Victorian doctors’ to launch new campaign against ‘draconian’ tax grab

Victorian doctors will this week start asking patients to support their calls for the government to scrap a “draconian” tax grab they warn will drive up consultation fees and decimate primary care.

The Allan government is facing an intensified campaign by Victorian GPs, who will now enlist patients to help lobby against a new “tax grab”.

Patients will be asked to sign a petition when they go to the doctors, as GPs begin plastering posters across their clinics as part of a new campaign to stop a “draconian” state government tax grab they warn will drive up patients’ out-of-pocket fees and decimate primary care.

An alliance of peak doctor groups – the Royal Australasian College of General Practitioners (RACGP), Australian GP Alliance (AGPA) and the Primary Care Business Council – are leading the campaign and have called on new Premier Jacinta Allan to step in and introduce a full payroll tax exemption on income from independent practitioners.

General practices already pay payroll tax on employees, including receptionists, nurses and training doctors, but it hasn’t applied to GPs because most doctors are not employees – they lease rooms from a practice owner and work under independent agreements.

Doctors have for months been sounding the alarm on an increase in retrospective tax audits, but the Victorian government has repeatedly insisted there is no change to the law and it has always been practice for the State Revenue Office to assess payroll tax on a case-by-case basis.

Premier Jacinta Allan is facing calls to scrap all retrospective tax collections for doctors. Picture: David Crosling

As well as calls for a full payroll tax exemption for independent doctors, the peak bodies have also demanded the Allan government scraps all retrospective tax collections and introduce a three-year assisted compliance period.

Several letters and requests to meet with former Premier Daniel Andrews about the tax “fell on deaf ears”, the groups claim.

The campaign will begin on Wednesday, with some of the posters reading: “The government is squeezing more tax from general practice. This tax grab means out-of-pocket fees will increase, and practices may have to close.”

Recent surveys by the RACGP found just three per cent of practices could absorb the costs, 78 per cent would have to raise fees – with more than half indicating this would be an increase of more than $20 per consult, while 35 per cent said they’d consider moving interstate.

Martin Sia, who owns eight SIA Medical clinics across Melbourne’s western and eastern suburbs, fears they will go bankrupt.

Dr Sia said the SRO asked for payroll tax details for every doctor that has independently practised in the clinics over the past 10 years, and sought information about how much they were paid and how often they worked.

“I think I’ll go bankrupt. We’re talking about several millions of dollars when you are talking retrospectively,” he said.

“You spend 30 years building up your clinics and this happens. That makes my business model not viable anymore. Clinics will have no choice but to oncharge these extra costs to the patients which will further put pressure on the cost of healthcare for the public.

“This is where the government needs to understand that it’s not about money, it’s about service and the care of patients.”

RACGP president Dr Nicole Higgins said the Victorian government is the only state to not provide a solution.

RACGP Victoria chair Anita Munoz said over 20 practices across the state had so far been targeted for retrospective tax collection.

Last month, the Queensland government announced a new revenue office ruling to clarify that patients fees paid directly to a GP wouldn’t be subject to payroll tax.

RACGP president Nicole Higgins said while the issue isn’t limited to Victoria, “the Victorian government is the only one that hasn’t come to the table with GPs to find a solution”.

RACGP Victoria chair Anita Munoz said over 20 practices across the state had so far been targeted for retrospective tax collection and warned “there will be many more to come”.

AGPA deputy chair Mukesh Haikerwal said: “This imposition is unjust, unfair, retrograde and draconian.”

PCBC chair Ged Foley said: “I urge Victoria to step back from the edge, and ensure general practices are not unfairly burdened by a payroll tax which could threaten their very existence.”

A government spokesman said the SRO provides hardship support for entities facing financial difficulties.

“Payroll tax is assessed in the same way across industries and professions – there has been no change to the law or the application of the tax in relation to GPs,” he said.