Payroll tax fears trigger emergency meeting

New South Wales Finance Minister Courtney Houssos has reportedly arranged to meet with RACGP representatives on Friday to discuss growing concerns around payroll tax.
 
While negotiations have been taking place for at least the past year, the Daily Telegraph is reporting that coverage of new data sourced by online patient booking company HotDoc has spurred the Government into action, with a subsequent meeting also scheduled for March.
 
It is expected that 95% of GPs will need to increase fees once a freeze on audits ends in August, and the RACGP has been urging governments across the country to adopt the same approach as Queensland, which last year announced GP services will not be subject to the tax.
 
However, earlier in the week, NSW Premier Chris Minns refused to say whether practices would be liable for retrospective tax bills should his Government proceed with its new interpretation of the issue.
 
He also would not say if the Government would provide assistance to tax-burdened clinics facing potential closure, saying he did not think it would come to that – despite the HotDoc research indicating that 16% of practice owners believe their business would at risk.
 
‘We’re having good conversations with those organisations and peak bodies and we’re going to make sure that bulk billing and GP access by the general community is available to the people of NSW,’ he said.
 
‘It is important to have a functioning primary healthcare sector in the state, it takes pressure off our public hospital system and that’s not going to be the case if we whack them with a massive new tax.
 
‘We recognise it could have an impact on primary healthcare and we can’t allow that to stand.’
 
Dr Rebekah Hoffman, Chair of RACGP NSW&ACT, told the Telegraph that doctors and patients want clarity on what will happen once the pause lifts.
 
‘We need to know now what is going to happen because we need to put in plans that could take months – if our businesses need to be restructured and letting patients know why costs will go up,’ she said.
 
Opposition Finance spokeswoman Eleni Petinos has come out in support of GPs, saying that the imposition of payroll tax, especially backdated bills, would be devastating for the healthcare system.
 
‘The Minns Labor Government should be supporting our doctors, not imposing a retrospective tax that will see a number of GP clinics wiped out and add pressure to our health system,’ she said.
 
The news broke on the same day that the Herald Sun obtained correspondence from Victorian Treasurer Tim Pallas to Federal Health and Aged Care Minister Mark Butler, in which he appeared to double down on his state’s position regarding payroll tax.
 
The letter also criticised Minister Butler’s public urging for states to resolve the issue, after he warned that it could undermine recent Federal Government investments in Medicare aimed at improving access to general practice care.
 
‘I would appreciate if you refrained from making public comments on this issue that are likely to mislead practice owners, doctors and patients,’ Treasurer Pallas said.
 
‘The Victorian Government has been transparent and actively engaging with various stakeholders including individual GPs and industry peak bodies on this matter.’
 
However, last October, Treasurer Pallas appeared to muddy the waters by ignoring requests for amnesty and instead announcing that payroll tax bills would be waived or reduced for clinics at risk of closure.
 
At the time, RACGP Victoria Chair Dr Anita Muñoz told newsGP the pledge would do little to reassure GPs and practice owners.
 
‘To protect not just general practice, but the entire health system, we need certainty that no retrospective tax bills will be applied,’ she said.
 
‘We [also] need certainty about what is required by general practice to demonstrate that their GPs are not employees but are tenant contractors.’
 
Some practices have already been hit with back-dated tax bills totalling up to $800,000, sparking fears around business sustainability in the state should the Victorian Government push ahead with its new interpretation.
 
Earlier this year, RACGP President Dr Nicole Higgins told newsGP the Victorian Government needs to ‘come to the table’.
 
‘This tax on Medicare effects everybody. Not only practice owners and independent practitioners, but most importantly, it impacts our patients, as it’s a cost to pass on,’ she said.
 
‘GPs already pay payroll tax. National consistency is needed around the application of payroll tax to provide certainty for GPs.
 
‘I call on the Victorian Government … to offer a solution that will ensure we have a viable and sustainable future for general practice in Victoria.’
 
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