Doctors label extra hit amid crisis ‘immoral’ as Treasurer refuses to budge on GP tax

The state’s medicos warn practices will soon be forced to increase fees after Queensland’s Treasurer doubled down on his government’s stance that GPs should be liable for tax bills they weren’t previously paying.

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Queensland’s Treasurer has doubled down on his government’s stance that GPs should be liable for hundreds of thousands of dollars in tax bills they weren’t previously paying, as the state’s medicos warn it’s only a matter of weeks before practices are forced to increase fees.

Treasurer Cameron Dick said the way payroll tax applied to general practice in Queensland hadn’t changed since 2008 amid outcry from GP practices that say they have become victim to a new cash grab.

According to peak medical bodies including the AMAQ and the RACGP, a new interpretation of payroll tax laws means general practices are now liable for an increased 4.75 per cent of total billings made by doctors who work as contractors.

But the Queensland Revenue Office, in a rare public appearance on Tuesday alongside Treasurer Cameron Dick, stated this simply wasn’t the case.

Treasurer Cameron Dick outside Parliament House on Tuesday. Picture: Lyndon Mechielsen

Acting Queensland Revenue Commissioner Amy Rosanowski and Mr Dick explained the way payroll tax was applied to medical centres had not changed since 2008 – though the issue had come sharply into focus since a number of court rulings interstate that found certain medical centres were structured in a way that made them liable for payroll tax.

Ms Rosanowski said the QRO released a “ruling” at the end of 2022 reiterating its “longstanding application of the law” in response to questions from medical bodies.

She said compliance action on general practices had occurred between 2008 and before the start of the Covid-19 pandemic, when compliance action on the sector was paused.

But RACGP Queensland chair Dr Bruce Willett said it was simply a case of semantics.

“I’ve been a GP for 35 years and I have always worked under these arrangements,” he said.

“I commend the Queensland government for its retrospective audits which were limited to one year, but I think that is an acknowledgment that things have changed.”

Royal Australian College of General Practitioners Queensland Chair Dr Bruce Willett on Tuesday. Picture: Lyndon Mechielsen

It is an issue that is dogging all states, with the exception of Western Australia, with the new legal cases paving the way for governments to start putting their hand out to recoup payroll tax on contractors.

The RACGP has taken out a full-page ad in today’s Daily Telegraph pleading with NSW Premier Dominic Perrottet not to seek extra tax from GP practice who already paid payroll tax on the staff they employed, warning it will decimate general practice in the state.

Dr Willett said Queensland had the opportunity to show leadership and put patients first because ultimately the cost will be passed on to the patient.

GP clinics in Queensland have been putting off raising their fees – expected to be around 15 per cent – in the hopes the government would see sense and offer a last minute reprieve to keep the status quo.

“It’s difficult to go back down again, you know, it’s difficult to be jumping all over the place in terms of prices, but practices can probably only afford to wait a couple more weeks before they make the increase,” he said.

Mr Dick said authorities were engaging with peak medical bodies to alleviate their concerns, support them and make sure “everyone has a clear understanding”.

“They asked us to provide clarity to them, we’re continuing that process, that hasn’t finished yet … there’s more work to be done, let’s see what that outcome is,” he said.

However, Mr Dick said any form of exemption for GPs would break the national consistency of payroll tax law.

“Even though rates and thresholds may vary from state to state, it is a harmonised national system, which means all states and territories apply payroll tax in a consistent manner,” he said.

“Individual states do not exempt particular industries or professions because it’s a national system. That’s particularly important for businesses that operate across state and territory borders.”

It comes as the federal government has committed to reviewing Medicare after years of stagnant rebates, but the RACGP warns that any increases will be simply eaten up by the state taxes.

Australian Medical Association Queensland president and general practitioner Dr Maria Boulton has labelled the tax “immoral”.

“GP practices already pay payroll tax on our employees, the fact of the matter is that there’s been a change in the interpretation of the law as pertains to patients being seen by their GPs and accessing healthcare services,” she said.

“When a patient goes to a public hospital, that service is payroll tax exempt and it’s exempt for a very good reason. It’s because healthcare is an essential need that humans have in Australia and that is why it is so important and this is why we’re here, we’re here for patients. We’re here because patients deserve to have access to their GPs.”

AMAQ President Dr Maria Boulton. Picture: Lyndon Mechielsen

Dr Boulton said that practices relied on costly and expert advice from lawyers and tax experts to ensure their compliance with laws.

Opposition Leader David Crisafulli was joined by Dr Boulton and Dr Willett at a press conference on Tuesday where he lashed the government over its handling of the issue.

Mr Crisafulli said that on 26 occasions before the last election, the Treasurer promised there would be no new or increased taxes.

“Well nothing has changed for a single medical practitioner across the state, their business model remains exactly as it was and yet in the shadows of Christmas, a new tax grab was implemented that will be passed on to patients in the middle of a cost-of-living crisis,” he said.

“Why would you charge people more to see their GP in the middle of a health crisis? Why would you funnel more people into an emergency department that is already bursting at the seams?”

The RACGP has surveyed its members which revealed that only three per cent of practices said that they could absorb this tax, 87 per cent of practices said that they would have to pass it on and one in five practices said that they would go broke with the new tax burden.

The Sunday Mail revealed last month that the new requirement to pay tax would see the end of bulk billing and increase out of pocket costs by as much as 15 per cent.

Brisbane practice owner Dr Aaron Chambers said he had no choice but to raise patient fees.

“I’m really worried about the people we don’t see because I know it’s exactly the people who might need health care and are most vulnerable,” he said.

“We know that the people who have the lowest income are at most risk of adverse health outcomes.”

He said without sufficient federal funding to Medicare and with an added tax on patients it became impossible to support those patients.