Debate between doctors, Andrew Barr over payroll tax heats up

The claims have been made amid a heated debate with Chief Minister Andrew Barr who has doubled down on a move to only grant a payroll exemption to practices who bulk bill 65 per cent of all practices.

Mr Barr said the tax revenue to the government would be "minimal" and only a "handful" of medical practices would be required to pay it.

This suggestion has been disputed by general practitioners, who have said many practices would likely be affected.

In a media release announcing the policy, the government said: "The ACT government has been engaging with GPs, and their representative organisations, to assess the impact of payroll tax on the handful of general practices in the ACT that are above the $2 million tax free threshold. This number is less than 10."

But it has since been confirmed 10 healthcare practices are already registered for payroll tax. The tax is already applied to workers such as nurses, receptionists and some allied health staff.

East Canberra General Practice principal Clara Tuck Meng Soo said it was "misleading", suggesting 60 per cent of the population could be impacted.

Another general practitioner, YourGP practice owner John Deery, said it did not take much to reach the $2 million threshold.

"You only need four to five full-time equivalent GPs to get over the threshold of $2 million, so that means the payroll tax will be applicable to the majority of practices in Canberra," he said at a press conference this week.

But Mr Barr again hit out at doctor lobby groups this week, saying he was up for a "fair dinkum" conversation on how to increase bulk billing rates in the capital.

He accused the groups of basing their claims that appointments would increase by up to $20 on an incorrect application of payroll tax.

He said the groups had based this on payroll tax being applied to the first $2 million but he said taxes were only applied on wages paid above this level. He said analysis indicated the cost from the extra payroll tax would be $1 or $2 for appointments.

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"At no point have any of those organisations come in and said that they would never increase their fees again if GPs were given a payroll tax exemption in the future," Mr Barr told the Legislative Assembly.

"At no point has there been any suggestion that there would be any increase in bulk billing, even though every other state and territory is able to achieve that."

Mr Barr told the Assembly there were 31 local health areas across Australia and the only one that did not reach a 65 per cent bulk billing rate was the ACT.

Practices will be eligible for a payroll tax exemption for two years if they bulk bill 65 per cent of all practices.

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.

Primary Care Business Council director Jeremy Stones said several operators owned multiple clinics in Canberra and this would make it higher.

"The other component they have said is there is this $2 million threshold and that only applies to 10 clinics ... but what it ignores is that quite a number of practices are owned by corporate groups and basically that threshold applies across the group, not each individual clinic. Its impact is far more than 10," Mr Stones said.

Mr Stones said profit margins for general practices were low.

"Bulk billing now really would be unviable. Practice margins have fallen where essentially for the practice operator to bulk bill a normal patient it's essentially a break-even position right now. And with costs going up, it starts to become loss-making," he said.

"For all those reasons, this mandatory minimum of bulk billing it just doesn't work and the trend is not there."

ACT Opposition Leader Elizabeth Lee, who unsuccessfully attempted to bring forward a bill to completely exempt general practices from payroll tax, said the tax could impact thousands of Canberrans.

"Andrew Barr's insistence that fewer than 10 GP clinics would be impacted by his new tax has been heavily disputed and criticised by Canberra's GPs," she said.

"We have received clear advice that the number of clinics that will be affected in the ACT will be much higher than 10 and that it will have a huge impact on tens of thousands of Canberrans.

"Andrew Barr has not been upfront with Canberrans about the real and devastating consequences for the Canberra community."

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