Legislative Council: Wednesday, April 10, 2024



General Practitioner Payroll Tax

Adjourned debate on motion of Hon. C. Bonaros:

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.

(Continued from 20 March 2024.)

The Hon. S.L. GAME (17:13): I rise in support of the honourable member's motion calling on the government to extend the amnesty on payroll tax for independent general practitioners. These costs are passed on to patients, and it is alarming to think that people in need of medical attention will be discouraged from attending a local GP due to increasing cost. These patients are going to end up in our already at breaking point emergency departments.

Despite the Premier's promise to fix ramping, it is now worse than ever, and the government is clearly not doing enough. Ruling out payroll tax on patients' fees paid directly to GPs for their services will encourage more patients to attend a doctor's surgery, easing the burden on emergency departments. The government must find ways to ease this cost-of-living crisis and ensure South Australians can afford to see their doctor. I commend the motion.

The Hon. R.A. SIMMS (17:14): I move the amendment standing in my name:

Paragraph 4

Leave out 'and'

After paragraph 4, insert new paragraphs as follows:

4A. Notes that the Queensland Government has provided a payroll tax ruling clarifying that patients' fees paid directly to a medical practitioner for their services would not be subject to payroll tax; and

The Greens are supportive of the motion being advanced by the Hon. Connie Bonaros with the amendment that has been circulated. We are in an unusual situation where we have two members putting forward a motion on a topic that is important, and I think it does demonstrate the interest in this matter that two members of parliament from different political parties have sought to focus on the issue.

I spoke at length about the reasons for the Greens putting forward our motion during the last sitting. I do think it is really concerning that in the middle of a cost-of-living crisis we could see South Australians being priced out of seeing a GP but also being priced out of seeing other health professionals. We know at a time when we have record ramping here in our state that there is already a significant burden being placed on our hospital system, and if people do not go to see a doctor, they end up finding their way into our emergency system.

What we should be doing is focusing on preventative health, investing in our GPs, investing in our dentists, investing in our physiotherapists and investing in our mental health workers so that people's health issues do not become acute, and they do not find themselves in a situation where they need to go to a hospital and put increased pressure on our hospital system.

We are supportive of the motion. We urge the government to take this up. We are heading into our budget process at the moment in South Australia and really the Malinauskas government needs to listen to the community, listen to the concerns of the crossbench, listen to the concerns of the opposition and take action on this because we cannot afford in the middle of a cost-of-living crisis to see South Australians being forced out of seeing a healthcare professional. It is just simply unacceptable, and I urge the government to heed the message of this motion.

The Hon. H.M. GIROLAMO (17:18): I rise to speak in support of the motion of the Hon. Connie Bonaros, which recognises the significant impact that the looming possible changes to how payroll tax is treated for GPs and their practices will make on how primary health care is sought and delivered in South Australia.

I note that the Hon. Robert Simms has a similar motion which also recognises the campaigns of the Royal Australian College of GPs in South Australia to stop the government's application of payroll tax to contract GPs at practices across South Australia. I also note that the Hon. Robert Simms has inserted amendments to this motion, and we the opposition support those amendments. We will also support his motion if it does come to a vote today.

Should how payroll tax is treated for contract GPs be changed in South Australia, the Royal College of GPs has forecast that this would result in an increase of costs for seeing GPs in South Australia. Further to that, there is a simple correlation between increased costs for the community in a cost-of-living crisis, and a health crisis as well, and the impact this would have on people in need of medical attention—they may inundate emergency departments, taking up the already precious time of our frontline workers and possibly beds at our already bottlenecked hospitals across the state.

If the cost of running a GP practice increases, the cost to see your GP will increase as a result. This government cannot guarantee that, if they pursue this tax treatment, costs will not increase. The platform HotDoc, which enables patients to book in-person and telehealth appointments, has released figures that show that 95 per cent of clinics are planning to increase their patient fees by an average of $12 per appointment in response to the payroll tax. Further, and more devastatingly, only 28 per cent of patients would continue to see their regular GP, or would see them on a less regular basis if fees increase.

