ACT govt payroll tax on GPs slammed by AMA's Dr Kerrie Aust, RACGP's Professor Charlotte Hespe

Australian Medical Association ACT president elect Dr Kerrie Aust, and Royal College of General Practitioners ACT/NSW president Professor Charlotte Hespe, want a meeting with the health minister to discuss a so-called "sick tax".

Some larger general practice clinics could be charged payroll tax and made to pay backpay from August 31.

Dr Aust and Dr Hespe said doctors would be forced to pass costs on to patients, with patients to pay $15 more each appointment.

The pair said they were left confused after a meeting with ACT Revenue, which they said has called up general practice clinics asking for backpay, and are now hoping to meet with politicians.

Historically medical practices did not pay payroll tax for doctors as they were considered contractors.

This changed after a NSW Supreme Court ruled that general practice clinics were subject to payroll tax for GPs.

South Australia and Queensland introduced amnesty periods before the tax would be imposed.

While the ACT payroll tax rate is the highest of all states and territories at 6.85 per cent, there is a higher threshold than other jurisdictions.

Employers have to pay more than $2 million in total taxable wages before being hit with the tax.

Payroll tax for contractors is expected to kick in if a practice has approximately three to four full-time GPs, the GP college said.

Some clinics already pay the tax on salaried staff.

The government does not intend to amend payroll tax rules, ACT Health Minister Rachel Stephen-Smith said in April.

"The payroll tax rules are quite clear and we don't have any intention of amending those," she said.

"We understand that GPs are under significant pressure in this country, and that's a national issue ... but asking states and territories to wear the cost by exempting a particular group of professionals from payroll tax is something we're not considering at this point."

It costs more to see a GP in the ACT than any other state or territory.

Only 5.5 per cent of ACT clinics bulk bill, and it costs an average patient $49.11 out of pocket to see a doctor for 15 minutes.

The ACT government was undercutting local doctors, Dr Aust said.

"It's incredibly frustrating to have the federal government supporting GPs through the recent federal budget and then see the ACT government effectively undercutting that support," she said.

The payroll tax "would be a complete disaster", Dr Hespe said.

"Canberrans already struggle with Australia's lowest rates of bulk billing, and highest out-of-pocket costs for care. This affects people on low incomes the most and puts pressure on hospitals," she said.

"Most practices today operate on very thin margins. If they suddenly face an extra payroll tax bill of hundreds of thousands of dollars, they'll be forced to pass the costs on to their patients, or they will have to close.

"It could also deter GPs from practising in the ACT at a time when we need to grow the workforce - demand for GPs in the ACT is forecast to increase 65 per cent by 2023."

City-based Hobart General Practice closed in April, saying it was not financially viable to continue operating.

General practitioners are charged a fee by clinics to use consulting rooms.

The GP lobby group says doctors are forced to charge patients out-of-pocket because Medicare rebates, which are set by the federal government, have not kept up with inflation.

In a 2022 RACGP video for international media graduates, Dr Seshu Boda said that general practitioners earn "anywhere between $200,000 to $350,000 [a year]."

In 2018-19, an average Australian GP made a median taxable income of $138,259 year, tax data shows.

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According to the GP college's billing calculator, a bulk-billing GP who works 35 hours a week, has three patients per hour, four weeks' holiday a year and is charged a 40 per cent fee by a clinic, would earn about $124,589 pre-tax each year.

The medicare rebate for a session with a general practitioner lasting less than 20 minutes is $41.20.

On average, Canberrans pay $49.11 out of pocket per GP appointment.

A GP charging that rate with the same working conditions as above would make about $273,000 a year before tax, according to the calculator.

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