State misses ‘golden chance’ to act on GP payroll tax

4 minute read

Peak groups say Victoria can expect fees to rise by 30% and its hospital system to be put under even more pressure.

Victorian GPs have been allotted $10 million in the form of a co-designed grant program to “support provision of primary healthcare by GPs”, but peak groups have dismissed the state’s budget handout as a “Band-Aid”. 

The RACGP, Primary Care Business Council and Australian GP Alliance said today that while the program was a “welcome recognition of the devastating impact of the state’s Patient Tax” – i.e. payroll tax – it wouldn’t help Victorians with the cost of living or save general practice.  

The groups warn that persisting with the threat of payroll tax audits for GP income will force fees up by 30%, pushing some patients into already crowded hospitals and costing the state more.  

The three bodies are demanding, in their words:  

  • no retrospective collection of payroll tax liabilities, which will cause practice bankruptcies and closures  
  • Victoria to follow Queensland and provide a new tax ruling, clarifying that patients’ fees paid directly to a GP for their services won’t be subject to payroll tax  
  • a compliance period to allow practices to adjust to the new ruling so they don’t have to pass the tax on 

“It’s like putting a bandaid on a patient who’s lost both their legs,” said RACGP Victoria Chair Dr Anita Muñoz. 

“The Government knows practices can’t afford the state’s extra payroll tax, and neither can their patients.” 

PCBC president Dr Ged Foley said: “This was a golden chance for the Victorian government to send a message to the community that they were doing all they can to address cost of living pressures – instead they’ve ensured going to the doctor will get more expensive, if you can find a local GP with the doors still open. 

“Victorians should be prepared for further crowding at hospitals and local GPs to be at breaking point.”  

The state budget, delivered by Treasurer Tim Pallas, also withheld money for five new community hospitals promised in 2018, and delayed the rollout of 60 mental health and wellbeing centres that were promised by the end of 2026. 

Mr Pallas described the health budget measures as “the biggest investment in our healthcare system, ever”. 

“It includes an unprecedented multi-year investment of more than $11 billion for services to meet the future health needs of Victorians, including more than $8.8 billion in operating funding for hospitals.  

“This is the biggest single investment in our hospital system in the state’s history.”  

Specific measures included $900 million to upgrade Melbourne’s Austin Hospital emergency department and a new ED and more beds for the Northern Hospital.  

Monash Medical Centre will get an almost $500 million expansion, including more maternity care, operating suites and intensive care beds. 

Ambulance Victoria will get $146 million to “support ambulance capacity”. 

The slowdown in the mental health rollout was about giving the government “the time to ensure we have the people and skills we need”. 

“That gives us the opportunity to train and recruit the required workforce – and it also makes sure we’re learning from the rollout of the first two stages,” said Mr Pallas. 

The budget contains $16 million to “skill up more mental health professionals for the future”. 

According to the budget papers, hospital funding will rise from $1.497 billion in 2023-24 to almost $1.838 billion in 2024-25 and almost $1.837 billion in 2025-26. 

Safer digital healthcare gets $19.8 million for “investing in ICT staff and security software, reducing the vulnerability of hospitals to disruption and the likelihood patient data will be compromised”. 

Health workforce capacity will be invested to the tune of $55.2 million through Registered Undergraduate Student of Nursing or Midwifery positions, nurse practitioner development, and the transition to practice support and capability development resources for nurses and midwives in regional Victoria. 

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