Discover why GP visits in this state will soon cost extra $15
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As the cost of living continues to rise, residents of one state could be hit by another financial crisis, this time affecting their healthcare.
Within the next few months, patients could see their GP visit fees increase by as much as $15, a change that has sparked concern and debate.
This potential increase is due to a looming tax change in New South Wales that could significantly impact doctors and their practices
Historically, medical practices have been exempt from paying payroll tax for tenant doctors who are considered independent contractors.
This exemption has been based on the fact that approximately 90 per cent of GPs lease rooms in clinics, and their wages are not included as part of the overall business, thus not subject to payroll tax.
However, a ruling by the NSW Civil and Administrative Tribunal in July 2023 has altered this exclusion.
The tribunal found that doctors are an integral part of a clinic’s business and should, therefore, be subject to payroll tax.
This decision has sparked a wave of concern among medical professionals who fear the financial implications of this change.
Following the tribunal's ruling, a 12-month pause on payroll tax audits for GPs and their practices was implemented.
This was in response to some clinics reporting that they had been retrospectively hit with the tax, amounting to millions.
This temporary reprieve is set to end in August, leaving doctors with a four-month deadline to prepare for the potential financial hit.
Dr Rebekah Hoffman, the NSW Chair of the Royal Australian College of General Practitioners, has voiced her concerns about the impact of this tax change, saying most GPs will need to increase their fees to keep their practices open.
'For most GPs, it will mean increasing their fees from $12 to $15 to cover the additional costs,' she said in an interview.
'Most GPs are small businesses, we don’t have large amounts of surplus funds to be able to cover big tax increases by asking us to pay more tax.'
'The only option is to, unfortunately, pass it on to our patients.'
This is a significant concern for many doctors, as GPs already cover their superannuation, tax, annual leave, insurance, and other costs themselves.
The NSW government is currently in negotiations with GPs about the impending end of the 12-month pause.
Premier Chris Minns acknowledged the complexity of the situation, stating, 'Tax arrangements for GP co-operatives are not easy things to navigate.'
When asked whether the new tax would lead to some GPs closing their doors, Premier Minns said: 'I don’t believe that we’ll come to that…negotiations have been fruitful.'
The Opposition health spokesman, Matt Kean, however, has criticised the changes as a mere 'tax grab'.
He pointed out the government's recent tax cut for Star casino as an example of misplaced priorities.
'Star was able to get a $320 million tax cut from this government, but our GPs are now getting smashed with an unfair tax,' he said.
Finance Minister Courtney Houssos countered this criticism by citing recent Medicare data that showed an increase in bulk-billing rates in NSW.
This uptick followed changes to GP incentives made by the federal government in November.
'It’s clear those effects are starting to flow through to practices to ease cost pressures on GP practices and patients,' she said.
What are your thoughts on this potential increase in GP visit costs? Share your thoughts in the comments below.
Within the next few months, patients could see their GP visit fees increase by as much as $15, a change that has sparked concern and debate.
This potential increase is due to a looming tax change in New South Wales that could significantly impact doctors and their practices
Historically, medical practices have been exempt from paying payroll tax for tenant doctors who are considered independent contractors.
GP visits will soon cost NSW residents extra dollars. Image source: gpointstudio on Freepik.
This exemption has been based on the fact that approximately 90 per cent of GPs lease rooms in clinics, and their wages are not included as part of the overall business, thus not subject to payroll tax.
However, a ruling by the NSW Civil and Administrative Tribunal in July 2023 has altered this exclusion.
The tribunal found that doctors are an integral part of a clinic’s business and should, therefore, be subject to payroll tax.
This decision has sparked a wave of concern among medical professionals who fear the financial implications of this change.
Following the tribunal's ruling, a 12-month pause on payroll tax audits for GPs and their practices was implemented.
This was in response to some clinics reporting that they had been retrospectively hit with the tax, amounting to millions.
This temporary reprieve is set to end in August, leaving doctors with a four-month deadline to prepare for the potential financial hit.
Dr Rebekah Hoffman, the NSW Chair of the Royal Australian College of General Practitioners, has voiced her concerns about the impact of this tax change, saying most GPs will need to increase their fees to keep their practices open.
'For most GPs, it will mean increasing their fees from $12 to $15 to cover the additional costs,' she said in an interview.
'Most GPs are small businesses, we don’t have large amounts of surplus funds to be able to cover big tax increases by asking us to pay more tax.'
'The only option is to, unfortunately, pass it on to our patients.'
This is a significant concern for many doctors, as GPs already cover their superannuation, tax, annual leave, insurance, and other costs themselves.
The NSW government is currently in negotiations with GPs about the impending end of the 12-month pause.
Premier Chris Minns acknowledged the complexity of the situation, stating, 'Tax arrangements for GP co-operatives are not easy things to navigate.'
When asked whether the new tax would lead to some GPs closing their doors, Premier Minns said: 'I don’t believe that we’ll come to that…negotiations have been fruitful.'
The Opposition health spokesman, Matt Kean, however, has criticised the changes as a mere 'tax grab'.
He pointed out the government's recent tax cut for Star casino as an example of misplaced priorities.
'Star was able to get a $320 million tax cut from this government, but our GPs are now getting smashed with an unfair tax,' he said.
Finance Minister Courtney Houssos countered this criticism by citing recent Medicare data that showed an increase in bulk-billing rates in NSW.
This uptick followed changes to GP incentives made by the federal government in November.
'It’s clear those effects are starting to flow through to practices to ease cost pressures on GP practices and patients,' she said.
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This is ridiculous, with many people already forgoing seeing doctors because they can't afford to.
