Pesutto announces pledge to scrap ‘health tax’ currently forcing GP closures and hiking fees

Opposition Leader John Pesutto has pledged to abolish a “regressive health tax” piling pressure on Victorian GPs if the Libs wins the next election.

Opposition Leader John Pesutto says he will scrap payroll tax being applied to GPs if he wins government in 2026.

In a post-budget lunch on Friday Mr Pesutto said the Opposition would first try to move a Bill through parliament to kill the tax as soon as possible.

Medical professionals have flagged legal action challenging the tax, and have warned they will be forced to either shut their doors or hike patient fees to cover it.

General practices already pay payroll tax on employees, including receptionists, nurses and training doctors.

But it hasn’t previously applied to GPs because medical practitioners were previously considered as contractors, rather than employees, meaning they were able to avoid the tax bill.

“Labor’s Health Tax is the result of a decade of financial mismanagement in Victoria under

Payroll tax charges are forcing practices closures and a rise in out-of-pocket fees. Picture: Jason Edwards

Labor governments, with record debt, record taxes, and cruel cuts to services,” he said.

“A government I lead will make it cheaper to go to the GP and protect bulk billing by scrapping Labor’s Health Tax.”

It is unclear what impact abolishing the tax would have on the state’s bottom line, but Tim Pallas has previously said it applies to a small number of the state’s medical clinics.

“We have called on the government to release those costings, and they haven’t done that,” Mr Pesutto said.

“So it’s very difficult to ascertain from the budget papers themselves, what this change will mean.”

Former premier Denis Napthine, Kennett-era treasurer Alan Stockdale, Victorian Chamber of Commerce and Industry chief Paul Guerra and a host of state MPs were at the Enterprise Victoria lunch.

The event was MCed by Ann Peacock who told Mr Pesutto “we look forward to having you as our next leader, you are the man to lead Victoria out of this terrible debt crisis.”

Both Mr Pesutto and shadow treasurer Brad Rowswell addressed the crowd before taking questions from the audience alongside shadow finance minister Jess Wilson.

On the payroll tax affecting GPs Mr Pesutto said it would “drive clinics out of business” and “make it harder, particularly for those facing disadvantage, to access the doctor in a timely way.”

Opposition Leader John Pesutto says the Libs will abolish an ‘unfair health tax’ on GPs if elected to government in 2026. Picture: Getty Images

Quizzed on debt, neither Mr Pesutto or Mr Rowswell were able to detail precise plans for how they would reverse the current trajectory that is set to see the state’s net debt hit $187.8bn by 2027-28.

But they said addressing major project blowouts and the government’s ballooning wages bill would be key.

Mr Pesutto again committed to cancelling the controversial Suburban Rail Loop, pending existing contracts, if elected to government in a bid to drive down debt.

Federal Labor Health Minister Mark Butler has repeatedly raised concerns about the tax hit on doctors.

But the Allan government has insisted that there has been no changes to the way payroll tax was assessed or enforced across the health sector.

Opposition health spokeswoman Georgie Crozier said the tax will hurt patients who can least afford it.

“It’s time that Premier Jacinta Allan listened to GPs, health experts and her federal and interstate Labor colleagues and scrapped this insidious and unfair Health Tax,” she said.