10 January 2023

RACGP: Queensland payroll tax move another nail in the coffin for general practice care

The Royal Australian College of General Practitioners (RACGP) is today warning that the Queensland Government payroll tax ruling will worsen the general practice crisis and access to care for patients across the state.

It comes following many months of advocacy by the RACGP after several Queensland practices were hit with backdated payroll tax bills for up to millions of dollars based on a new interpretation of payroll tax law after a New South Wales tribunal ruling.

The Queensland Revenue Office has now clarified the rules for general practitioners who work as tenant doctors at medical clinics in a Commissioner’s public ruling. The RACGP is concerned the changes will result in increased costs for practice owners, which will flow on to patients and force some practices to close their doors. 

RACGP President Dr Nicole Higgins slammed the decision as a kick in the guts for Queensland patients.

“While I’m pleased that the Queensland Revenue Office has listened to our advocacy and will limit audits on practices to the previous financial year, the scenarios provided of what is in scope of payroll tax in this ruling is deeply concerning,” she said.

“It is another nail in the coffin for struggling general practices in Queensland.

“Practices with two or more full time equivalent GPs will be affected. So, it’s particularly bad news for rural and remote communities, which are often served by small practices with only a few very hard-working GPs.

“GPs usually work under service agreements with practices and if practices are suddenly slugged with payroll tax costs, which can be tens of thousands of dollars, they will be forced to pass the costs on to patients. If patients can’t afford the higher out-of-pocket costs, practices will be forced to close their doors.

RACGP Vice President and Queensland Chair Dr Bruce Willett said the changes would be devastating for communities across the state.

“This will have a devastating impact on communities across Queensland and will result in worsening health conditions, and more strain on our already overburdened hospital system and emergency departments,” he said.

“The RACGP has long been saying practices across Australia should not be slugged with this tax on top of everything else. Successive federal governments have stripped funding from GP care over decades, and the Medicare freeze has taken $2 billion and counting from GP patients.

“So, we are continuing to call for an exemption for payroll tax for all general practices. State and territory governments need to act to ensure people can continue to access high-quality GP care, and practices can keep their doors open.”

The RACGP President said urgent reforms are needed to safeguard GP care for all Australians into the future.

“While we welcome state Premiers recently backing our calls for urgent reforms to fix Medicare and ensure no patients are left behind, the impact of state payroll tax decisions like Queensland will only further reduce bulk billing,” she said.

“Medicare is broken due to chronic underfunding by successive governments, and the fact emergency care has been prioritised over prevention, early intervention, and management of chronic conditions. As a result, we are seeing more and more practices being forced to close or move away from bulk billing in order to keep their doors open, and many are struggling to find GPs.
 

“We need reform now, and we need to get it right. We have the opportunity to improve patient health outcomes and reduce spending on expensive hospital care by investing in general practice care for patients – both local and international research shows this approach works.

“While we need long-term reforms to ensure everyone can access high-quality GP care into the future, there are many simple measures the federal Government can implement quickly to improve access to care and health outcomes in the short-term.

“This includes investing in longer consultations for patients with complex needs, and tripling bulk billing incentives, which will help improve access to care for those who need it most, including those who are vulnerable and disadvantaged. I look forward to continuing to work with our federal Government, as well as state and territory governments, on the reform agenda for the health system.

“There is no substitute for general practice care – without it the path will only result in poorer health outcomes for patients and longer wait times at already over stretched public hospital emergency departments. The federal and state and territory governments need to work together on a long-term plan to ensure everyone can access high-quality GP care, no matter their postcode or income, and nobody misses out.”

The RACGP’s advocacy priorities include reforms to improve patient health outcomes in the short-term, including support for patients after an unplanned hospital visit, and enhanced primary care services for people over the age of 65, with mental health conditions and people with disability.

The advocacy priorities are drawn from the College’s Vision for general practice and a sustainable healthcare system (Vision), which outlines the need to restructure the healthcare system into one that prevents illness, and provides the right care for patients when and where they need it, and is sustainably funded into the future.

PricewaterhouseCoopers Consulting found that implementing The Vision would create substantial economic benefits by reducing the need for more expensive secondary care and improving the nation’s productivity through a healthier workforce. 


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