Could there be a great payroll tax migration?

5 minute read

‘Opportunism and ‘revenue seeking’ from the ACT government and uncertainty in Victoria has left some GPs considering interstate moves.

GPs are considering moving interstate for payroll tax relief, amid a lack of engagement from the Victoria government over payroll tax concessions and dissatisfaction with ACT’s proposed exceptions. 

According to a recent poll run by newsGP, over 35% of the 1100 respondents would consider moving interstate to skirt harsher payroll tax requirements. 

This follows a survey by the AMA of ACT practices which found nearly half would consider selling and a quarter would consider closing if required to pay payroll tax on GP income.  

Speaking to The Medical Republic, AMA Victoria president Dr Jill Tomlinson agreed that tax on income “does provide an incentive for a stronger primary health care system and greater numbers of general practitioners in those states that are being more responsive to the needs of general practice”. 

Although “the issue is more complex than a single poll”, the uncertainty is a major challenge for general practice owners and bodies providing advice and advocacy, added AMA NSW president Dr Michael Bonning. 

“[In general practice] you don’t build a business, you build a community of practice and a reputation in a community for providing good care,” he told TMR

“And that is something that most clinicians would not want to step away from, if at all possible.” 

In a move that will likely garner it favour over its counterparts amongst health professions, WA is the only state to rule out imposing payroll tax on GP income.  

While NSW, Queensland, SA and the ACT have announced amnesties or a pause for payroll taxes imposed on medical practices, confusion and dissatisfaction remain over who will be affected and how significant the effects will be in some states.  

The Victorian government has not announced any payroll tax relief for medical practices, despite calls for urgent intervention from the RACGP and other advocates. 

“At this stage, there is no indication that the Victorian government and treasury is willing to move,” Dr Tomlinson told TMR

“The Treasurer and Health Minister have indicated that there’s been no change in how the tax is applied. But evidently, that is not the case based on the fact that Victorian general practices are now receiving retrospective tax bills from the state revenue office for hundreds of thousands of dollars,” she said. 

The President of the AMA Victoria expressed concerns about the uncertainty and said the association would “continue to call on government to recognise that this new tax is increasing the cost of health care and making the cost of seeing a GP increasingly unaffordable for many Victorians”. 

Dr Bonning said the 12-month pause on audits offered by the NSW government was a buffer that Victorian counterparts have not been afforded. 

While the pause is not a reprieve, “it is certainly an opportunity to approach advocacy with evidence and with expert advice,” said Dr Bonning. 


To probe practice owners about exactly what they expected the fallout from payroll tax might be, the AMA ACT surveyed 92 practices in Canberra on the possible repercussions. Almost half of the practices reported they would consider selling their practice, while almost a quarter said they would consider closing up shop entirely if required to pay the tax. 

Although the tax-free threshold remains high in the ACT – the tax will only be places on wages above the $2 million threshold, while in most jurisdictions it’s nearer $1 million – concessions proposed by last month by Chief Minister Andrew Barr were dubbed “deeply flawed” by the AMA ACT President Professor Walter Abhayaratna. 

Given that only an estimated 6% of practices could reach the bulk-billing requirements to be exempt (65%), the RACGP and AMA have called on the leadership to return to the negotiating table. 

According to the AMA ACT’s survey, 80% of participants thought that GP registrar training would suffer at the hands of the tax. Around 65% believed medical student training would be affected.  

Most practices, 80%, expected they would increase fees, unless exempt, with over a third saying they would impose a patient levy of $5 and a $10 private billing fee increase according to the AMA ACT. 

Dr Tomlinson agreed that estimates put the price increases for consults at $10, if not $20 due to payroll tax. 

“General practices certainly don’t wish to increase the hospital cost of health care, but if they want to keep the lights on the doors open, plus pay a new tax, and they really have no other choice,” she told TMR

In response to the outcry from lobby groups, Mr Barr labelled the concerns “wild accusations” and suggested that the government’s revenue would remain “minimal” as only a “handful” of practices would be affected. 

Mr Barr told the Legislative Assembly that GPs “lacked ambition” about bulk billing, stating that “at no point have any [lobbyists] come in and said that they would never increase their fees again if GPs were given a payroll tax exemption in the future”. 

Speaking on the commentary amongst the medical community around Mr Barr’s “cheap” claims, Dr Bonning told TMR that “the actions of the chief minister in the ACT smack of opportunism”. 

“There has been a funding commitment from the Commonwealth governments to try and bolster bulk billing rates and yet, at the same time, you’ve got a state government who is actively revenue seeking.” 

He said that tinkering with the funding of clinical practice will ultimately trickle down to patient care. 

“Trying to force the hand of independent clinicians – it smacks of also not understanding the nature and the role and how general practice works.” 

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