Riverina GPs raise outcry as government weighs up new payroll tax on already stretched healthcare sector

GP clinics across Wagga and the wider Riverina could soon be required to pay a state payroll tax, sparking concerns the cost will be passed onto the sick.

In recent weeks, the Royal Australian College of General Practitioners has been lobbying the government about the threat this could pose to the primary healthcare sector.

IN OTHER NEWS:

In a recent open letter, it warned up to 20 per cent of general practices could be forced to close.

Former president of the RACGP and GP at Wagga's Glenrock Country Practice, associate professor Ayman Shenouda called it a "sick tax" as the patients were likely to be hit as a result of the move.

"Unfortunately the patients will pay the price for it," Dr Shenouda said. "It's more revenue for the NSW government from struggling general practices and the consequence of this tax could be very disastrous to our health system, especially in rural and remote areas."

Medical practices typically operate a 'service entity' model whereby the practice collects consultation income on behalf of doctors and then distributes it to individual doctors after deducting a service fee.

Revenue NSW has confirmed that it will broaden its application of existing payroll tax laws to encompass medical practices operating 'service entities'.

Dr Shenouda said the state was trying to find extra revenue "without understanding the dynamics of how that would affect patient care and access to patients for medical care".

He said practices were already finding it difficult to keep their doors open in the current climate of inflation and after the Medicare rebate was "frozen for six years".

Rural Doctors Association NSW vice-president and Temora GP Rachel Christmas also has major concerns about the tax.

Dr Christmas said initially the government floated the idea that general practices may have to pay back five years worth of payroll tax should it be implemented.

"That is very worrying indeed," she said.

She said general practices already paid payroll tax for office staff, nurses and other employees.

Dr Christmas said if implemented, the tax would increase costs by five per cent.

"Given the current state of affairs in general practice, this is just another cost that practices would have to choose to absorb - in a system where bulk billing is already under pressure resulting in significant loss of income already - or to pass onto the patient," she said.

Dr Christmas said she did not know whether the government decision was a "tidying up of inconsistencies" by the Department of State Revenue or a "true money grab".

"If it is the latter, it is ill conceived as it will only harm general practice and shift the burden onto hospitals," she said.

A NSW Government spokesperson said the government had been engaging with stakeholders, including the Australian Medical Association, RACGP and Primary Care Business Council, to understand the impact of key legal precedents set in relation to healthcare practices and the payroll tax.

"The NSW Government is assessing the implications for General Practices and will continue to work constructively with all relevant stakeholders," the spokesperson said.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: