NSW GPs who were at risk of closing shop have been given “breathing space” and patients saved from increase appointment costs after the government announced it would pause payroll tax for the next 12 months.
Finance Minister Courtney Houssos announced the one-year reprieve on Thursday. GP clinics that have received retrospective tax bills since rules were changed earlier this month will also get a 12-month break on tax penalties and interest accrued on outstanding debts.
Previous arrangements meant GPs who were previously exempt from paying payroll tax would be hit with the charge that was previously only applied to receptionists, nurses and GPs in training.
Because doctors were considered to be leasing a room from the practice owner, they were exempt from the tax.
Royal Australian College of General Practitioners president Nicole Higgins said both financially-struggling GPs and patients were set to benefit.
Previous research from the professional body found 78 per cent of practices would need to pass on the price increases to patients, which could result in a $15 to $20 hit to appointment costs.
“I spoke to one practice owner who received a retrospective tax notice and was facing closure, and they are immensely relieved and grateful, knowing that they are now able to keep their doors open for their patients,” Dr Higgins said.
“General practice is the engine of our health system. It keeps people healthy at all stages of life and reduces pressure on hospitals.
“With our ageing populating and rising rates of chronic disease, it’s more important than ever that we keep this engine running strong, and everyone can get the care they need, no matter what they earn or where they live.”
Ms Houssos said the pause to payroll taxes would give GPs critical “breathing space” before federal interventions came into effect.
In this year’s federal budget, Treasurer Jim Chalmers flagged prioritising bulk-billing incentives for practices, including a $1.5bn indexation boost to the Medicare Benefits Schedule (MBS).
“This matter is historic and dates back to before 2018. Its resolution has been hampered by multiple court hearings and the neglect of the previous Coalition Government. We understand this neglect has created great uncertainty in the GP community,” she said.
“We also want time to assess the effects of the bulk-billing changes being introduced federally by the Albanese government.
“We are working hard to rebuild and restore essential services ignored by the previous Government. This will take time but we are committed to doing this carefully and thoughtfully to achieve the best result we can.”