NSW to rebate payroll tax, waive debts in $189m GP bulk-billing push
The Australian-first initiative is expected to end the uncertainty for contractor doctors and make appointments cheaper for patients.
The NSW government will give payroll tax rebates to GP clinics and be the first state in Australia to issue a full retrospective waiver for past liabilities in a $189 million effort to address a “freefall” in bulk-billing rates.
The government said its Bulk-Billing Support Initiative, announced as part of the state budget on Tuesday, was expected to end the uncertainty over the applicability of payroll tax on contractor GPs and reduce financial pressures on patients and practices.
“The Minns Labor government will invest an estimated $189 million in a bulk billing initiative to ensure the cost of seeing a GP remains accessible for people across NSW,” it said in a statement.
“This initiative will protect bulk billing rates by reducing financial pressures on GP practices so they don’t pass on additional costs to patients and will save clinics from closure.”
The government said the payroll tax rebate would be available on an ongoing basis for contractor GPs at clinics that met bulk-billing thresholds: at least 80 per cent in metropolitan Sydney and above 70 per cent in the rest of the state.
The retrospective waiver would apply for past unpaid payroll tax for contractor GP wages up to 4 September 2024, it said.
Treasurer Daniel Mookhey said the initiative was developed in consultation with the Royal Australian College of General Practitioners (RACGP) and Australian Medical Association (AMA) during an amnesty on payroll tax audits in September 2023.
The amnesty was issued in response to a NSW Court of Appeal ruling earlier in the year, which confirmed independent practitioners counted as employees and created millions in retrospective payroll tax bill liabilities.
Mookhey said the new initiative would improve the cost of healthcare by stemming the “freefall” in bulk-billing rates.
He said that a recent government survey found 48 per cent of adults were cutting back on healthcare appointments due to affordability and 72 per cent were “quite concerned” or “extremely concerned” about the cost of healthcare.
AMA NSW president Michael Bonning welcomed the investment.
“AMA NSW welcomes the decision by the NSW Minns government to legislate to guarantee no retrospective payroll tax liability for general practice,” he said. “The Minns government will be the first state to offer this guarantee in legislation.”
“General practice continues to struggle with decades of underfunding from the previous Commonwealth government.”
RACGP NSW & ACT chair Rebekah Hoffman said the initiative prevented the “devastating” impact the retrospective tax would have caused NSW practices, patients and the state’s health system.
“The RACGP applauds the NSW Government exempting GPs from retrospective payroll tax,” she said.
“This gives GPs across NSW certainty that they can continue to operate and keep their doors open for patients, without fear of being hit with a huge tax bill that will shut them down.”
The Bulk Billing Support Initiative was expected to cost $188.8 million over four years, according to budget papers. The net impact on payroll tax receipts would be a $8.7 million reduction in 2024-25 and $31.1 million over the four years to 2027-28.
Other measures announced in the budget included the building of 30,000 homes, with $5.1 billion pledged towards 8,400 public housing dwellings, and $22 billion allocated to public transport.
Despite a $10.7 billion revenue windfall caused by increased property taxes, federal funding and coal prices, the government said a loss of GST revenue meant a deficit of $3.6 billion would be forecast in 2024-25, compared to the $475 million surplus predicted in September.
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