A greedy state tax grab on GPs and their patients could force many general practices to close and may spell the end of bulk billing in QLD.
According to the AMA QLD, the state’s government is hitting struggling practices with retrospective tax bills of as much as $3 million, following an NSW Civil and Administrative Tribunal ruling which led the Queensland Revenue Office (QRO) to deem GPs to be employees for payroll tax purposes.
The QRO is seeking to retrospectively tax individual practices for up to five years with a 75% liability and has refused to meet with practices to explain or justify its actions.
Estimates by the AMA QLD predict that up to 81% of QLD’s general practices will be affected, with President Dr Maria Boulton describing the decision as a ‘tax on patients.’
“General practices cannot bear these costs and will have no option but to pass them on to patients or close their doors,” Dr Boulton said.
“The state government is effectively extinguishing any bulk billing in general practice. It is simply not viable for practices to continue bulk billing while having to pay unexpected bills of millions of dollars in some cases: bulk billing will disappear completely and patients will go to emergency departments instead, overwhelming hospitals.
“This is an extremely short-sighted cash grab that will only exacerbate the problems in our GP workforce. For every dollar spent on general practice, there is a tenfold return to the healthcare system in terms of savings, and every dollar the state raises through this tax will cost them 10 times as much in the long term,” she explained.
“Other states recognise this and are considering payroll tax exemptions for general practice. If NSW introduces an exemption and QLD doesn’t, our clinics will be at a competitive disadvantage and GPs will move interstate.”
GPs usually work under service agreements with practices which provide the premises, plant and equipment, billing services, reception, and administrative and allied health staff – but does not pay GPs wages, superannuation, leave, other entitlements or benefits, or provide professional development and training.
“In most cases, GPs are not employed by their clinics. They have a service agreement to use clinic premises and administrative support, but the clinic does not pay their wages, superannuation or leave. These practices have been complying with the law for years,” Dr Boulton said.
“Medicare rebates to patients have not kept pace with the rising costs of providing medical care for decades and costs have risen 10-15 per cent during the pandemic. GPs have subsidised the cost of the 31 million COVID vaccinations they provided and did so for the public good.
“Our hardworking GPs are already at breaking point after almost three years of a pandemic, [but] now the QLD Government is using a decision by an NSW tribunal to hit Queensland general practices with payroll tax.”
The AMA QLD is calling on the state Treasurer and the QLD government to consider the impact that this will have on the ability of patients to access medical care, in light of Australia’s already strained health system, and exempt general practices from paying the retrospective tax bill.
“GPs have been subsidising patient care for decades. They cannot afford to continue to do so with the rising costs of providing quality medical services [and] it is time for all levels of government – state and federal – to step up and care for patients too.”