GPs call for certainty after Treasurer’s baffling payroll promise

The Victoria Treasurer Tim Pallas has announced payroll tax bills will be waived or reduced for clinics at risk of closure – but has seemingly ignored requests for an amnesty.
 
Treasurer Pallas made the promise in a letter last Friday – but GPs have said its contents are vague and confusing.
 
‘As Treasurer I have previously used my “ex gratia” powers to reduce or waive tax liabilities for organisations facing insolvency where it is in the public interest to do so,’ the Treasurer’s letter said.
 
‘This Government has no interest in any GP clinic closing their doors, and I would be inclined to use my “ex gratia” power to prevent that happening were any GP clinic to become insolvent as a result of a payroll tax liability [provided] the clinic had engaged with the SRO in good faith to try and reach a settlement.’
 
Addressed to the RACGP, the Australian Medical Association, the Australian GP Alliance, and the Primary Care Business Council, the letter has left doctors and owners confused about how some general practices could be offered assistance when others are not.
 
RACGP Victoria Chair Dr Anita Muñoz said GPs have gone to ‘extraordinary lengths’ to advocate for the tax to be scrapped and believes the letter will do little to reassure stressed owners.  
 
‘To offer potential ex gratia relief when a business is facing insolvency really doesn’t achieve anything, because by the time a practice goes to the Treasurer begging for assistance, the viability of that business has been forfeited,’ she told newsGP.
 
‘Practitioners, staff and patients can’t operate under that kind of Damocles sword.
 
‘What we do need in order to keep general practice functioning in Victoria is certainty that we will not be facing unfair retrospective tax bills.’
 
One practice owner in Victoria has said they face a retrospective payroll tax bill of up to $5 million.
 
Victorian Shadow Health Minister Georgie Crozier said the State Government needs to stop the ‘unfair health tax’ with immediate effect.
 
‘The Treasurer’s letter is a clear admission by the Government that it knows this retrospective health tax will close down GP clinics and drive up the cost of basic healthcare,’ she said.
 
Pressure has long been building on the Victoria Government to scrap the tax or announce an amnesty.
 
Queensland backed away from its rollout last month, while Western Australia has ruled it out completely.
 
New South Wales, South Australia, and the Australian Capital Territory have all introduced amnesties or concessions, giving GPs more time to chart a way forward that accommodates the change in approach.
 
Dr Muñoz said if GPs are not offered urgent and meaningful help, practices will close and never reopen.
 
‘If general practices collapse so will health systems,’ she said.
 
‘We are the most financially efficient and clinically efficient part of the health system.
 
‘Wherever general practices close, all of those thousands of patients flood into the public health system and any service delivered in a public health environment is significantly more expensive than that delivered in general practice.
 
‘Then we’re going to have a much more severe and desperate conversation about attempts to salvage a health system and trying to prevent the rest of general practice disappearing from the state.’
 
A previous newsGP poll found only 3% of readers believe their practices can absorb the costs of extra payroll tax, and more than half of respondents said they will have to increase out-of-pocket fees by more than $20.
 
A separate newsGP poll found more than one third of readers would consider moving interstate if that region offered more favourable payroll tax arrangements.
 
Dr Muñoz said that without change from the Victoria Government, the health system will be unsustainable, and she made a renewed plea for an amnesty to give GPs time to prepare.
 
‘We will have patients flooding emergency departments with problems that are not appropriate, they’re not emergency cases, but if you have no GP to speak to about an issue, you’re going to have to seek care somewhere,’ she said.
 
‘To protect not just general practice, but the entire health system, we need certainty that no retrospective tax bills will be applied.
 
‘We need certainty about what is required by general practice to demonstrate that their GPs are not employees but are tenant contractors.’
 
The RACGP started a petition, ‘Stop the patient tax grab and keep GP clinics open!’ earlier this month, which has more than 4600 signatures so far.

As part of the campaign, Victoria’s 1500 medical clinics have been armed with posters and brochures for patients and are calling on communities to support the cause.
 
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