s capital.
“Canberrans are mourning the loss of Hobart Place, which is one of many practices that have been forced to close across the country after successive governments stripped funding from general practice care and patients’ Medicare rebates.
“Now the ACT Revenue Office has started contacting practices across Canberra regarding payroll tax – this Sick Tax threatens the future of care in our capital.
“General practices in Australia already pay payroll tax on our staff, including receptionists, nurses and GPs in training. But most GPs are not employees, they rent rooms from a practice owner and work under independent agreements.
“This is an extra tax on general practice care coming at the worst possible time. It will increase costs for patients – it’s expected to add around $15 per consult.
“It will put more pressure on hospitals, worsen the health system crisis, and undermine the Federal Government’s Medicare reforms.
“Australians urgently need our political leaders to get it together. We need serious reforms and funding to ensure everyone can get the care they need from a GP, no matter their income or postcode. And state and territory leaders need to stop the Sick Tax which threatens to undermine any efforts to improve access to care for Australians.”
Garema Place Surgery will be one of two remaining practices left in Canberra city centre after Hobart Place announced it had to close due to the erosion in value of Medicare rebates.
Garema Place Surgery Practice Principal Dr Felicity Donaghy said: “We would have no way of absorbing these extra costs. Our only option would be to pass it on to patients. Profit margins in general practice sit at about 5% and payroll tax is 6.85% in the ACT.
“I am speaking out on behalf of our patients and the many people in Canberra who will struggle to afford increased costs for essential care. We need a solution, because our state already has the lowest bulk billing rates in Australia, and if practices are forced to raise fees, it will be devastating for the community.”
A poll of GPs across Australia found only 3% would be able to absorb costs associated with GPs becoming liable for payroll tax – 78% said they would be forced to raise fees.