NSW Libs urge payroll tax action

4 minute read

The state opposition is calling on Labor to move faster on payroll tax reforms for GPs, as budget night looms. 

NSW opposition leaders have bemoaned the state government’s “dithering” on payroll tax in the face of progress in SA and Victoria. 

Despite word from the RACGP that there had been a breakthrough in negotiations with NSW Labor in late May, no official update has been released yet.  

Some sort of concession is coming, but it’s not clear what it will be.  

An announcement is expected within the month – if not this week, potentially with the state budget on Tuesday 18 June.  

Practices still have three months of amnesty left, during which time there is a stay on payroll tax audits on medical centres and a pause on interest and penalty tax on outstanding payroll tax bills.  

NSW is an outlier in this regard, as the only jurisdiction where the government has signalled an interest in pursuing payroll tax on GP clinics but has not agreed to a no-retrospectivity clause.  

This leaves practices in the state vulnerable to tax bills that go back up to five years.  

Speaking outside a Darlinghurst GP practice today, opposition leader Mark Speakman urged NSW Labor to not only wipe retrospectivity but also extend the amnesty by another year.  

“Instead of working with GPs to solve this problem, the government is rubbing its hands hoping to find more revenue,” Mr Speakman said.  

“Victoria and Queensland have Labor governments, and Victoria and Queensland have dealt with the problem – so why hasn’t New South Wales?”  

He said the current government had “fumbled the finances” and would likely be looking to increase revenue in the upcoming budget.  

“There needs to be a proper exemption – we’re saying there should be an amnesty until June 2025 so that GPs can look at any possible restructuring,” said Mr Speakman.  

“But if it looks like the transaction or the administration costs of any restructuring is so great that there will still be an extra cost on patients, the government needs to be looking at an appropriate exemption going forward.” 

Mr Speakman was also questioned on why the previous Liberal government – which held office from 2011 to 2023 – had not done anything to prevent the issue in the first place. 

“[The case law] was only resolved by the Court of Appeals in March 2023, so really it’s only been a clear issue since the cusp of the last election,” he said.  

“But what we’ve seen now is, as a result of this Court of Appeals decision, the government … have bungled the finances so badly that they now want to impose a tax on sick patients.” 

While technically true, Queensland’s state revenue office had already put out a public ruling and announced an amnesty by that time. Queensland’s treasurer had even reportedly been in contact with his NSW counterpart about GPs and payroll tax amnesty in early March 2023.  

Ochre Health co-founder Dr Hamish Meldrum said general practices do not have the ability to absorb payroll tax and were particularly concerned about the prospect of receiving a retrospective tax bill.  

“We’ve surveyed patients and 4% said that if [GP] fees were to increase, they would prefer to present to emergency departments,” he said. 

“That … means a million patients extra in our emergency departments – that’s an enormous burden and enormous cost.  

“The [revenue generated by] payroll tax will not actually offset that cost.”  

Dr Meldrum said it was not too late for the NSW government to follow the lead of Tasmania, the Northern Territory and Western Australia by electing to effectively ignore payroll tax for general practices.  

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