Payroll tax: NSW scrambles, Vic keeps playing it cool

Doctors in Victoria are trying to get the government back to the negotiating table, while the NSW Finance Minister has approached the RACGP.

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The RACGP, Australian GP Alliance and Primary Care Business Council have come together to take a stand against the existential threat of payroll tax, by sending a strongly worded letter to Victorian Premier Jacinta Allan.

It comes after booking engine HotDoc released data earlier this week suggesting that hundreds of clinics in the state would be forced to close due to clarified payroll tax rules that, if enforced, class many contractor GPs as practice employees.

A Legislative Council petition calling on the government to stop the introduction of payroll tax on general practitioners was also presented in parliament this week, having been signed by around 5600 Victorians.

Victoria is the only jurisdiction where the government has signalled its intent to enforce the clarified rules but refused to commit to a payroll tax amnesty period for GPs.

The closest it has come is Treasurer Tim Pallas pledging to use extraordinary powers to wipe the debt of practices pushed to the brink of closure by the tax.

RACGP Victoria chair Dr Anita Munoz told The Medical Republic that the treasurer was “giving himself false comfort”.

“A big component of the treasurer’s pushback is that he maintains that there are no clinics that are closing or have closed,” she said.

“And our riposte to that is there is no clinic that is going to willingly write to the treasurer and tell him that they are closed or closing and draw greater scrutiny from a treasurer and a State Revenue Office that treats the industry this harshly.”

The letter to Ms Allan calls on the government to commit to no retrospective payroll tax audits, clarification of the rules similar to Queensland’s long public ruling and some form of amnesty or “assisted compliance period”.

Dr Munoz said her fear was that the premier would only get involved once the situation had devolved to a point of no return.

“We’ve indicated to the premier that our capacity to have a conversation that’s productive with the treasurer has been eroded,” she said.

“We’re not having any meaningful discussion on the significance of this issue, and we believe that it requires the premier’s attention.

“The threat to the Victorian healthcare system, in our opinion, is not being appropriately appreciated.”

Even federal Health Minister Mark Butler has weighed in on the debate, directly urging the Victorian government to “look very closely” at the Queensland model.

“Payroll tax is a matter for states, but I am very worried that the historic investments we’ve put into Medicare, in response to calls from state governments, will be lost to increase payroll tax obligations by general practices,” he told the Herald Sun.

Mr Pallas reportedly hit back in a letter to Mr Butler in which he called the view “uninformed”.

“It is misleading and might I say entirely gratuitous to have commentary, uninformed commentary, from our junior health funding partner, around the state tax system,” Sky News reported.

AGPA deputy chair Dr Mukesh Haikerwal, who penned the Legislative Committee petition, called the minsters’ spat “unbecoming”.

“I think it’s really hinting where the issue is – there’s a big shortfall in cash,” he told TMR.

“It’s a grab for cash, it’s nothing new. There’s always a fight between federal and state about federal funding arrangements.”

The state government to the north of the Murray River has had a polar opposite reaction.

Following the release of the HotDoc data, as well as the RACGP pointing out that the NSW payroll tax amnesty period is now half over, Finance Minister Courtney Houssos arranged urgent meetings with the college.

While the approach appears promising, Premier Chris Minns would not make a commitment either way when asked by The Daily Telegraph on Wednesday.

“We recognise it could have an impact on primary healthcare and we can’t allow that to stand,” he told the paper.

If a permanent fix isn’t on the books by the end of August, practices which were audited prior to the amnesty period going into place will be required to cough up the dough quick smart.