ACT GPs to get payroll tax exemption if 65% of patients bulk billed

The territory government will introduce the measure in an attempt to curb the fallout from new rules requiring general medical practices to pay payroll tax.

General practices with a payroll of more than $2 million a year would be required to pay the tax from next month under the changes, which came about following a court ruling.

But practices eligible for payroll tax will receive an exemption until June 30 2025 if they are bulk billing 65 per cent of all patients.

Canberra has the lowest rate of bulk billing doctors in the nation; only 5.5 per cent of all practices offering bulk billing to all patients.

Doctors have warned the payroll tax could result in patients paying $15 more each appointment.

Chief Minister Andrew Barr said the measure would give general practices time to adapt, seek advice and align with payroll tax obligations.

"Our goal is to ensure that vital services, like healthcare, remain accessible. The temporary exemption allows medical practices to align with payroll tax requirements without the risk of unexpected retrospective assessments," he said.

"By offering this pathway, the ACT government aims to support businesses in achieving tax compliance while keeping the community's needs at the forefront of decision-making, including increasing healthcare accessibility and reducing cost of living."

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

But this changed after a NSW Supreme Court ruled general practitioners were subject to payroll tax. An appeal was thrown out in March.

The new payroll tax rules are set to come into effect from August 31. The court's ruling applied to all states, but NSW, South Australian and Queensland have introduced amnesty periods.

The Royal Australian College of General Practitioners said earlier this year general practice clinics had been receiving calls asking for payroll tax backpay.

The ACT government said it would waive any back pay acquired before June 30, 2023.

MORE A.C.T. POLITICS NEWS:

There are fewer than 10 general practices that would be eligible for payroll tax in the territory as a business. However, the ACT's opposition has said these are the larger clinics and this change would affect thousands of patients.

The Canberra Liberals have proposed to completely exempt general medical practices from payroll tax and have proposed to introduce a bill in the Legislative Assembly next week.

ACT Opposition Leader Elizabeth Lee on Friday revealed her plan to introduce a bill and called on the government to support it.

"It is up to Andrew Barr to step up and take leadership to provide certainty to our GPs, their clinics and patients and take this step to ensure that Canberrans aren't going to be paying more to access essential health care," she said.

But ACT Health Minister Rachel Stephen-Smith questioned whether the opposition would be able to do this.

"Well, firstly, it's very unclear how the Canberra Liberals think that they could introduce such a bill that would be in line with standing orders," she said.

"The standing orders for the Legislative Assembly are very clear that only a minister can introduce legislation that affects a tax or duty. So this is clearly a stunt from the Canberra Liberals."

Ms Lee said she believed the bill was in order because it was not designed to appropriate funds.

"Once again, the minister has failed to address the substance of the issue and provide clarity for GPs and cost of living relief for Canberrans who are doing it tough," she said.

"The ball still remains firmly in the Labor-Greens government's court to support my bill to ensure Canberrans are not paying up to $20 more to visit a GP."

Mr Barr was required to update the Assembly by the end of August on what the government would do about the payroll taxes.

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: