Medical Associations Call on Andrews Government to Abandon New Payroll Tax

The Victorian Labor government is facing criticism for implementing a new payroll tax on GPs, with doctors’ groups warning that this could result in higher fees for patients and the closure of medical clinics. The backlash comes after the State Revenue Office (SRO) ruled on August 11 that medical clinics in Victoria would be subject to a backdated payroll tax. In response to receiving an $800,000 bill, one clinic owner in Victoria has stated that they have no choice but to shut down two clinics. The Royal Australian College of GPs (RACGP), the Australian Medical Association Victoria (AMA Victoria), and the Australian GP Alliance (AGPA) issued a joint statement expressing concern over the potential closure of more than half of the medical centers in Victoria if an exemption is not granted. Previously, GPs were not subject to payroll tax as they are independent contractors who lease rooms from practice owners. Critics argue that the new tax will have negative consequences including increased patient fees, a reduction in bulk billing clinics, and added pressure on hospitals and emergency health services. Shadow Health Minister Georgie Crozier criticized the tax, describing it as a desperate attempt by a cash-strapped government that will harm Victoria’s health system. The RACGP Victoria Chair, Dr. Anita Munoz, has called on Premier Daniel Andrews to intervene, warning that if action is not taken swiftly, more practices will be forced to close or raise fees, leading to a greater strain on hospitals. This development comes after the Victorian government announced that it would not provide any payroll tax relief for businesses in the next financial year. Similarly, the New South Wales (NSW) state government introduced a similar tax ruling but has paused payroll tax audits for 12 months. Meanwhile, South Australia and Queensland have announced amnesties for GP clinics. A recent poll conducted by newsGP found that only 3 percent of general practices across Australia can absorb the costs associated with the new payroll tax if GPs are considered employees. In contrast, 78 percent would be forced to raise patient fees. RACGP President Dr. Nicole Higgins criticized state governments for diverting funding from general practice to boost their own tax revenues, asserting that the patients would suffer the most by losing access to local GPs and essential care. Dr. Higgins revealed that her practice in Mackay, Queensland would have to increase fees and end bulk billing to cover the new tax obligations.



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