Things are heating up in the capital city better known for its cold and windy weather.
Politicians in the ACT and Victoria can brace for an onslaught of GP anger, as accusations fly over payroll tax.
Speaking at an Australian GP Alliance webinar last night, deputy chair Dr Mukesh Haikerwal said that the AMA, RACGP and AGPA would be going in for further negotiations with the Victorian government.
At a webinar on payroll tax run by accountancy firm William Buck two weeks ago, RACGP president Dr Nicole Higgins said talks with the Victorian government had stalled after it refused to commit to no retrospectivity.
“We’ve got three [Victorian practices which have been audited] and the repercussions are potentially that people will shut their doors,” Dr Haikerwal said.
“So it is real, and the politicians will be feeling the heat.”
Spring Street won’t be the only place where GPs will be attempting to put pollies’ feet to the fire – an emergency meeting of general practices in Canberra last night ended with a resolution to keep fighting for better amnesty terms.
The meeting, which brought together practices that treat a combined 50% of Canberrans, unanimously condemned the territory’s offer of payroll tax amnesty which hinged on practices pledging to bulk bill 65% of patients.
It’s a particularly curious situation, because the ACT has the highest payroll tax threshold in Australia, at $2 million in combined wages.
In its initial announcement, the territory advised that just 10 general practice business entities currently meet the threshold to pay payroll tax and maintained that most small or medium practices are unlikely to meet the threshold.
New developments in case law have clarified that payments from a practice to its GPs may constitute wages in some cases.
This opens up the possibility that practices that are currently under the threshold may be found to be over the threshold if they receive an audit.
The situation will potentially be dire for these practices, which will go from not having to pay any payroll tax to having to pay the tax on all employees, from receptionists and registrars to GPs.
Dr Melian Deery, who co-owns several practices across the nation’s capital, is among the group of 10 owners of business entities that currently pay payroll tax on non-GP employees.
She was hoping that her main practice, YourGP@Denman, would finally turn a profit this year; the prospect of paying payroll tax on contractor GPs has torpedoed that idea.
“We just feel like we’re in a completely stuck position,” she told The Medical Republic.
“We cannot meet the bulk billing mandate by the government because we will be non-financially viable and we cannot pay the tax as a practice because we’re not actually profitable enough.
“We don’t have the fat in the system that the government just thinks that we’ve got … we’ve got no choice but to pass this tax on to patients.”
While the territory has committed to automatically applying no retrospectivity on payroll tax for all medical practices, its amnesty program has raised eyebrows, with many stakeholders doubting that practices can survive by bulk billing the required proportion of patients.
“In the June quarter of the last financial year, 30 of the 31 primary health networks across Australia bulk billed more than 70% of consultations,” a spokesman for the ACT said.
“The only jurisdiction not over 70% was the ACT at 56%.
“By providing a further two-year payroll tax exemption to medical practices supporting the community with significant levels of bulk billing at 65%, the ACT Government is working to enhance access to primary healthcare and relieve cost-of-living pressures.”
Medicare statistics from March indicate that just 38% of ACT patients are fully bulk billed.
ACT Chief Minister Andrew Barr went so far as to accuse doctors who raised concerns about their practice’s ability to meet his preferred level of bulk billing of “a lack of ambition”.
“Lobby groups who seek to minimise tax will make all sorts of wild accusations,” he told the Legislative Assembly on Tuesday.
“This debate has been full of that and has been based on a fundamental misunderstanding about how the tax is applied and how it is collected but it has also been based on frankly a lack of ambition in relation to bulk billing, an ambition that is achieved everywhere else.”
Dr Higgins called the reasoning “flawed”.
“It’s almost certain to fail at its first test with very few practices able to take it up and remain viable,” she said.
“If this happens, it will be devastating for the patients and communities that lose their GPs.”
