‘Flawed’: Payroll tax ruling could kill off bulk-billing says Dr Nick Coatsworth

One of Australia’s leading medical practitioners has lashed a ruling that would see most independent GPs subject to payroll tax.

Carla Mascarenhas

2 min read

August 18, 2023 - 6:46PM

Government taking a ‘range of measures’ to curb cost of living crisis: Albanese

One of Australia’s leading medical practitioners has lashed a ruling that would see independent GPs working in medical centres in NSW and Victoria subject to payroll tax.

This month, the Victorian and NSW state revenue officers confirmed the change.

General practices already pay the tax for their employees, which includes receptionists, nurses and GPs in training.

However, independent GPs who work in medical centres are not made to pay the tax because they are not classified as employees, as they generally lease out rooms from practice owners and have independent agreements.

Dr Nick Coatsworth, an infectious disease physician and an ambassador for the Australian Patients Association, told news.com.au it was going to “increase the cost of seeing a GP by around 5.5 per cent”.

Dr Nick Coatsworth. Picture: AAP

“In an environment where it is already costly to see a GP, it is just going to increase the cost,” he said.

Dr Coatsworth described it as an “unbelievably flawed policy” before labelling it the “most blatant example of health cost shifting” he had seen in his career, which would undermine the federal government’s plan to resuscitate Medicare.

The 2023 federal budget included a $3.5 billion health sweetener, which tripled the fees doctors receive for Medicare bulk billing.

Dr Coatsworth said the change, backdated to 2018, has resulted in some medical practices being charged $500,000 to $800,000 for payroll tax.

“It is just crazy,” he said.

“All that talk that we want to save Medicare, we want universal Medicare, we want thriving general practice, and then the two biggest states do this.”

’Crazy’: Dr Coatsworth has lashed the changes to payroll tax for GPs.

Dr Coatsworth’s criticisms come off the back of similar concerns from the Royal Australian College of GPs (RACGP), Australian Medical Association Victoria (AMA Victoria) and the Australian GP Alliance (AGPA).

“We are writing today to seek your urgent intervention,” a joint letter reads to Victorian premier Dan Andrews.

“We have recently become aware of several Victorian general practices who are currently at risk of closure due to the application of this tax.

“General practices will close due to new interpretation of the legislation.

“The shrinking general practice sector will create a significant burden on the already stretched Victorian healthcare system.”

The letter warned that consequences for the state’s health system will be increased and that there will be a disruption to service access and delivery.

“This would be a complete disaster for Victoria. Increasing costs to see a GP affects people on low incomes the most and puts pressure on the states’ already overburdened hospitals,” it said

Bulk-billing crisis

The changes to the payroll tax will place further pressure on struggling medical practices.

Earlier this year, a report exposed Australia’s Medicare crisis, finding that only 42.7 per cent of general practices offer bulk billing services with no additional fees.

Victorian Premier Dan Andrews. Picture: Jason Edwards

Over 50 per cent of general practices across the country charge patients out-of-pocket fees, with Aussies paying a minimum of $40 per visit, according to healthcare directory CleanBill.

The Australian Capital Territory is worst off, with only five per cent of GPs offering bulk billing services.

ACT patients also pay the most for a standard 15-minute doctor’s visit at $49 – in addition to the $39.75 Medicare rebate that’s paid to the clinic.

Despite only 27 per cent of clinics in Adelaide offering bulk-billing, the state provides patients with the most affordable price of $34 per doctor’s visit.