As Chair of the Budget and Finance Committee, I and other members of the committee have asked both Treasury officials and health department officials what modelling they have done, either as to the potential impact on the budget or, in the case of Health, what impact it would cause the community at their most vulnerable and in need of a GP to instead turn to emergency departments rather than seeing their GP.

This government has taken no action as to the potential impact, either from a budget perspective or, more importantly, what it means for our community and their access to GPs. More than that, this will ultimately exacerbate the problem that was the core promise of the Labor government: to fix ramping. Peter Malinauskas said on multiple occasions during the election campaign that they would fix the ramping crisis. If people cannot afford to go to their GP when they initially should, they will end up going to the ED inappropriately or end up there eventually, when a visit to the GP could have solved their issue earlier before it became worse and resulted in emergency care.

Already, the ramping hours lost in this state are at record highs and are only worse under this government every single month. In February, ambulances spent more than 3,700 hours waiting with patients outside of hospitals—that is more than 2,200 hours higher than the 1,520 hours recorded in February 2022. Ramping in this state is not getting any better.

Since the Labor Party came to power, and without having to deal with the global pandemic, as the former government had to do, this Labor government has overseen the 22 worst months of ramping in South Australia's history—and it is only getting worse. These are real people affected by the runaway ramping record of those opposite, enduring more than 86,000 hours since Labor was elected on a sole promise of fixing ramping.

I would like to tell you how I became aware of this issue back in March last year. At a listening post that I hosted with the Leader of the Opposition from the other place, the member for Black, we were approached by a local GP who raised this important issue that had come to light on the back of legal proceedings in New South Wales.

Along with the health team, the member for Schubert, the member for Frome and the member for Colton as the shadow treasurer, we have been advocating on behalf of concerned GPs for what it means for them as small business owners but, more importantly, their concerns for their patients ever since last March. The opposition has been asking questions and raising this issue in question time in the other place, but more than a year on other members of this place are also raising this concern. That is why we are in full support of this motion today.

In my preparation for this sitting week I reflected on what I have been able to do in this space since this issue was raised. I was able to write to the Treasurer last year, with that correspondence to the Treasurer highlighting this issue, and the amnesty was bought in. I believe that the amnesty was the right thing to do. Unfortunately, this has only two months remaining and we need to see the amnesty extended, and we also need to ensure that measures such those that have been done in Queensland are investigated further.

We are in lock step with the Royal College of GPs on this. In Queensland, the Queensland Treasury is contemplating how to apply these new laws, which I think are very important and need to be looked into further. This issue has not been finalised and, as we call for the amnesty to be extended, there is not a need for this government to rush the implementation of this burden onto GP practices through the changes in this payroll tax. An extension and investigation into Queensland would be best for not only GP practices but also the many patients right across this great state. I commend this motion.

The Hon. B.R. HOOD (17:25): I rise to briefly add some remarks in support of this motion and echo the concerns of the honourable mover, and to also note that I support the amendments of the Hon. Rob Simms, should his motion also come before the house today. Great minds think alike, the Hon. Rob Simms—I think they were the words you were looking for.

In this current economic climate, any policy change that will result in an increase in the cost of delivering primary healthcare services cannot logically be pursued. To even fathom the imposition of a cessation of the payroll tax amnesty at this point in time is, frankly, beyond belief. Did the Malinauskas government not get the memo that South Australia is facing an unprecedented ambulance ramping crisis? Have they not heard of the spiralling cost of living and cost of doing business that has seen so many SMEs go into receivership? Maybe they have overlooked the massive $700 increase to power bills in the two years since they have been in office.

Whatever the case may be, it is clear to everyone—except apparently to those opposite—that this is bad policy and nothing but a tax grab. Regional South Australia is already struggling to attract general practitioners and it is obvious that this policy change will only further increase that difficulty. This tax grab comes at a time when Country Health Connect are withdrawing nursing services from towns across the South-East such as Lucindale, Coonalpyn and Tintinara.

