Warning to Allan government that historic investments into Medicare will be lost

Federal Health Minister Mark Butler has called on his Labor counterparts in Victoria to review the controversial payroll tax on GPs.

Federal Health Minister Mark Butler has urged Victoria to ­review its controversial payroll tax, revealing he’s deeply worried that investments in Medicare would be lost under the changes.

The concerns come after the Herald Sun revealed new data showing patients could face massive fee hikes of 30 per cent and hundreds of clinics could close if GPs are slugged under the state government’s planned cash grab.

Doctors, unlike employees such as receptionists, have not previously been subject to payroll tax because they lease rooms and work under independent agreements.

“Payroll tax is a matter for states but I am very worried that the historic investments we’ve put into Medicare, in response to calls from state governments, will be lost to increase payroll tax obligations by general practices,” Mr Butler said.

Federal Health Minister Mark Butler says the Allan government should review the payroll tax. Picture: Martin Ollman

“I’ll again urge the Victorian government to look very closely at that model and see whether we can get a level of national consistency around those arrangements that will allow us to focus on the strengthening Medicare reforms that we’ve put in place.”

The Queensland government last year resolved a similar dispute after clarifying that medical centres weren’t liable for payroll tax if patient fees and out of pocket expenses are paid ­directly to doctors.

Mr Butler said the peak body for GPs believed the Queensland model had given practices “confidence and stability”.

“I’ve strongly urged state treasurers, premiers, and health ministers to listen closely to general practice organisations like the College of GPs in their states about ways in which they can work through this,” he said.

But opposition health spokeswoman Senator Anne Ruston said the Prime Minister’s failure to address the issue of GP payroll tax at national cabinet demonstrated a complete lack of leadership on ­access to affordable and timely healthcare.

“If changes to state payroll taxes go ahead, this will only exacerbate the unaffordability of accessing primary care under Labor and eat away at any potential benefit provided by their bulk billing incentive measure,” Senator Ruston said.

Opposition health spokeswoman Anne Ruston criticised the Prime Minister for failing to address the issue of GP payroll tax at national cabinet. Picture: Martin Ollman

It comes as the Victorian Chamber of Commerce and Industry yesterday urged the Allan government to review its tax and rule out any new or increased costs on businesses ahead of the state budget.

Treasurer Tim Pallas has foreshadowed major spending cuts as part of the May 7 budget, and has not ruled out changes to the tax regime.

Parliamentary Budget Office data shows Victoria is officially the highest-taxed state, collecting an average of $5074 per person this year.

Among a suite of 44 policy recommendations, VCCI has called for an increase to the payroll tax-free threshold to $1.2 million and for the regional payroll tax to be axed.

Shadow treasurer Brad Rowswell the call for a halt on new taxes.

Shadow spokeswoman for industry Bridget Vallence, said the Coalition had committed to a comprehensive review of Victoria’s tax system.

Cost of your GP visit to jump 30 per cent

Victorian doctors will have to increase patient fees by a whopping 30 per cent to combat a state government “tax grab”, new figures show.

This would push the average out-of-pocket cost for a GP ­appointment from $40.10 to more than $52.

The Herald Sun can reveal new data that show hundreds of clinics could close unless the Allan government moves to end the payroll tax dispute.

Thousands of GPs face payroll tax charges for the first time following a ruling by the Victorian and NSW state revenue offices.

The Allan government is being urged to end the payroll tax dispute. Picture: Luis Enrique Ascui

General practices are ­already liable for payroll tax on employees such as receptionists, nurses and training doctors.

But it hasn’t previously ­applied to GPs because most are not employees – they lease rooms and work under independent agreements.

But data from Australia’s biggest patient engagement provider, HotDoc, reveals 95 per cent of clinics plan to ­increase fees in response.

A survey of more than 300 clinics found another 16.5 per cent could be forced to close.

Treasurer Tim Pallas has pledged to use extraordinary powers to wipe fees if the payroll tax extension pushes clinics to the brink of closure.

This would mean the government could be called on to bail out about 256 of the state’s 1553 clinics.

A further poll of 1018 Victorians found more than a quarter of patients would limit their visits to doctors if consultation fees increased.

Seven per cent would opt out of seeing a doctor of other healthcare professional.

Doctors have for months been calling for a full payroll tax exemption for independent practitioners as well as a halt on retrospective tax collection.

HotDoc founder Ben Hurst said the company, which had a greater reach than tech giants Netflix and Uber, planned to join the payroll tax fight.

Thousands of GPs face payroll tax charges for the first time Picture: iStock

More than 6000 GPs used the platform in Victoria over the past two years to book 17 million appointments.

“This tax isn’t just a tax on GPs, it’s a tax on patients,” Mr Hurst said.

“The Allan government’s decision to whack GPs with this tax means patients will be forced to pay more to see a doctor, there will be fewer available appointments and more Victorians will end up in emergency departments.”

Royal Australian College of General Practitioners chairwoman Anita Munoz said the tax was “the biggest threat to affordable care in our state”.

A government spokeswoman said years of neglect by successive federal Coalition governments had broken the health system.

“There has been no change to the way payroll tax is ­assessed or enforced in any sector, including payments made by medical centres to GPs,” she said.

“We will continue to work constructively with GPs, and encourage any clinic with an issue about an ­assessment to talk to the State Revenue ­Office.”

In a notable shift from the government, Premier Jacinta Allan on Tuesday acknowledged that GPs clinics were under pressure but refused to roll back the tax.

The Allan government had previously denied there had been any changes to payroll tax for GP clinics.

“While payroll tax is assessed the same across all industries, I do want to acknowledge the GP’s are under particular pressures,” she said.

She, however, blamed “a decade of neglect” from former federal Coalition governments.

“We’ve stepped in and, for example, our priority primary care centres, our pharmacy, our pilot rollout of practical examples of why we can provide some support to our GPs and take pressure off the system,” she said.