The Royal Australian College of GPs has secured an important confirmation that the Western Australian Government does not intend to change the way its existing payroll tax provisions apply to general practice.
RACGP WA Chair Dr Ramya Raman received written confirmation from the government after raising member concerns that WA might follow other states in putting an additional payroll tax burden on GP practices.
Practice owners across Australia already pay payroll tax on their employees, including receptionists, registrars, and nurses, but it hasn’t previously applied to GPs. This is because most doctors are not employees – they lease rooms and facilities from a practice owner and operate under independent agreements.
However, recent court judgements in New South Wales have considered GPs at certain medical practices as employees for payroll tax purposes. The RACGP has been
advocating strongly in all states since, and has secured amnesty periods for
GPs in South Australia and Queensland.
The letter from WA’s new Deputy Premier and Treasurer Rita Saffioti states that under WA’s existing payroll tax provisions, most GPs working in medical practices under independent agreements “are considered contractors running an independent business. The $1 million tax free threshold means the majority are not subject to payroll tax. The Western Australian Government does not intend to change these provisions.”
RACGP WA Chair Dr Ramya Raman welcomed the confirmation as a relief for WA’s GPs.
“The WA Government has listened to the RACGP and understands our concerns – this will be a relief for GPs across our state,” she said.
“Practices operate on thin margins, and if they are hit with an additional payroll tax bill, which can be hundreds-of-thousands of dollars, they will be forced to pass the costs on to patients. If patients can’t afford the gap fees, practices will close.
“This would put more pressure on WA’s already overstretched hospitals. It’s a nightmare scenario, and the WA government gets it.
“General practice is the engine of our health system – it keeps people healthy and happy in the community for longer.
“Everyone needs and deserves access to high-quality and affordable GP care, and I look forward to continuing to work closely with our state government to this end.”