Motions

General Practitioner Payroll Tax

The Hon. C. BONAROS (16:01): I move:

That this council—

1. Recognises the significant impact that the cessation of the payroll tax amnesty for independent general practitioners will have on South Australians;

2. Acknowledges that the discontinuation of the amnesty threatens to exacerbate existing workforce challenges and reduce access to essential healthcare services for many South Australians;

3. Acknowledges the potential consequences of an average fee increase of $12 per standard consultation comes at a time of heightened cost-of-living concerns, further burdening individuals and families;

4. Recognises that such a financial strain may drive patients towards already overcrowded emergency departments, or deter them from seeking health care altogether; and

5. Calls upon the Malinauskas government to extend the amnesty until 30 June 2025 and pause any retrospective payroll tax bills for independent general practitioners to facilitate meaningful consultation with stakeholders to collaboratively work towards a long-term solution that prioritises the wellbeing of South Australians.

The imposition of payroll tax on the wages of independent general practitioners is not merely a bureaucratic measure, it is a decision that could exacerbate the existing healthcare crisis and place an insurmountable burden on both practitioners and patients alike.

I know that our Treasurer would try to convince us that that is not the case but I respectfully disagree, as does probably every person who has looked at this from their perspective. We are all too familiar with the challenges that plague our healthcare sector. If you are not in this state and familiar with them then the only explanation is that you have been living under a rock because I cannot think of a single household that I have spoken to that has not been impacted in one way or another by the healthcare crisis.

The recent report by the Royal Australian College of General Practitioners, entitled General Practice: Health of the Nation 2023, has shed light on the dire circumstances faced by our GPs. Burnout, shortages, chronic underfunding and overwhelming workloads have become the norm. More GPs are contemplating premature retirements, further straining an already stretched system.

I note that, as a specialty, the selection of GP has fallen from something like 50 per cent in this state to around 11 to 13 per cent. Those doctors who are choosing different specialties are not doing that because they are not interested in being GPs. The frank reality is they are saying to themselves, 'Why on earth would I choose general practice as my specialty and take everything on board that comes with that?'

That is an alarming statistic, which has been presented in various forums in this place and committees and publicly as well, but we know we are now at the point where we are crying out for general practice specialists and, I suppose from the doctors' perspectives or from the association's perspectives, not doing enough to ensure that our doctors choose general practice as their specialty as they are lured towards more favourable specialties instead.

More GPs, as I said, are contemplating retirement. That is also impacting those statistics that I have pointed to, and they are not doing so simply because they want to sail off into the sunset after a lifetime of work. Frankly, anecdotally at least, the evidence coming from those GPs is that working in what has been a broken system for a very long time has taken its toll on them.

Amidst this turmoil, the looming imposition of payroll tax is only adding fuel to the fire. The lack of clarity and consistency in how each state and territory is approaching this issue has only compounded the confusion within the general practice community. We have statistics from the RACGP that reveal nine out of 10 Australians rely on GPs for their healthcare needs annually. The imposition of payroll tax adds yet another barrier between patients and the care they require.

Make no mistake, the true impact of the South Australian government to end the amnesty will reverberate through our communities. The Treasurer might question, but I am certainly not questioning, that there is likely to be an average fee increase of $12 on a standard consultation. That may seem trivial to us on paper, but for many it could mean the difference between seeking timely medical attention and ignoring potential health concerns until they escalate into emergencies. It will inevitably result in increased presentations to what we know are already overflowing emergency departments across the state.

We find ourselves in a cost-of-living crisis, where every dollar matters to individuals and families. We spend hours upon hours in this place speaking about that cost-of-living crisis. The imposition of payroll tax will not only exacerbate their financial burdens but it will further widen the gap between those who can afford health care and those who cannot. We already know that people are leaving private health insurance in droves because they can no longer afford it.

This motion is calling for a pause on retrospective payroll tax bills for independent GPs, coupled with an extension of the amnesty to allow discussions to take place. In an ideal world, independent GPs should not be subjected to payroll tax on their earnings, but of course we have these interstate rulings. The government has now had a whiff of a new revenue stream, which may prove difficult to stop altogether.

