Doctors say move to charge payroll tax on tenant GPs will end bulk billing

Doctors fear a court decision has cleared the way for state governments to start aggressively chasing GP practices for payroll tax — which could spell the end of bulk billing.

Doctors fear a decision by the NSW court of appeal has cleared the way for state governments to start aggressively chasing GP practices for payroll tax — which medicos warn will mean the end of bulk billing.

Last week the NSW Court of Appeal dismissed an appeal by two GPs against a ruling from Revenue NSW that they must pay payroll tax.

The doctors had sought to overturn a ruling that GPs who are tenants of practices should be counted for the purposes of calculating its tax bill.

State tax offices have in ­recent years begun chasing practices for the tax through audits, but the vast majority have yet to be hit.

Doctors say they fear the ruling from the court will give state tax offices around Australia the green light to start aggressively pursuing them.

The AMA estimates adding payroll tax to practices that have not had to pay it before will put about $10 to $15 on the cost of each consultation.

It warns doctors will be forced to pass that cost on to patients, meaning an end to bulk billing.

Doctors warn that levying payroll tax on tenant GPs could spell the end of bulk billing. Picture: iStock

The AMA estimates that about 400 of the 600 GP practices in Western Sydney will now be liable for payroll tax.

The Royal Australian College of General Practitioners president Nicole Higgins called on state governments to act.

“This is the latest nail in the coffin threatening patient access to general practice care,” she said.

“We have been keenly awaiting this appeal, and the decision is just more bad news for hardworking GPs and practice teams.”

She warned practices ­already paid payroll tax on staff, including nurses and administrative workers, but it was untenable to extend this to tenant GPs.

“Unless governments act to exempt practices from this new obligation, patients will be charged more and some clinics will be forced to shut,” she said.

“The entire health system will suffer for years to come, particularly in rural and ­remote areas.”

AMA (NSW) President Dr Michael Bonning said the ruling would “pave the way” for an increase in audit activities.

In January, a survey of more than 1000 GPs found only 3 per cent of practices could absorb the tax, while 78 per cent said they would be forced to raise fees.

In response to media pressure, earlier this year the Queensland government backed down on its plan to hit GP practices with retrospective payroll tax bills and agreed to wait until 2025.

A NSW government spokesman said it had made “no change” to payroll tax ­arrangements in regard to GPs and other medical practices.

“We continue to work with all relevant stakeholders … on the pathway forward,” he said.

NSW Labor health spokesman Ryan Park said: “If elected, one of the first things we will do is consult with doctors”.

A spokeswoman for federal Health Minister Mark Butler said payroll tax issues were a matter for state governments, but he was committed to making it easier to see a doctor.

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