Payroll tax to eat up bulk billing incentives

3 minute read

It seems Queensland is the teacher’s pet where payroll tax is concerned.

The federal health minister has echoed RACGP fears that payroll tax may eat up recent investments into bulk billing incentives, encouraging states to prioritise national consistency and follow in Queensland’s footsteps.

The comments, made by Mark Butler at this morning’s Health of the Nation launch breakfast, follow an “urgent” letter penned by the RACGP to Prime Minster Anthony Albanese earlier this month over growing concerns of forced practice closures due to payroll tax bills.

In the letter, the college’s president Dr Nicole Higgins said federal Medicare investment was pointless if GP practices were closing.

She said that the “lack of harmonisation” from states was confusing and caused “financial distress” to practices, “threatening the ability of practices to make billing decisions in line with the government’s objective to increase bulk-billing rates”.

Mr Butler concurred at the breakfast that he was “very worried that the big investment that [the federal government] have put into Medicare, in part in response to calls from state governments, will be lost to increase payroll tax obligations by general practices”.

The health minister said that while he recognised that payroll tax was a matter for state governments, he had “strongly urged” states to heed the warnings of the RACGP and listen to GP representatives’ input on managing the minefield that is payroll tax.

“I’ve said to [state] health ministers to have a level of consistency is ideal,” he added.

Mr Butler looked to the Queensland model as a benchmark for the nation.

“The idea of an amnesty to readjust operations, confidence you’re not going to get hit with retrospective tax bills over periods where this was completely unknown to practices and some arrangements into the future that recognise the reality of the way in which general practice works, seems a very good package of solutions that the Queensland Government has come up with,” he said.

Earlier this year general practice owners in Queensland were provided the opportunity to apply for payroll tax amnesty, by registering with the revenue office, allowing them until the start of the 2025-26 financial year to get their ducks in a row and become payroll tax compliant.

In September, the state followed up with a public ruling outlining examples of the circumstances that may lead practices to be hit with a payroll tax bill.

Mr Butler encouraged other states to follow suit, heralding the Queensland’s approach as a model he felt “the sector can work with”.

“I’ll again urge other state governments to look very closely at [Queensland’s] model and see whether we can get a level of national consistency around those arrangements that will allow us really to focus on the strengthening Medicare reforms that that together we’ve been able to put in place,” he said.

Speaking to The Medical Republic, Dr Higgins said that it was “very heartening to hear” that Mr Butler was encouraging adoption of the Queensland model that provided amnesty and no retrospective application.

“We’ve been pushing to get a model that is based on the Queensland approach with an amnesty cash flow solution: a simple solution that can be dumped across the board,” medical business advisory expert at William Buck Paul Copeland told TMR.

When asked for comment on a moving towards a more cohesive national approach, more in line with Queensland’s model, the NSW government spokesperson pointed to the announcement of the 12-month pause on payroll tax audits and interest for GPs to “allow for additional consultation with the Royal Australian College of General Practitioners and the Australian Medical Association to finalise a long-term solution”.

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