Opposition leader Elizabeth Lee will call on the ACT Government today to exempt general practice from a new interpretation of payroll tax that applies to contractor GPs, which local doctors warn could lead to practices closing.

“Local GPs have made it very clear that they will have no option but to raise their fees as a result of this tax, with some even concerned they may not be able to keep their doors open,” Ms Lee said.

A new interpretation of payroll tax considers GPs as employees rather than as contractors, following a NSW court decision.

To address the impact of payroll tax on general practice (GP) medical centres, the ACT Government announced in August that it would waive payroll tax liabilities until June; extend time for compliance until 2025; and introduce exemptions until June 2025 for health care businesses that bulk bill 65 per cent of their patients. The government states that most small and medium-sized businesses, including most GP healthcare centres, fall below this threshold, and will not be liable for any payroll tax.

But Ms Lee said that since Chief Minister Andrew Barr‘s announcement the government would enforce the tax on GP clinics, many local GPs and stakeholders had raised significant concerns about the impact this tax would have on primary healthcare in the ACT.

The Royal Australian College of General Practitioners (RACGP) and the AMA ACT are concerned that Canberra doctors could be forced to charge patients more (perhaps by up to $20 a consultation) or close their clinics if the ACT Government introduces such a payroll tax.

Health minister Rachel Stephen-Smith has dismissed these concerns, saying the implications had been “grossly exaggerated”; the RACGP and opposition had misunderstood how payroll tax worked.

“Canberra already has the lowest number of GPs per capita in the country, and losing any of our GPs will place even more pressure on our failing hospital system,” Ms Lee said.

“It is astounding that the Chief Minister firstly refused to properly consult with local GPs about the impacts of this tax and then issued a threat that he will only exempt them from this tax if they bulk-bill 65 per cent of patients.

“As stated by many GP clinic owners, as well as the Australian Medical Association and Royal Australian Colleague of General Practitioners, this is not practical and would lead to clinics closing their doors.”

The RACGP and the AMA ACT have said it would not be possible to bulk bill 65 per cent of patients and stay financially viable, even with the triple bulk incentives, which are only applied to pensioners, children and healthcare card holders. “The ACT Government’s policy is out of step with other jurisdictions and will not encourage GPs to work in the ACT, it will have quite the opposite effect,” they said. They have called on the government “to come back to the table to consult with GPs and find a real solution before it’s too late”.

Likewise, AMA ACT president Dr Walter Abhayaratna said this week that “the Barr government’s decision to impose a new payroll tax on GPs is the latest assault on a primary care sector already on its knees”.

“Unfortunately, all the evidence points to GP access problems getting worse in Canberra, right at the time when chronic disease rates are rising with our ageing population,” Dr Abhayaratna said. “Into this setting, the ACT Government has lobbed its payroll tax grenade…

“The ACT Government should be frantically trying to stimulate general practice in the territory, knowing GP-led care is vastly more efficient than caring for patients in hospital, where the cost of care is exponentially greater per occasion of service. Instead, it is bent on a policy that will make the ACT one of the least favourable places in Australia to practice as a GP.”

Ms Lee quoted the following remarks by local GPs, practice owners, and practice staff:

• “So, I don’t think that there will be any choice for me but to impose a new payroll tax levy on the patients in my practice. The only question is exactly how large a levy we impose and when we put it in place.”
• “The ACT Government’s new tax is a tax on patients. GPs will have no choice but to raise their fees…”
• “The ACT Government’s decision to impose additional payroll tax on GPs has left many worrying how they will keep their doors open…”
•  “GPs are forced to choose between their conscience and their income in a way no high-minded politician or public servant has to do.”
• “There are 10 practices currently paying it but a majority of practices will be paying it if GP payments are included in the figures that make us liable for payroll tax.”
• “I urge Mr Barr to meet with practice managers and owners, like me, in order for him to understand that his figure of 65 per cent bulk-billing is not achievable for my practice. If mandated to do this, our practice would most likely close down.”
• “I have it on good assurance that many GPs are so distressed by developments that they are looking at leaving the profession, or altering their workloads.”
• “It will be absolutely devastating for the community if one of their local practices are forced to close, and GPs leave town…”
• “While GPs are strongly committed to ensuring equitable access to healthcare, the introduction of a new tax for General Practices will inevitably limit their ability to provide healthcare services at a reduced cost through bulk billing. This means that some people are unable to see their GP because they cannot be bulk billed.”
• “Thousands of ACT patients will be affected by the new tax. In meeting after meeting, GPs have been telling the ACT Government exactly this.”
• “The idea from Mr Barr that GPs ‘lack motivation’ to do anything, let alone bulk bill is absolutely outrageous. The amount of extra labour we do at no cost to the patient or the state and federal government should be commended. Mr Barr’s rhetoric is ill-intentioned, ill-judged and continues to damage morale.”

“Instead of listening to the pleas of our hardworking GPs, Andrew Barr has accused them of making ‘wild accusations’ to try to ‘minimise tax’ and chastised them for a ‘lack of ambition in relation to bulk billing,” Ms Lee said.

Ms Lee promised that if elected in October 2024, the Canberra Liberals would abolish this tax to ensure local GPs can continue delivering high-quality essential healthcare to all Canberrans.

“This government will stop at nothing to avoid scrutiny and transparency of its decisions and actions highlighted by every member of Labor and the Greens voting to throw out my bill late last month to exempt GPs on a contract from this tax,” Ms Lee said.

“It is clear Andrew Barr along with all Labor and Greens members do not want to have this debate and explain why during a cost-of-living crisis they want to make it more expensive to visit a GP whilst at the same time putting more pressure on our hospitals.

“This is a chance for the Labor-Greens government to listen to GPs, listen to the community, and exempt GPs from this tax.”