Medical bodies say people will pay more to see their general practitioner and clinics could be forced to close if Victoria expands payroll tax to doctors.
The organisations are demanding an urgent meeting with Premier Daniel Andrews to discuss the issue.
Andrews on Wednesday renewed his calls for boosted Medicare rebates to bulk-billing doctors to ease pressure on emergency departments, and, with NSW Premier Dominic Perrottet, will push for wholesale reform to the “broken” system at a national cabinet meeting this week.
Premier Daniel Andrews in December.Credit:Scott McNaughton
“It’s never been harder to find a bulk-billing doctor,” Andrews said. “We’ve got to pay our GPs more.”
But the Royal Australian College of General Practitioners (RACGP), the Victorian branch of the Australian Medical Association and the Australian GP Alliance cautioned that the possible expansion of payroll tax to GPs would add to the crisis.
Dr Anita Munoz, the Victorian chair of the RACGP, said GPs should be exempt from payroll tax because they worked at clinics as contractors rather than direct employees and did not have entitlements such as annual leave.
But she said the State Revenue Office (SRO) had reviewed some clinics and determined “several” GPs should be treated as employees and that payroll tax should apply.
Anita Munoz, a Melbourne GP and the Victorian chair of the Royal Australian College of General Practitioners.
Munoz fears several could become many after similar decisions in NSW and Queensland.
If that played out, Munoz said patients would end up paying 15 per cent more for an appointment and clinics would struggle to stay open. Ultimately, she warned, fewer Victorians would visit their doctor and more people would flood emergency departments with deteriorating health.
“It certainly means bulk-billing would become a thing of the past,” she said. “We’re really on the precipice of seeing clinics just close.”
The wages that a business pays to employees are assessable for payroll tax, which is 4.85 per cent on Melbourne businesses, but amounts paid to contractors may be exempt if they meet certain conditions.
Munoz said the tax already applied to reception and nursing staff. GP clinics are exempt from GST.
A spokesperson for the Victorian government said there had been no change to the law or the application of payroll tax for GPs or medical centres.
“Payroll tax is assessed in the same way across industries and professions,” they said.
The SRO, assesses payroll tax on a case-by-case basis, declined to comment.
The medical bodies have demanded an urgent meeting with Andrews, Treasurer Tim Pallas and Health Minister Mary-Anne Thomas in a letter last week to “discuss the now profoundly substantial use of payroll tax on medical practices”.
They were yet to receive a response on Wednesday, but Munoz said the Victorian government had a promising vision for reform and the RACGP had a fruitful relationship with them.
Throughout COVID-19, the Victorian government has repeatedly said that patients arriving at emergency departments could have avoided a trip to the hospital if they saw a GP sooner.
It costs Victorian taxpayers about $500 for every emergency department presentation.
“If you finish up in hospital because primary care didn’t work, it costs more,” Andrews said on Wednesday. “We need to make Medicare work, we’ve got to get those bulk-billing rates up, we’ve got to make sure those emergency departments are for emergencies.”
The state is pressing federal Labor to fund public hospitals 50:50, which was temporarily put in place during the pandemic but reverted to 45:55 at the end of last year.
Andrews said the Commonwealth was paying “45 per cent of the price of failure”.
Munoz said the cost of healthcare would increase if more GPs were forced to close or the cost of an appointment rose.
The Andrews government has funded new priority primary care centres, in a joint trial with NSW, to address the lack of bulk-billing GPs.
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