Question Time

General Practitioner Payroll Tax

The Hon. D.J. SPEIRS (Black—Leader of the Opposition) (14:07): My question is to the Premier. How does the Premier respond to comments made by representative bodies on behalf of GPs in South Australia? With your leave, sir, and that of the house, I will explain.

Leave granted.

The Hon. D.J. SPEIRS: A Royal Australian College of General Practitioners poll found that 97 per cent of general practices will not be able to absorb the government's new payroll tax and that the tax would likely lead to patients paying around $15 out of pocket more per consultation.

The Hon. A. KOUTSANTONIS: Point of order, sir.

Members interjecting:

The SPEAKER: Order! There is a point of order from the member for West Torrens.

The Hon. A. Koutsantonis: Standing order 97: the member is attempting to introduce facts that he claims are facts into the question, and he should not do so.

The Hon. J.A.W. GARDNER: Point of order, sir.

Members interjecting:

The SPEAKER: Order! The member for Morialta wishes to address the Chair on the same point of order.

The Hon. J.A.W. GARDNER: The leader of the house may have missed that the house gave the leader leave to do just that.

The SPEAKER: That may be. The swiftest path to resolve the point of order is to give the leader the opportunity to ask the question again. It may be that there is a revised version of the purported facts which can be introduced with leave.

The Hon. D.J. SPEIRS: My question is to the Premier. How does the Premier respond to comments made by representative bodies on behalf of GPs in South Australia? With your leave, sir, and that of the house, I will explain.

Leave granted.

The Hon. D.J. SPEIRS: A Royal Australian College of General Practitioners poll found that 97 per cent of general practices will not be able to absorb the government's new payroll tax and that the tax would likely lead to patients paying around $15 out of pocket more per consult, to more general practice closures and to an increase in emergency wait times.

The Hon. S.C. MULLIGHAN (Lee—Treasurer) (14:09): I thank the Leader of the Opposition for his question and his engagement on this issue. I guess in summary what I could say up-front is the government's immediate response is to maintain our commitment to working with representatives of general practitioners to resolve this issue.

For several months now, I have been directly engaged with the Royal Australian College of GPs, their South Australian representative, to try to get a common understanding of this issue for them because I do think that still to this day amongst some GPs and amongst some representatives there is a misapprehension about what this issue is and what it may mean to general practitioners and also to their clinics.

Perhaps if I could provide just a brief bit of background so that members can be advised what sits behind this issue, in 2009 the Payroll Tax Act came into effect. That was basically a rewriting of the payroll tax legislation that did, amongst other things, a number of measures to ensure that states and territories had the same basis for levying payroll tax. States and territories, of course, still change their payroll tax rate and perhaps tax-free thresholds, but the basis on which payroll tax is levied was harmonised in the lead-up to that bill coming into effect on 1 July 2009.

This is not a new tax. This is something that has been required for employees working in businesses subject to payroll tax to pay for nearly 15 years. What has more recently come to light is that there have been a number of medical practices interstate that have tested the contractor provisions, as they are referred to, of the Payroll Tax Act to see whether practitioners within medical practices are liable for payroll tax, and that's been resolved on both occasions—firstly in New South Wales and then in Victoria—in favour of the state taxation authorities in those jurisdictions.

That has, I guess, reaffirmed the understanding amongst state revenue officers that payroll tax is to be applied to the wages of medical practitioners across these practices, and of course it has become clear that there are a number—in many cases, a large number, depending on the different jurisdictions—that haven't been paying these payroll tax arrangements.

The normal course of events would be that a revenue office—RevenueSA here in South Australia—would go back and review an organisation's payroll tax liabilities for the last five years, and if they deem noncompliance they would be charged those five years of back taxes and usually with penalty and interest. Of course, you can imagine—not just the pressure nationally that health services are under, but also GPs, and also the fact that we have just been through COVID over recent years—that would be a fairly unreasonable and onerous burden to place on GP practices.

In the early discussions with the royal college, I made the commitment that they won't be subject to that sort of regime. I also said that of course it would be unreasonable very quickly to impose it from day one or, perhaps for the benefit of a financial year, from 1 July this year, so we have also forgone applying it in this current financial year. We have continued discussions with the royal college about how we can bring GPs not only into a position where they understand what payroll tax is, and how it might apply to their specific arrangements, but also how they can start paying their tax, and we have set an implementation date from 1 July 2024.