Doctors’ Groups Urge Andrews Government to Scrap New Payroll Tax

Victorian Premier Daniel Andrews speaks to media at the Parliament of Victoria in Melbourne, Australia, on May 18, 2023. AAP Image/Joel Carrett

The Victorian Labor government is being urged to scrap its new payroll tax on GPs, with doctors’ groups saying that it will lead to higher fees for patients or widespread shutdowns of medical clinics.

This follows an Aug. 11 ruling by Victoria’s State Revenue Office (SRO), which indicated that medical clinics in Victoria will be subject to a new backdated payroll tax.

This has left one Victorian practice owner “no choice” but to shut the doors of two clinics after the owner received an $800,000 bill (US$519,000), according to a joint statement issued by the Royal Australian College of GPs (RACGP), the Australian Medical Association Victoria (AMA Victoria), and the Australian GP Alliance (AGPA).

“I have to close down. It’s going to happen not only to me. Unless there’s an exemption, we’ll see a catastrophic closure of medical centres—more than half will be wiped out,” the practice owner said.

Medical clinics already pay payroll tax on their employees, including receptionists, GPs in training, and nurses. But it was not applied to GPs because most doctors are not employees; they lease rooms from a practice owner and work under independent agreements.

Shadow Health Minister Georgie Crozier said the new tax will have flow-on effects with higher patient fees, fewer bulk billing clinics, and more demand on Victoria’s hospitals and emergency health services.

“This is a desperate cash grab by a government that is broke. It will have huge ramifications for Victoria’s beleaguered health system and leave Victorians without vital health services,” she said on Aug. 30.

Ms. Crozier added that the tax would result in tax bills of hundreds of thousands of dollars for clinics, and place the ongoing viability of some clinics at risk.

RACGP Victoria Chair Dr. Anita Munoz has called on Premier Daniel Andrews to intervene.

“GP practices operate on very thin margins, and if our Premier doesn’t intervene fast, we’ll see more and more practices forced to close, or to raise fees. This will mean more patients going to overflowing emergency departments and spiralling spending on hospital services,” Dr. Munoz said.