Temporary tax reprieve for Queensland GPs

6 minute read

The AMA NSW has mobilised patients on payroll tax reform. Why didn’t it do this for Medicare rebates?

The Queensland government has agreed not to apply its recent payroll tax ruling until mid-2025, giving GPs 2.5 years to get their practice tax-compliant.

Premier Annastacia Palaszczuk only confirmed the grace period after Friday’s National Cabinet meeting, which brings together all state, territory, and national leaders.

“I’d also [like to] acknowledge the hard work of GPs in Queensland – they do extraordinary work and I know that they do great work right across the country,” she said.

While it’s a win for the sunshine state, it’s unclear yet whether Ms Palaszczuk was able to convince her interstate counterparts to follow suit at National Cabinet, where it is understood that she discussed the matter.

According to the Courier Mail, Queensland Treasurer Cameron Dick has been in talks with NSW Treasurer Matt Kean on the issue.

Mr Kean is also under pressure from the NSW chapter of the AMA, which is now encouraging patients to write to the minister directly, asking for a general practice payroll tax exemption.

So far, no state or territory has granted an exemption.

The Queensland grace period is just that, and beginning July 2025 it’s understood that the Queensland Revenue Office will start applying the taxation ruling it released in December.

Under the ruling, many practices will be viewed as employing rather than contracting their doctors and be required to hand over about 5% of their turnover to the state.

The general understanding is that GP practices should use the grace period to change their business structure.

AMA Queensland president Dr Maria Boulton welcomed the reprieve, but said that the organisation would not stop fighting for a full exemption.

“GPs already work as tenants in general practice, so how are we going to change the structure?” she said.

“Does that mean that we have to work in silos and does that mean that we won’t be able to cover for each other when someone’s away or work after hours because we won’t be able to do after hours rosters?

“It’s nonsensical. We need to continue to practice in the way that we’re practicing.”

South of the Tweed River, the AMA NSW has launched a postcard campaign encouraging GPs to “mobilise” patients to directly lobby the Treasurer and Premier for a payroll tax exemption on their behalf.

With a state election coming up in March, AMA NSW chair Dr Michael Bonning told The Medical Republic that the timing should work in doctors’ favour.

“These postcards and the campaign is just another reminder that we talk to voters every single day,” he said.

“And in fact, across the state, we will talk to far more of them in the next eight weeks or seven weeks before the election than any of the politicians will.”

But if the AMA has always known that patients could be mobilised like this, why do it now and not, say, when the Medicare rebate was originally frozen almost 10 years ago?

The key difference with payroll tax, Dr Bonning said, is that if and when the states start to apply the stricter tax ruling, the hip-pocket cost of going to the doctor will rise by about 15% overnight.

“If one day it’s not there and the next day it is there, then we have to just add that on [immediately],” he said.

Essentially: if the Medicare freeze was like slowly boiling a frog, the effect of payroll tax will be like dumping the contents of the kettle on an unassuming amphibian.

“Both [parties] need to be on notice that this kind of [tax law] interpretation is going to have real downstream effects that are going to hurt the system for very little gain,” Dr Bonning said.

“That is why you engage the patients.”

Considering that payroll tax is a state issue, there has been plenty of discussion about it at a federal level.

For the issue to be dealt with equitably across state borders, Dr Bonning said, there needed to be a level of cooperation between premiers, chief ministers and the Department of Health.

“[National Cabinet] is one of the pathways in which state premiers get to talk to each other and say, ‘all right, we will agree on not levying payroll tax, we’ll make sure that there’s a clear exemption for medical practices and we’ll do that together,’” said Dr Bonning.

“‘We’ll all say we’re on the same page … and for the good of the healthcare system we’ll step back and show some restraint.’

“Then they say to the Commonwealth government, at the same time, ‘We’re going to do this to protect healthcare to ensure that our funds are used effectively and we’re not putting more pressure on hospital emergency departments.’”

All going well, Dr Bonning hopes, the states agreeing not to levy the tax would be a trigger for cooperation and the Commonwealth would agree to put more funding into primary health.

“You always come [to a meeting like National Cabinet] and say, ‘here’s what we’re willing to bargain with,’” he said.

Healthcare accountant David Dahm sees the situation with a little more cynicism.

“If [the Queensland government] were genuine about it, they would just give the two-and-a-half-year exemption now and just go quietly,” Mr Dahm told TMR.

“There’s no need to go to National Cabinet about it.”

The Courier Mail reported that Ms Palaszczuk was not briefed about the payroll tax grace period until Thursday night, and that the state went into the meeting hoping that all other states and territories would adopt the same measure for a nationally consistent response.

“State and federal governments genuinely hate each other, even if they’re on the same team,” Mr Dahm said.

The situation, he said, essentially amounted to political blackmail.

“The reason why [Queensland] are going to the feds is that they’re going to threaten the feds and say ‘guess what, we’re going to enforce these rules,’” said Mr Dahm.

Enforcing that rule would be a good way to ensure that bulk billing rates would immediately nosedive, leaving egg on the federal government’s face.

“This is politics,” Mr Dahm said.

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