The imposition of payroll tax on medical professional fees is in reality a tax on Practice revenues.

In 2020 a case in the Victorian Court of Appeal confirmed the right for the Victorian State Revenue Office to charge payroll tax on payments made to medical professionals. The payroll tax appears to be payable regardless of the status of the medical professional being an independent contractor or an employee.

Since that precedent both NSW and Queensland have also been imposing payroll tax on General Practices apparently where they consider that the behavior of the Practice is more akin to an employer […]

GP practice owners are a bit like ducks, says Dr Jared Dart,  a GP Practice Owner and director of the Australian General Practice Alliance (AGPA) in an interview with Francis Wilkins of Medical Republic.

“They look like they’re floating, but under the surface they’re paddling fiercely,” he said in the interview . “And the biggest problem is practice principals have nowhere to go. A GP can retrain or go on sick leave, but principals only have one option: to sell, and unfortunately, many are doing just that.”

Inflation is now one of the toughest challenges facing owners. “Medical inflation over the past two years has been particularly high,” says Dr Dart. “Our costs are at least 10% higher in our practice, and that’s across the board – from electricity, wages and consumables to cleaning and rent.”

“Add into the mix things like payroll tax, which could bankrupt a practice principal, and you can understand why the stress is significant.”

The full article and podcast are available here

General Practice is on the edge of a cliff and has been put there by the actions of Successive Governments.

There are three key components to a high quality primary healthcare system

• Professionals- Sufficient well trained and appropriately remunerated staff including GPs, Nurses, Allied Health Professionals and  Administration staff,
• Practices – High quality infrastructure provided by GP Practices with up to date standards and facilities, and
• Patient Access- Ease of patient access which is impacted by  cost of access,  timeliness of access, and the transportability of access (competition between GP Practices)

Most GPs work in Principal led (GP Owned) Practices, small businesses that are the backbone of Australia’s primary health care system.  These General Practice businesses are under extreme pressure.  The Australian GP Alliance (AGPA ) is the representative body for GP owned practices which account for over 2/3 of General Practices (ref HON 2022).

We call on the Federal Health Minister to act in this time of crisis to for Primary Health Care in Australia.

Read more