This is at a time when, for the first time in living memory, Millicent has been unable to secure a registrar and has the lowest number of doctors in 50 years, following the recent departure of two registrars from the medical health clinic in Millicent. This is at a time when there is just one registrar available across the whole of the Limestone Coast right now when, in the second half of 2023, we had 15 registrars for our region. Millicent GP, Dr James Bushell, cites poor renumeration, when compared with locum and specialist work, as being one of the exacerbating reasons for this problem.

Clearly then, any added impost to GPs cannot be sustained at this time. Mr Bushell, in expressing his views on social media, wrote, 'If we lose just one GP at the medical clinic at Millicent, it will be a disaster.' Running a general practice is akin to being a small business owner. Everyone in this place knows how much South Australian businesses are desperately struggling with the rising cost of doing business right now, and to enforce payroll taxes upon GPs is a clear breach of faith with the South Australian community as this Malinauskas government promised, in no uncertain terms prior to the election, that there would be no new taxes and no tax increases.

Data released in December last year from the National Rural Health Alliance shows that rural men are 2.5 times and rural women are 2.8 times more likely to die from potentially avoidable causes than those in urban areas. Additionally, small rural towns of less than 5,000 people have access to almost 60 per cent fewer health professionals per capita than those living in major cities.

As the Royal College and the AMA have warned, the consequence of this government decision will impact the GP workforce. Older GPs will look to retire, while younger GPs, who wish to open their own practice, will think twice about doing so given the added impost. Regional South Australians cannot afford to lose any more primary healthcare providers than they already have. I reiterate my support for this motion, and condemn the Malinauskas government for their shortsighted and grubby GP tax grab.

The Hon. R.P. WORTLEY (17:29): I stand to give the government response to the motion moved by the Hon. Connie Bonaros on 19 March 2024. The government opposes this motion for the following reasons. The government has not changed the legal application of payroll tax, including to the general practitioners. The current contractor provisions of the Payroll Tax Act 2009 have been in place for many years and reflect the harmonised approach across a range of jurisdictions.

The government acknowledges that a number of medical practices have not accurately understood the contractor provisions of the Payroll Tax Act 2009 and, following the legal confirmation of the application of those provisions, needed time to fully understand their obligations and take steps to comply with these provisions in a manner that ensures that their businesses are sustainable.

In recognition of this, the government worked with the Royal Australian College of General Practitioners and came to a fair and reasonable solution, agreeing to provide an amnesty to general practitioner medical practices until 30 June 2024. Any eligible medical practice that registers with RevenueSA during the amnesty period will not be required to pay payroll tax on payments made to contracted general practitioners up to 30 June 2024 and for the previous five years.

Neither the registration process nor the amnesty is an approach ordinarily afforded to taxpayers, who may otherwise be liable to pay up to five years' unpaid taxes together with penalties and interest when evidence of noncompliance emerges. The South Australian government's provision of the amnesty is more generous than many other Australian jurisdictions, including Victoria, New South Wales, the Northern Territory and Tasmania, which have not offered any similar amnesties.

The government does not propose to extend the period of amnesty as to do so would further entrench differences in the administration of payroll tax, with respect to those general practitioner medical practices, other health practitioners and indeed other industries that have been meeting their payroll tax obligations. Providing a long-term arrangement where one cohort of businesses within an industry is required to continue to meet their obligations while another cohort is not is unfair and inequitable.

In Queensland, patient fees paid directly by a patient to a general practitioner for general practitioner services are not subject to payroll tax. It is important to note that the Queensland payroll tax legislation is not fully harmonised with other Australian jurisdictions: New South Wales, Victoria, South Australia, Tasmania and Northern Territory. This inconsistency provides an alternative treatment to third-party payments, which allows Queensland to make that distinction. RevenueSA, in conjunction with legal advice received from the Crown Solicitor's Office, does not agree with the application of the Queensland legislation. As such, we oppose this motion.