I will say also that I am offended at the suggestion that these rulings have taken place in other states and that we do not have an option and we have to adopt them here and that we have been generous enough to offer an amnesty to doctors and there are a great deal of doctors who have signed up to that amnesty. They have signed up to that amnesty because the alternative is having to pay back payroll tax over five years retrospectively, which they know they simply cannot afford to do. It is almost like putting a gun to their head and saying, 'Sign up to the amnesty and be liable from 1 July or do not sign up and be liable retrospectively.'

Make no mistake, the person who is going to pay that payroll tax bill is you and me—it is everybody in this place who visits a doctor and will now have to fork out an extra $12 or $15 for that visit because it is unrealistic to expect that those GP practices can keep absorbing costs.

When it comes to payroll tax generally, we know there is an issue, and it is an issue that I raised in a motion in this place that in due course I will bring to a vote. It is not just GPs who are being impacted by these determinations that are made in another jurisdiction; it is the entire allied health sector. I have had physios come and speak to me, dentists come and speak to me, specialists come and speak to me. Every medical group in the allied health profession is impacted by these determinations.

Frankly, it is hard to describe them as anything other than a cash grab. This is not money that the government intended to get as a result of payroll tax—and we get $1.7 billion a year in payroll tax in this jurisdiction. Over the forward estimates that figure is expected to grow to $1.97 billion. That is $5 million a day that we are making in this state from payroll tax. Now we are getting another windfall gain as a result of these determinations. That is going to see that number increase at the expense of whom? At the expense of employment, of businesses being more viable and practices like our GPs having to somehow find a way and a means of absorbing these extra costs in the midst of what we all know is a cost-of-living crisis.

It is extraordinary that the Treasurer would suggest the determinations have been made and we cannot do anything about them. WA and Queensland found something to do about them. They have absolutely found a way to do something about them. In one jurisdiction, they have said, 'We are going to sit tight because we know one thing for sure: this is giving rise to legal challenges.' Those legal challenges that are on foot we know are going to take two or three years. So, if in the event of two or three years down the track these challenges are, for whatever reason, found to be valid, I cannot see a day when the Treasurer is going to say, 'I am really sorry. We are going to retrospectively now refund all that money to you.'

What we have said and what we are pleading for this government to do is pause, take a moment to breathe, like they have done in WA, and extend this out until June next year to allow enough time to have reasonable discussions with the medical fraternity and GPs in particular, and everyone else who is impacted by this, about the impact it is going to have, because ultimately it is us who are going to wear the costs.

I know that governments and successive governments are absolutely addicted to that quick fix of money that makes its way into their coffers, but at the expense of whom? What is clear from everything that has been provided to us is that, in this instance, it is going to come at the expense of our healthcare system and those individuals who are seeking health care. You would be an absolute fool to think or even to imply, which is what the Treasurer has done, that this is unlikely to have an impact on our ramping and emergency departments and health care overall. That is a foolish and cheeky thing to say when we know that absolutely everything we do right now is dire in terms of keeping the strain as much as we can off our EDs and off the ramping crisis.

If I were a GP, I would be offended at comments from anyone in this place who suggests that this is not likely to have an impact. The only thing that is likely to happen, the only thing that is going to happen or is guaranteed to happen as a result of this is the lining of the coffers of state government budgets at the expense of the community. That is guaranteed, and no Treasurer can stand in this place and guarantee that this is not going to result in an increase to your bill at your GP. No-one can guarantee that this is not going to have an impact on the healthcare crisis. No-one can guarantee that this is not going to have an impact on emergency department presentations.

In fact, according to figures that have been received—I have these figures here and I will quote them for the record because I think it is important that people know this—a HotDoc survey of more than 1,800 patients about the likely impact of payroll tax changes on attendance revealed that more than one in a quarter, that is 28 per cent, would see their GP less frequently if fees increased, with 7 per cent saying they would stop going altogether, and 4 per cent of patients saying they would attend, guess where, an emergency department. That is where they would attend: an emergency department.

We have further results from that survey showing that margins within general practice are extremely tight, with an average of 5 per cent. Practices cannot absorb the extra cost, the extra tax—a tax that was unanticipated by this state government. Therefore, the cost will need to be passed on to patients, with an average fee increase of $12, as I said, and the average out-of-pocket fee in Greater Adelaide increasing to about $50-odd from $38, during a cost-of-living crisis.

