General Practitioner Payroll Tax

Mrs HURN (Schubert) (14:13): My question is to the Minister for Health and Wellbeing. What impact will proposed GP payroll tax changes have on emergency departments and ramping in South Australia? With your leave, sir, and that of the house, I will explain.

Leave granted.

Mrs HURN: The AMA has stated that as a result of the new GP payroll tax treatment that 'if practices are forced to close, patients will have no choice but to look to emergency departments for treatment and care' they need.

The Hon. S.C. MULLIGHAN (Lee—Treasurer) (14:13): Well, I guess I reiterate: there are no payroll tax changes. There's no legislative change. There's no regulatory change. Nothing changes, except for the realisation that a number of—

Mr Cowdrey: Nothing to see here. Nothing has changed.

The SPEAKER: Order!

The Hon. S.C. MULLIGHAN: Well, I'm glad that the member for Colton is finally engaging on the issue. It's the first syllable we have heard from him as shadow treasurer about this.

Mr Cowdrey: I asked you a question about this seven months ago.

The SPEAKER: Order!

The Hon. S.C. MULLIGHAN: It has always been left up to the true front bench members—

Mr Cowdrey: Nothing to see here.

The SPEAKER: Order, member for Colton!

The Hon. S.C. MULLIGHAN: It has always been left up to the true front bench of those opposite, not the member for Colton. As I was explaining to those who have steadfastly remained ignorant on this issue—

Members interjecting:

The SPEAKER: Order! Member for Morialta! The Treasurer has the call.

The Hon. S.C. MULLIGHAN: Such are the burdens of majority. Yes, I understand that, deputy leader. As I was explaining to those opposite, this is not a new impost. This is not a result of taxation changes. This is about assisting a group to come into compliance with their longstanding tax obligations.

I have had a lengthy discussion with the AMA, including their president, Dr John Williams, and what became clear to me, amongst other things during the course of that discussion, is that there is a lot of misapprehension and a misunderstanding about what payroll tax is, how it's applied, and what the impact of that would be on a GP, let alone a broader practice.

That is why we have been spending months working through the representative organisation for GPs, the Royal Australian College of General Practitioners, to discuss and mutually understand the issue and then design a process by which they have plenty of time and a runway of activity in order to manage this issue, so that those sorts of issues that some people in the AMA are worried about don't come to fruition.

Members interjecting:

The SPEAKER: Order! The Treasurer has the call.

The Hon. S.C. MULLIGHAN: I don't accept the fact that the characterisations of this, from time to time, by some people in the profession are accurate. Let me give you an example. During the course of that discussion, there was a concern that the payroll tax might apply to all of the billables of a practice, all of the money that gets paid either by a patient and/or by the Medicare Benefits Schedule.

That is simply wrong. That is not the case. That is not how payroll tax is applied. It's not applied to the revenue of a business. It's not applied to the turnover of a business. It's not applied to the operational expenses of a business. Instead, it's only applied to the eligible wages of a business and, even then, it doesn't apply to all of the wages. It only applies to the wages above the payroll tax tax-free threshold.

Once you understand that it doesn't apply in the way in which many GPs have immediately understood payroll tax to apply to them, then you can understand why the contention that GPs will immediately resign or retire or close their practices is unlikely to eventuate—because the conception about how the tax applies does not marry up to how the legislation is drafted and how it will apply to their business.