Bulk-billing relief as treasurer ends stand-off with doctors

Local GPs will have an incentive to bulk-bill most patients after the NSW government struck a deal to end a six-year stand-off with peak doctor bodies over payroll tax.

In Treasurer Daniel Mookhey’s second state budget, the NSW Labor government revealed it would waive GP debts totalling $104 million and introduce a full rebate for practices that bulk-bill at least 70 per cent of appointments.

NSW Treasurer Daniel Mookhey and NSW Finance Minister Courtney Houssos during the state budget press conference on Tuesday.Credit: Dominic Lorrimer

“This is an important cost-of-living measure … it’s also designed to reduce pressure on emergency departments,” Finance Minister Courtney Houssos said.

It is a rare intervention by a state government in primary healthcare policy, which is usually the responsibility of the federal government through Medicare.

The NSW and Victorian state revenue offices published rulings last year that confirmed for the first time that many independent GPs working in medical centres would be subject to payroll tax.

Doctors had warned that some practices would be forced to hike prices by $20 per appointment and others would have to close if they were required to pay huge retrospective bills on GPs previously considered contractors and exempt from the tax.

The Royal Australian College of General Practitioners (RACGP) and the Australian Medical Association (AMA) have been lobbying states to waive huge tax bills sent to GPs and provide certainty to clinics facing elevated costs.

RACGP NSW chair Dr Rebekah Hoffman said the tax cloud hanging over GPs would have had a devastating impact on practices, patients and the state’s health system.

“This gives GPs across NSW certainty that they can continue to operate and keep their doors open for patients, without fear of being hit with a huge tax bill that will shut them down,” she said. “The tax arrangements going forward will reduce future liabilities and will go a long way to ensuring NSW practices remain viable and open for patients, and those that are bulk-billing may continue.”

Dr Michael Bonning from AMA NSW said the Minns government was the first to guarantee practices wouldn’t have to stump up thousands for retrospective debts, but many would continue to struggle “with decades of underfunding from the previous Commonwealth government”.

The measure will cost the government $188.8 million over the next four years, which includes revenues forgone and $8 million in implementation costs.

Practices in Sydney must bulk-bill 80 per cent of appointments to receive the rebate, and the threshold for the rest of the state is 70 per cent.

It is unclear how many GPs will meet the threshold to receive the rebate but Houssos said the benchmark was chosen because it is “broadly reflective of where bulk-billing sits today”.

In affluent areas of Sydney, such as the federal electorates of Wentworth and Cook, the proportion of clinics that bulk-bill is as low as 5 per cent. In the Central Coast seat of Dobell, only one clinic bulk-bills patients.

Bulk-billing is most common in the federal electorates of Blaxland and Parramatta, where more than 90 per cent of appointments are covered fully by Medicare.

Mookhey and Health Minister Ryan Park hope easing the upward pressure on the cost of visiting a GP will take pressure off the state’s emergency departments. NSW Health modelling suggests that every 1 per cent decline in the bulk-billing rate results in an additional 3000 people visiting emergency departments.

The government will pump $481 million into relieving pressure on emergency departments over the next four years, including $100 million towards establishing urgent care clinics as an alternative to waiting hours to be treated at a hospital.

Mookhey said the measures would “reduce wait times and improve patient outcomes”.

Port Macquarie Hospital will receive a $261 million upgrade, while the government will spend $200 million building affordable accommodation for essential health workers.

“We’re going to continue to pump money into NSW regional and rural hospitals because we think they’re as deserving as other Australians,” Mookhey said.

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