Doctor’s slam states for imposing ‘tax on Medicare’

The nation’s peak medical groups have accused state and territory governments of implementing a ‘tax on Medicare’ by refusing to rule out a new payroll tax for general practitioners.

The nation’s peak medical groups have accused state and territory governments of implementing a “tax on Medicare” by refusing to rule out a new payroll tax for general practitioners, which undermines the federal government’s Medicare reforms.

Australian Medical Association president Steve Robson said it was “disappointing” the Victorian, NSW and ACT governments were yet to say if they would exempt GPs from the payroll tax, which could force already strained clinics to shut their doors.

A court ruling that GPs – who typically rent consultation rooms in a clinic under a contract arrangement – were actually employees and thus subject to payroll tax prompted warnings from the AMA and Royal Australian College of General Practitioners that the additional cost could scupper access to treatment.

State revenue offices can also choose to impose the tax retrospectively, with some clinics reportedly being charged hundreds of thousands of dollars.

“The commonwealth government has put together a package to increase funding for patients and GP consultations,” Dr Robson said. “Having … state or territory governments plotting to take it back through payroll tax is an outrage. I’m disappointed that any government anywhere is making affordability and access to healthcare worse.”

RACGP president Nicole Higgins warned that if GP clinics aren’t exempt from the payroll tax it will undercut efforts by the Albanese government to increase access to medicine and bulk billing. Dr Higgins said the college knew of one NSW clinic hit this week with a $450,000 tax bill that had to be paid in 21 days.

“The federal government‘s Medicare reforms will be completely undermined by state payroll tax,” she said. “So this is a grab by the states for federal funds, as a GP payroll tax will have to be passed on to our patients … this is a tax on Medicare.

“It’s Victoria and NSW who … are going to completely undermine our federal reforms, such as the tripling of the bulk-billing incentive. So for our vulnerable patients, this is going to have a huge impact.”

The Victorian government said “payroll tax is assessed in the same way across industries and professions, there has been no change … in relation to GPs or medical centres”.

The NSW government was contacted for comment.