The Royal Australian College of General Practitioners (RACGP) has applauded the Queensland Government’s decision that general practitioner (GP) services will not be subject to extra payroll tax – a move that will help keep essential general practice care affordable for Queenslanders.
The Queensland Government today announced that a Revenue Office ruling to be issued next week will make clear that under normal business arrangements, patients’ fees including Medicare benefits and any out-of-pocket fees, when they are paid directly by a patient to a GP for that GP’s services, will not be subject to payroll tax.
It comes after the RACGP advocated strongly that a new interpretation of payroll tax was threatening the future of general practice.
While general practices pay payroll tax on their employees, including receptionists, nurses, and GPs in training, it has never applied to GPs because most doctors are not employees, they work under independent agreements. But there was a change in the interpretation of payroll tax law after court judgements in New South Wales considered GPs at certain medical practices as employees under relevant contracts for payroll tax purposes.
RACGP surveys found only 3% of practices would be able to absorb the costs of extra payroll tax on independent GPs, 78% would have to raise fees; more than half of respondents said they would have to increase out-of-pocket fees by more than $20; and 35% would consider moving interstate for favourable payroll tax settings.
RACGP Queensland Chair Dr Bruce Willett thanked the Queensland Government for listening to GPs.
“I want to thank our government for listening to the RACGP, our member GPs and practice owners, and I look forward to seeing the detail in the Revenue Office ruling,” he said.
“This issue has caused a great deal of anxiety and stress for GPs, practice owners and our teams, and I am so pleased that the Queensland Government sat down with us, listened, and worked with us to find a permanent solution. And I will continue to work with the government to get this right.
“The government has chosen to put Queenslanders’ health and wellbeing first. They have chosen to help keep essential general practice care affordable. And in the longer-term, their actions will help to save the state budget by ensuring more people can get the care they need from a GP, and don’t end up in hospital.
“GPs across Queensland will be celebrating today, and our community should be celebrating too. This decision provides certainty for practices that they won’t need to increase out-of-pocket fees to cover a new tax, because there is none.
“It will help to keep general practice care affordable, which means healthier people and less spending on expensive hospital care. It is smart, future-focused reform for our community.”
RACGP President Dr Nicole Higgins applauded the Queensland Government for acting to help keep essential general practice care affordable and urged other jurisdictions to follow.
“As a Queensland GP and practice owner, I know this is a win for GPs across Queensland and our patients. It is a clear signal that our state government recognises the value of general practice care in keeping Queenslanders healthy and out of hospital,” she said.
“The vast majority of practices run on very thin margins and would have had to pass the costs of any extra payroll tax on to patients. People are already battling a cost-of-living crisis. This would have made it that much harder for people on lower incomes to get the care they need, and it would have put more pressure on our state’s hospitals.
“The Queensland Government’s decision will be encouraging for the GPs who work tirelessly caring for patients across the state every day. We have such a rewarding and essential job, and our government has shown it recognises the value of general practice.
“It is also a step in the right direction to ensure the state has a strong general practice workforce for generations to come. Our survey found 35% of GPs and practice owners would consider moving interstate for favourable payroll tax settings that ensure they are viable and can keep the doors open for patients.
“I strongly urge other jurisdictions to follow Queensland and ensure GP services are not subject to extra payroll tax to provide certainty to GPs, practice owners and teams. General practice care is essential, and it needs to be affordable for everyone.”
Queensland was the first state to listen to the RACGP’s concerns for the profession and provide an amnesty period to prevent practices being hit with retrospective tax bills and having to close or increase fees while a solution could be found. Most other jurisdictions followed, including New South Wales, South Australia, Queensland, and the Australian Capital Territory. Western Australia also confirmed it doesn’t intend to change its current payroll tax provisions to get more tax from GPs.