The Hon. C. BONAROS (17:32): I was going to stand and be ready to celebrate this occasion with the support of this chamber, but the Hon. Mr Wortley has just ruined my moment. At the outset, I would like to thank all honourable members who contributed today: the Hon. Ms Game, the Hon. Mr Simms, the Hon. Ms Girolamo, the Hon. Mr Ben Hood and the Hon. Mr Wortley. I note, the Hon. Mr Wortley, with respect, that you are the messenger today, but if ever I have heard a load of rubbish from the government, that was it—an absolute load of rubbish, an absolute crock coming from the Treasurer in response to a motion.

I would love to know what part of recognising the significant impact that the cessation of payroll tax will have on South Australia is not reasonable. I would love to know what part of acknowledging that the discontinuation of the amnesty threatens to exacerbate existing workplace challenges and reduce access to essential healthcare services, in the midst of a healthcare crisis, is not reasonable. I would love to know what part of acknowledging the potential consequences of an average fee increase of $12 per patient is not reasonable.

I would love to know how recognising that this financial strain may drive patients into already overcrowded emergency departments and further cripple our health crisis is not reasonable, and I would love to know what is unreasonable about asking the Malinauskas government to not only extend the amnesty—because that is one of a number of measures we have asked for, as acknowledged by the Hon. Robert Simms—but pause, like other jurisdictions have done. I challenge the Hon. Mr Wortley and the Treasurer, through the Hon. Mr Wortley, to tell me that they have not done that: pause the respective payroll tax bills for independent GPs to facilitate meaningful consultation with stakeholders, to collaboratively work towards a long-term solution that prioritises the wellbeing of South Australians.

I am not sure what part of that is unreasonable or worthy of opposition, but it should stun all of us. I certainly hope that the members of the RACGP and the AMA are listening today while they try in vain to enter into discussions with this government, with the Treasurer, with the Premier, to engage in meaningful discussion with the government about a payroll tax crisis that is looming for them, and the knock-on effects that will have for the state in terms of the health crisis and of course those patients who will no longer be able to afford to see their GP.

We already know the statistics—I read them out during the motion itself—about how reliant patients are on GPs for health care to keep them out of our hospitals. We already know how reliant they are on GPs to keep them out of hospitals so that they do not present to the emergency department, so that we do not end up with more ramping, so that we do not further impact our health crisis. But it seems like all of that, when it comes to the Treasurer, is falling on deaf ears.

Mark my words, I have one message and one message only for the Treasurer—not the Premier, the Treasurer—if you think that opposing a motion or opposing any motion in this place will shut me up or shut up those people impacted by that decision, you have another thing coming. You have no idea what is coming your way. I have had the discussions with those sectors, I have had the discussions with not only the RACGP and the AMA but with all the other allied health professional groups, and the rumblings are terrifying. They are terrifying, and I challenge the Treasurer to say to them that somehow this government thinks it is going to silence their voices by opposing a motion in this place.

There is a further motion we will be considering because, as we know, it is not just doctors now who are complaining about payroll tax. In fact, I have not found a business in South Australia yet to date that has not complained to me about payroll tax. We know that this government has become so reliant on the windfall gains of payroll tax that it does not know what else to do, does not know how to wean itself off the extra money—$1.7 billion a year, estimated to grow to $1.97 billion over the forward estimates, $5 million a day for employing people in South Australia. That is what payroll tax does to businesses in this state.

Every allied health group will now be looking at the government's response to engaging in meaningful conversation and saying, 'Hold up, if they're not willing to do this with GPs who got an amnesty, what the hell are they going to do to us?' Mark my words, it will not be pretty. That is not coming from me: that is coming from them. Reap what you sow, do not support the motion and enjoy the next few months of pain that will absolutely be levelled against you, Mr Treasurer, through you, Mr President.

The PRESIDENT: I hope the Treasurer is as frightened as I am.

The Hon. C. BONAROS: I am sure you are shaking in your boots, Mr President, but as signalled by the Hon. Robert Simms—we have had discussions about the amendment—we acknowledge that there are always many different ways to skin a cat and many different ways to skin this particular cat. I will be supporting the amendment as it has been proposed and, in so doing, acknowledge that obviously there are a number of ways that the government could be doing this. The Queensland example is one such way. All those options are being explored and therefore I do support the amendment.

Amendment carried; motion as amended carried.