While the news will come as a relief to some, it will be cold comfort for the clinics that have already invested time and money into making their business compliant with Queensland’s public rulings.
Queensland Labor has officially pledged to legislate an exemption for payroll tax on GPs, just a week after labelling the idea “nonsense”.
This means that, no matter which party wins the state in its 26 October election, payroll tax threats to contractor primary care doctors will become a thing of the past in Queensland.
Deputy premier and treasurer Cameron Dick maintained that GPs had nothing to fear under Labor’s old approach, even as he announced the pledge.
“Two years ago, a New South Wales court case found that medical centres should pay payroll tax for general practitioners,” he told The Medical Republic.
“Our government put in place an amnesty and a public ruling that made it clear doctors would not have to pay payroll tax.
“[Opposition leader] David Crisafulli has been deceiving Queenslanders and as a result, we will put an end putting an end to his campaign of misinformation by legislating to automatically exclude general practitioners from payroll tax.”
Last week, the Queensland Liberal National Party formalised its long-standing promise to nix payroll tax on contractor GPs by passing an amendment to the Payroll Tax Act 1971 making GPs a special category.
While Labor has not yet specified how it will institute its exemption, Mr Dick’s description of legislation to automatically exclude general practitioners appears to allude to a similar mechanism.
AMA Queensland president Dr Nick Yim told TMR that the bipartisan support for a complete exemption was a positive for patients across the state.
“We acknowledge the increased costs of living for our patients, and this is something that general practitioners and general practices have been working very, very hard on,” he said.
A legislated payroll tax exemption for general practice would also overrule Queensland’s comprehensive ruling on payroll tax, which clarified that practices which had patients pay GPs directly could largely avoid the tax.
With just under a year left until the exemption on payroll tax for GPs expires, clinics had already invested precious resources into becoming compliant with this ruling.
“Many practices across Queensland, including my practice in Hervey Bay, have invested a lot of time in seeking out legal and accountancy advice,” Dr Yim said.
“But these announcements by both sides of politics are very reassuring to general practice and gives us that assurance moving forward.”
Former RACGP Queensland chair Dr Bruce Willett, who helped negotiate the extended public ruling, said he did not feel like his efforts had gone for naught.
“I think we really created that pressure and acknowledgement that this was something that practices weren’t in a position to bear,” he told TMR.
“As you know, the college did research [that found only] 3% of practices would be in a position to absorb this [tax].”
Of course, election promises do not a payroll tax exemption make.
The exact wording of the proposed pieces of legislation, which are still but a twinkle in a politician’s eye, will reveal whether there are any strings attached.
“That’s the thing we need to nail down with them, is what strings are they looking to attach?” Dr Willett said.
“Certainly … I’ve had some lovely texts from the opposition and they are looking to do it without strings attached, so that’s good news.
“I’m not sure about the Labor side of things, but either way this is certainly a big shift that really puts the pressure on all of the other states to follow suit.”
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Healthcare accountant David Dahm was more sceptical of the government’s intentions.
“It’s still a promise, and promises do get watered down,” he told TMR.
In NSW, Victoria, the ACT and South Australia, promises of payroll tax relief have been tied to practices hitting certain bulk billing rates.
“Other politicians have said scrapping or giving or eliminating, but it’s subject to bulk billing or it’s subject to handing over all your data so … the ATO can go after you for super and PAYG and GST,” Mr Dahm said.
“And that’s what’s happening … data is coming through, [states] are collecting it and it’s going to other authorities, exposing individual practitioners to audits and claims.”
He encouraged GPs and practices to look any gift exemption in the mouth.
“Both sides will say anything, because it’s an election if nothing else, but the temptation to take it back and revert doesn’t go away once they get comfortable and the honeymoon period is over,” the accountant said.
“They’ve still got to balance the books – so [I have] a slight of degree of caution, dare I say scepticism.”
