The State Government’s new health tax is another hit for rural and regional communities, with many GP clinics facing the risk of closure. 

Labor recently reclassified tenanted medical professionals as employees, not contractors, for payroll tax. This move has left clinics grappling with debts often in the hundreds of thousands of dollars, as the tax has been backdated up to five years in many instances.

The Labor tax grab has been described by the Royal Australian College of General Practitioners (RACGP) as the “biggest existential threat to general practice” in Victoria.

Polling by the RACGP unveiled a potential mass GP clinic closure in Victoria, with over one third of clinics advising they will consider moving their practice interstate.

Deputy Leader of The Nationals and Member for Lowan, Emma Kealy, said the risk of GP practices closing directly due to Labor’s new health tax was of great concern, particularly in regional areas.

Highest Debt

“Under Labor, Victoria’s state debt is now the highest in the state and they continue to introduce new taxes to make up for their waste – in this case putting another nail in the coffin of our already fragile health system,” Ms Kealy said.

“What we are seeing is Victorians continuing to be punished for the incompetence of the State Government.

“Victoria’s health system is on life support and Labor needs to take urgent action to address our health crisis – not introduce another tax to drive our highly valued GPs interstate.”

Immediate Report

Dr David Wilson, Practice Principal, and Amanda Wilson, CEO of Horsham’s Lister House Medical Clinic, said the new payroll tax would have an immediate impact on all general medical practices across Victoria.

“The associated increased cost to business will mean that already stretched services will need to either pass on the cost to patients or potentially close,” they said.

“The medical industry is already under immense pressures with many doctors retiring and not enough younger General Practitioners coming through to replace them.”

The Wilsons said the increased administrative burden was only going to take doctors away from what they want, and need, to be doing: seeing patients.

“Why would anyone consider becoming a GP when there is more red tape and more taxes? All it will do is discourage more young doctors from becoming GPs.

“It does not make sense to keep destabilising an industry that is already stretched to capacity.

“We understand taxes need to be paid – and we pay our taxes – but a retrospective payroll tax should not apply to a doctor who uses a facility to provide them with a suitable premises to see patients.  

“A doctor is an independent practitioner who should not need to waste time on more administrative tasks.

“We would like to see the Victorian Government members be the leaders that they should be, with doctors wanting to move here because they have made working here easier.

“They need to drop the red tape and let doctors get back to doing what they do best – providing Victorians with access with affordable, quality health care.”

Ms Kealy is encouraging anyone concerned by the health tax to sign a parliamentary petition: https://new.parliament.vic.gov.au/get-involved/petitions/stop-introduction-of-payroll-tax-on-contractors-including-doctors/

This article appeared in The Buloke Times, 8 December 2023.