ACT GPs, your payroll tax is about to change

Both major parties have committed to at least a partial waiver of payroll tax on GP clinics.

---

No matter who wins the ballot next month, Canberra’s GPs will be receiving some kind of payroll tax relief.

While the Canberra Liberals made a promise back in August 2023 to exempt GPs from payroll tax if they were to win the next election, ACT Labor only confirmed that it would deviate from its somewhat unpopular GP payroll tax scheme late on Tuesday.

The territory currently has a payroll tax amnesty in place for general practice, which is set to end in June 2025.

Under the settings as they are now, from July next year practices that bulk bill at least 65% of patients would have their payroll tax liabilities waived for two years so long as they registered with ACT Revenue and MyMedicare.

Canberra has the lowest bulk-billing rate of any jurisdiction in the country, and the proposal was largely seen as unworkable by local GPs.

Labor’s new proposal will exempt any income earned by GPs from any bulk-billed services from payroll tax from July 2025.

This would bring it in line with payroll tax regulations in Victoria and South Australia.

Health Minister Rachel Stephen-Smith said Labor’s change of tune was in response to feedback from stakeholders about the practical operation of payroll tax liabilities in general practice.

The Canberra Liberals have not given detail on their payroll tax solution yet, but every time party leader Elizabeth Lee has spoken on the topic, she has hinted that it will be a comprehensive exemption.

Her exact words were that a Liberal government would “provide an exemption for this tax on GPs”, “abolish this tax” and “abolish Andrew Barr’s GP tax”.

RACGP NSW/ACT chair Dr Rebekah Hoffman told The Medical Republic that she welcomed any movement on payroll tax and that the college was aiming for a nationally consistent solution.

“What we advocate for is a nationally consistent framework where GPs are excluded from having to pay payroll tax,” she said.

“That would be our first preference – but excluding that, we’re calling for clarity, transparency and the one system nationwide, so an ACT clinic who also has a clinic in New South Wales or Queensland or Victoria isn’t juggling multiple different rules across multiple different jurisdictions.”

The main concern among Canberran GPs, Dr Hoffman said, was having to pass the cost of the tax on to patients.

AMA ACT president Dr Kerrie Aust also welcomed changes that would reduce the burden of payroll tax, but said there would still be challenges to bulk billing in the territory.

“One of the big things about governments wanting to increase bulk billing rates is that we really need to make sure that we’ve got an investment that addresses the cost of providing general practice services within the ACT – thinks like nurse-based wage pressures,” she told TMR.

“There are a few items within Labor’s election promise that we think provide quite a good basis for us to continue negotiations, and we really look forward to seeing the fine detail of those policies.”

The other GP-centric policies from ACT Labor include allowing GPs to prescribe ADHD medicines, incentive payments to attract GP registrars and a territory-wide GP Liaison Unit to interface between hospitals and primary care.

The centrepiece is an $11 million fund that will provide grants to support the opening and expansion of bulk billing clinics as well as assist the cost of running a clinic where all children under 16 are bulk billed.

Beside the payroll tax commitment, Canberra Liberals have not made any GP-specific pledges.

Both Dr Hoffman and Dr Aust told TMR that the biggest issue facing healthcare in the ACT was workforce.

“If I’m a GP, I need to have colleagues [in hospital specialties] so that my patients can be seen and so that I can practice safely,” Dr Aust said.

“If I’m referring my patients to the public system, do I know how long their wait is going to be?

“Is it going to be reasonable, or do I need to refer them interstate so that they can receive their urgent care within a timely manner?

“We continue to refer an extraordinary number of patients to Goulburn, Sydney and Wagga for services that we should have access to in the ACT.”

For this reason, the AMA and RACGP were both keen to see more done to attract registrars to the bush capital.

“Workforce is the biggest issue, but it’s not just a case of importing more doctors,” Dr Aust said.

“It’s about making sure that the culture of medicine in the ACT supports people to work to the top of their scope in a safe manner.”