Michelle Daw, Yorke Peninsula Country Times
General practitioners warn a move by the state government to enforce payroll tax on GPs who are not employees could make their practices unviable and force them to close.
Revenue SA announced the proposed imposition of payroll tax on South Australian GPs in June, following the New South Wales, Victorian and Australian Capital Territory Governments in a new interpretation of payroll tax law.
General practices already pay payroll tax on employees, including nurses and administration staff, but the ruling means the tax could now cover GPs who lease rooms and pay a fee for facility services to the practice owner, unless an exemption applies.
General practices in South Australia have until September 30, 2023 to register for an amnesty in place until June 30, 2024.
Australian Medical Association South Australia branch president Dr John Williams said he believes regional practices will be hit harder than those in metropolitan areas because they are less able to pass the increased cost onto their patients.
“The new cost will cripple general practice, with devastating effects for patients, their health and well-being, and the health system,” Dr Williams said.
“Patients who will have to pay more for GP appointments, discover those appointments are more difficult to obtain, and head to and add to the burden on our emergency departments.”
Dr Williams said national calculations show it could add hundreds of thousands of dollars a year to operating costs.
He said most GPs are contractors, not employees, and so the tax has not previously applied.
“This new, additional cost will wipe out the tiny profit margin most practices maintain,” he said.
“Our members — the GPs who kept South Australians alive and businesses operating during Covid — are telling us they can’t survive this extra cost.
“As many as 30 percent are considering shutting their doors.
“In regional and outer metropolitan areas, there tends to be a lower socio-economic profile, more elderly people and more people with chronic disease, so most practices will be bulk billing — they can’t charge a gap fee and recoup this cost.”
The AMA has asked Treasurer Stephen Mullighan for an extension to the amnesty deadline.
Mr Mullighan said the tax is not new and has always been payable for deemed wages paid under a relevant contract for services above the tax free threshold, including for GPs.
“Suggestions costs will be passed onto patients and put pressure on emergency departments simply don’t stack up,” he said.
This article appeared in the Yorke Peninsula Country Times, 26 September 2023.
