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NSW and VIC patients expected to pay more at the GP

Despite strong Federal Government investment, the Victorian and New South Wales State Governments have come under fire for a new healthcare ruling.

<p>The State Revenue Office of Victoria labelled the ruling as “harmonised,” with that of Queensland and South Australia. [Source: Shutterstock]</p>

The State Revenue Office of Victoria labelled the ruling as “harmonised,” with that of Queensland and South Australia. [Source: Shutterstock]

Key points:

  • Australian patients may pay more to see their general practitioner following recent rulings in New South Wales and Victoria on August 11, 2023
  • General practice doctors have widely operated as contractors or ‘tenant doctors’ in Australia, which meant the GP would lease a room within a clinic and their services would not be taxed as an employee
  • Whereas Queensland and South Australia have offered an amnesty period to review liability, NSW and Victoria Revenue Offices have not


The Royal Australian College of General Practitioners, Australian Medical Association Victoria and the Australian GP Alliance have called on Victorian Premier Daniel Andrews to issue an exemption for independently contracted GPs under the new payroll tax ruling.

The peak bodies for GPs operating in Australia expressed concern to the premier and urged him to confirm whether the Government sought back payments for tax collection.

“[RACGP, AMAV and the AGPA] have recently become aware of several Victorian general practices who are currently at risk of closure due to the application of this tax,” the letter stated.

The ruling comes after a judgement was handed down on March 14, 2023, in a NSW trial — Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue.

The results of a 2023 newsGP poll indicated that only three percent of practices would be able to absorb the costs of GPs becoming liable for payroll tax and 78 percent would be forced to raise fees if doctors became ‘employees’ for tax purposes.

Dr Nicole Higgins, president of the RACGP, said that the associated costs would trickle down to people who require care, as State Governments would undermine the efforts of Federal Government funding.

“The Federal Government is making major investments and reforms to make GP care more accessible and affordable — such as tripling bulk-billing incentives […] at the same time, State Governments are ripping funding from general practice to boost their own tax revenues,” Dr Higgins explained.

“GPs and their patients are caught in the middle and it is the patients who will be hurt most when they lose their local GPs and access to essential care.”

In January, Dr Higgins told newsGP Editor Matt Woodley that her practice in Mackay, North Queensland, would have to effectively end bulk-billing for all patients, except for the most vulnerable.

“I’ve discussed [the payroll ruling] with all the GPs about what they want to do, because nobody feels comfortable just continuing as usual with our fingers crossed — least of all — me,” she said.

“[…] Especially for children, bulk-billing was something that was really important.

“I’ve had many discussions with a number of practice owners […] about what this means for us and whether we can comply with the conditions in the ruling — and it’s incredibly difficult.

“For example, we will lose the bulk-billing incentive if we stop bulk-billing our children, so we need to be able to compensate for that and then add the equivalent of probably five percent on top of our fee to account for the payroll tax.”

However, the Queensland Revenue Office announced an amnesty for contracted GPs on February 3, which will end on June 30, 2025. South Australia similarly announced that the amnesty period for payroll tax rulings would continue until June 30, 2024.

Dr Jill Tomlinson, president of AMA Victoria, added that the State Government payroll tax would negatively affect patients by making primary healthcare inaccessible and unaffordable.

“The tax completely wipes out the positive impact of the triple bulk-billing incentive announced in this year’s Federal Budget,” Dr Tomlinson said.

“Devastatingly, if the State Government doesn’t announce a payroll tax amnesty for general practices and if it doesn’t cease its application of retrospective payroll tax clawbacks on them, this will lead to the closure of some practices; something we are already starting to see.

“General practice is the most efficient part of our healthcare system, and the Victorian Government needs to get serious about supporting and investing in primary healthcare, rather than imposing new taxes on it.”

Do you think bulk-billing will be left in limbo and should NSW and Victoria announce an amnesty period? Let the team at Talking Aged Care know your thoughts.

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