No winner in Victoria’s treatment of GPs

Victoria is the last state to hold its ground on payroll tax for GPs, and it could cost the state $715 million in additional emergency patients

Victoria could be set to lose $715m and see 800,000 extra emergency patients if it goes ahead with a general practice payroll tax, according to a GPs federation.

The extra tax comes after a 2023 ruling that independent GP contractors, known as tenant GPs, were no longer considered exempt from payroll taxation.

Where most states offered an amnesty on back-taxes, Victorian practices faced retrospective taxes, with the Royal Australian College of General Practitioners reporting bills for clinics as high as $800,000.

“This payroll tax is simply fiscally destructive,” Primary Care Business Council spokesman and Eastbrooke Medical Centre director Andrew de Picot said.

“The knock-on effects to the healthcare system in Victoria will be disastrous. The basic failure (the state government) doesn’t understand is the introduction of payroll tax is basically going to kill off bulk-billing.

Primary Care Business Council spokesperson and Eastbrooke Medical Centre director Andrew de Picot said payroll taxes would be disastrous for Australian GPs.

“We are facing a situation where doctors close their doors or hike fees, hundreds of thousands of patients end up in emergency rooms and the Australian taxpayers are left with the bill. There are no winners.

“We are asking for engagement from the Treasurer (Tim Pallas) – to date it’s been pretty much non-existent, and it’s been very disappointing.”

The PCBC is an advocacy group formed from a collection of national GP providers: My Health, Eastbrooke, Medical­One and ForHealth.

NSW Premier Chris Minns has flagged the threat the tax presents to primary care practitioners, but has not outlined whether his government will abolish it.

A survey from online booking service HotDoc found 4 per cent of patients would rather attend an emergency room than pay more to see a GP.

HotDoc and the PCBC estimated that Victoria sees 20,000,000 general consultations a year, while NSW has 25,354,000. With a 4 per cent spill of primary care patients on to emergency, that sends 800,000 Victorians and 1,014,000 NSW patients presenting to emergency if the tax interpretation were to be applied.

This leaves the respective $100m and $128m in payroll tax revenue for the state governments overshadowed annually by $522m and $690m in ­additional emergency costs.

The health body estimated that when the tax gains were counted against ED presentations and hospitalisations, the Victorian government was set to lose $715m, while NSW would be down $932m.

The prior GP exemption came under a 2010 Harmonisation Joint Protocol for payroll tax that ensured a universal application across Australia. Without the protocol, the various state governments have split in their approach to the fee.

The Australian Healthcare Index says 42 per cent of people have begun to see a GP less because of out-of-pocket costs.