AMA President takes payroll tax fight to NSW Treasurer’s doorstep

AMA President Professor Steve Robson said the state government has an opportunity to show leadership to other jurisdictions and demonstrate its support of general practice.

“General practices in the treasurer’s own electorate are saying increasing the payroll tax burden on general practice will negatively affect their ability to provide care to patients,” Professor Robson said.

“Some practices will be forced to increase gap payments to patients; others will stop bulk billing altogether and some practices will be forced to shut their doors.

“Ahead of the last National Cabinet meeting, the NSW Government was vocal on the Commonwealth’s obligation to support primary care. The state now has the opportunity to play its part in protecting practices from financial instability and ensure patient access to affordable care.”

Practice owner of Hornsby Whitehouse Medical Centre, Dr Aziz Iboyan, said many general practices went above and beyond during the pandemic to keep patients safe and participate in the vaccination rollout.

“We bore the cost of making changes to our practices to be COVID-safe out of a sense of duty to our patients and a desire to keep our communities healthy. And now the reward for our sacrifices is the prospect of a massive additional payroll tax bill. It’s insulting and shows how little respect the state has for general practice,” Dr Iboyan said.

Professor Robson said general practices are already paying their fair share of payroll tax, but government is redefining the way it applies payroll tax to medical practices in a “deliberate and greedy cash grab”.

Payroll tax is a state-based tax on wages paid by employers to their employees. Most general practices use a tenancy and agency model where GPs engage practices to support them in delivering care to patients, but do not work for the practice.

The NSW Government now wants to change the rules and bring these GPs within the payroll tax net, even though they are not employees and contract with the practice that provides administrative and other services.

These arrangements need to be made exempt from payroll tax – consistent with longstanding practice.

AMA (NSW) President Dr Michael Bonning said regulatory bodies, professional and accreditation bodies, and governments have all encouraged general practitioners to move away from models of solo general practice to models where a number of general practitioners practice from the same location.

“For two decades, GPs have been told that this model will help them provide better care for patients as it gives patients an option of seeing another GP at their regular practice if their own GP be unavailable,” Dr Bonning said.

“Now the NSW Revenue office is redefining the rules and threatening general practices with hefty additional payroll tax liabilities.

“Their timing couldn’t be worse. Demand is higher than ever, patients are struggling to get appointments, and hospitals are being overrun as a result.

"The other sting in the tail is the impact this will have on the next generation of GPs. Many practices have indicated this extra tax burden will impact on their ability to support GP training. As a result, training placements will be harder to come by and make general practice a less attractive specialty for doctors.

“If the state was actively looking to cut primary care off at the knees – it’s found a perfect weapon in payroll tax,” Dr Bonning said.

The Queensland Revenue Office recently offered a payroll tax amnesty to general practices until 30 June 2025. However, Dr Bonning said its doesn’t go far enough in safeguarding the financial viability of general practice.

“An amnesty without an exemption is no protection at all,” Dr Bonning said.