The correspondence we have notes that in 2021-22, there were over 12 million attendances to GPs in SA. If 4 per cent of those attended an ED, an emergency department, the cost to the taxpayer would be approximately $288 million. There would be even further pressure on our emergency departments, and the ramping crisis would worsen. It is expected that that $288 million will translate to something like 468,000 additional presentations to our EDs.

I do not know how any Treasurer could stand and look the public in the eye or get on the radio or on TV and say, 'It is unlikely that this will impact our health crisis.' I do not know who we think we are kidding, but I can guarantee you that GPs are very worried, and they are worried for good reason. It is not enough to say, 'Well, they're doctors. They can absorb this. They have had an amnesty; 250 of them have signed up to the amnesty. They had their chance to not have to pay this retrospectively.'

That is not good enough, because the associations that are representing their members know what will happen ultimately if this proposal goes ahead. They are not asking for the world. They are saying, 'Give us more time, government, to negotiate with you. Give us more time to find another solution. Pause, so that we can see what the other states are doing.' It is also false to suggest, as has been suggested, that we are just falling into line with the other jurisdictions, because we are not falling into line with Queensland and we are not falling into line with WA.

WA has taken on board the concerns that have been raised and has said, 'You know what, we're going to sit back, take a breath, and pause this for another year so that we can see what the knock-on effects will be and what the challenges to these determinations are likely to result in.' That is what other jurisdictions are, in fact, doing, and it is what our doctors here—the AMA and the RACGP—have asked this government to do. It is not enough to just say, 'We have given you an amnesty. Your time is nearly up. We have to keep moving.' That does not cut it.

If there is one thing that we have learnt, or we should have learnt by now, it is that short-term fix ultimately costs the community a lot more than anything we have managed to get in terms of a windfall gain as a result of implementing something that is so uncertain. We also know from that same survey that in Greater Adelaide only 11.4 per cent of standard GP consultations are bulk billed, compared with a national average of 28.7 per cent in cities. Bulk billing will become even harder to access, as it will become financially unviable for that 11.4 per cent who are able to offer it now.

We know that 16.5 per cent of GP clinics have indicated they are likely to close, which equates to 57 clinics in the Greater Adelaide area. These are all based on surveys that have been undertaken, and the results of which we have. We know that there is a survey from the RACGP which shows that 35 per cent of GPs would consider moving interstate. Imagine that—they are going to pack up from Adelaide and move interstate. They will probably move to WA or Queensland for a favourable payroll tax setting.

South Australia will become the less favourable jurisdiction for GPs and this of course will exacerbate the one thing that we are all talking about in here being hellbent on fixing and that is workforce shortages. The letter that I have is co-signed not just by the RACGP but the Rural Doctors' Association of South Australia, the ACRRM, PMASA, the AMA, the Chinese Medical Association of South Australia, ACMA and Primary Health Care GP Committee and the Primary Care Business Council (PCBC).

It is not an unreasonable ask. They are not saying, 'We don't expect anything to come of this.' What they are saying is, 'Can we please have some more time to negotiate this with the government?' They are not the only ones. I can guarantee you they are not the only ones asking for this pause, because if you think this is going to stop at the allied health professions, you are very mistaken. I know that the Treasurer is well aware that it is not going to stop at the allied health professions, but I appreciate the subject of this motion in particular.

I have comments here about those figures that I referred to including the 486,000 additional presentations to ED likely to result in a cost blowout to the budget of $268-odd million. Dr Ben Hurst, Chief Executive Officer of HotDoc has stated:

The State Government has introduced a patient tax at a time when households are enduring sustained cost of living pressures, with many families already finding it difficult to pay for everyday essentials such as groceries, petrol and utilities.

HotDoc is fearful many families, especially those that are socio-economically disadvantaged, will forego seeking care from their GP and load up the emergency departments at hospitals at a time when they are already over burdened and under staffed.

This financial cost of the application of payroll tax on medical clinics will eat into the Federal Government's recent Medicare incentive that was aimed at tripling the incentives paid to doctors for bulk billing vulnerable patients…It will put at risk Medicare funded doctors' visits for children, concession holders and pensioners.

We have a further quote from RACGP's chair, Dr Goodson, who states:

The data from HotDoc supports our concerns that the SA government patient tax—

and that is what it is—

on general practice will lead to unsustainable pressure on our emergency departments, which will inevitably cause a further worsening of ramping in our state. General practice is the most efficient part of our health system and GPs keep people out of hospitals. Why would a government elected on a health agenda make access to GPs more expensive and difficult for South Australians?

That is a question we are all asking ourselves too. Why indeed would they do that for a short-term fix, a short-term hit of payroll tax that they never foresaw they were going to receive, because that is how this situation arose?

In WA, as I said, the RACGP in that jurisdiction has managed to secure an important confirmation that the Western Australian government does not intend to change the way its existing payroll tax provisions apply to general practice. So that jurisdiction has looked at these determinations and they have come up with apparently what we cannot come up with, that is, a different answer. We have been told, 'The horse has bolted. The determination has been made. It is going to apply in every jurisdiction,' but we have an ironclad guarantee in WA that that is not going to be the case in that jurisdiction.

We have a Queensland example before us, which is going to deal with this situation differently as well. In that jurisdiction, we will have until 2025 to review arrangements around payroll tax and then make voluntary disclosures in line with what we have done, so basically an amnesty, which extends for at least a year longer than it does in South Australia.

Five years of retrospective payroll tax is an extraordinary imposition on any business. Expecting any business to be able to absorb five years' worth of payroll tax because you have shifted the goalposts and found another way to increase your payroll tax liability is going to have an extraordinary effect on every business, whether it be a GP or a dentist or a physio, that is captured by these changes.

I note that in my office I have had discussions not just with GPs and the medical fraternity specifically but also physios. I have correspondence from physios who are equally impacted and concerned about the changes. I know that, just based on discussions I have had with a physio clinic operating in South Australia, which has done its due diligence and looked at what this would cost them, that they have gone to their accountants who have said, 'Well, that's going to cost you an extra $170,000.'

I am talking about physio practices that have just come out of COVID and managed to pay off their overdrafts as a result of what was a very difficult time and get back on the front foot, only to learn now that they are going to have a retrospective payroll tax worth over $150,000 added to their payroll tax liabilities. How on earth we can expect businesses to absorb those sorts of figures is beyond my comprehension. Payroll tax is, frankly, beyond my comprehension. The fact that we tax businesses for employing more people and creating more economic activity is beyond my comprehension, but that is another issue altogether.

I will remind honourable members again that $1.7 billion a year is what businesses today are contributing to payroll tax in this jurisdiction. That figure is already forecast to grow to just shy of $2 billion. These determinations will see that figure grow even further. That is $5 million a day that every business in this state is paying in payroll tax in this jurisdiction.

Doctors are saying that if something does not happen here, if something does not give, it is patients who will ultimately have to foot the bill and pay for that patient tax because general practices simply cannot afford to absorb that cost. We are already on our knees. We are already being squeezed as hard as we can be squeezed. Any incentives that have been given to us by the feds are likely to be done away with, and what we are asking or pleading the government to give us is a further reprieve so we can work through this issue logically and reasonably.

In what universe that is too much of an ask, I do not know, but I certainly indicate my full support to those who have taken this issue on, particularly the RACGP and the AMA, which are trying their level best to ensure above everything else—because this is the part that gets lost in this debate the most—that this patient tax does not have a negative impact on our health crisis. We still have a health crisis in this jurisdiction. We still have a ramping crisis in this jurisdiction. We still have an emergency department crisis in this jurisdiction. This measure that the government is proposing, which they say there is no solution to, is going to exacerbate those crises.

I note in closing that my colleague the Hon. Rob Simms has introduced a different motion on the same issue, and I am sure he will speak to it more from a cost-of-living pressure type front. I thank the Hon. Rob Simms for getting on board with this issue, as I am sure the RACGP and others do. I am really looking forward to considering the issue of payroll tax overall in this jurisdiction through an inquiry into payroll tax, which is already on the Notice Paper and which I know these same bodies that have reached out, certainly to me, about this issue are keen to see get off the ground, because they would like a reasonable and rational discussion about how we deal with payroll tax in this jurisdiction. With those words, I commend the motion to the chamber.

Debate adjourned on motion of Hon. I.K. Hunter.