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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2023-10-19 Daily Xml
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General Practitioner Payroll Tax

Mrs HURN (Schubert) (14:28): My question is again to the Minister for Health and Wellbeing. How does the minister respond to comments made by Chandlers Hill surgery GP Dr Daniel Byrne in relation to proposed GP payroll tax changes? With your leave, sir, and that of the house, I will explain.

Leave granted.

Mrs HURN: Dr Danny Byrne was quoted in The Advertiser on 4 October as saying, 'For a state government elected to fix ramping and health, it seems counterintuitive to hit GPs with another tax.'

The Hon. S.C. MULLIGHAN (Lee—Treasurer) (14:29): This is not a new tax. This is not a new obligation. This is an ongoing obligation, which we are waiving for GPs in order to help those GPs who haven't been paying their payroll tax obligations—

Members interjecting:

The SPEAKER: Member for Schubert! The member for Schubert is warned.

The Hon. S.C. MULLIGHAN: —have a long runway of time to understand their obligations and come into compliance from 1 July next year. I have seen the representations that the head of that practice has made, that he worries for the first time—if I can recall the figures off the top of my head, I think his correspondence referred to the fact that there is $3 million worth of GP wages in his practice that he fears may be liable for payroll tax. What this reinforces is how important it is for GPs who feel that they may have an obligation to engage with RevenueSA to understand how payroll tax may be applicable to their circumstances.

It has become clear to me, as I was saying at the tail end of my answer before, that there are a range of assumptions that some GPs have—about how payroll tax works, about what it might mean for their operations, about what their liability might mean—which I don't think take into account how payroll tax is actually applied. We have one of the lowest payroll tax rates in the nation. We have one of the highest tax-free thresholds in the nation. It is not all the wages of a GP practice that are liable for payroll tax.

The Hon. V.A. Tarzia interjecting:

The Hon. S.C. MULLIGHAN: The member for Hartley says, 'Yes, thanks to us.' Well, it was Labor that instituted the 4.95 per cent payroll tax rate, so his recollections are misdirected there. I underline the point that we are absolutely committed to working with GPs so that they only need to pay their obligations and nothing more. They understand that the way in which some GPs (not all GPs) have structured their practices—which perhaps, as it has been reported to me and as it has been told to me by some GPs, were structured in a way to minimise their tax obligations—are not successful in light of how payroll tax is applied, not just here but in a harmonised way across the majority of jurisdictions across the country.

The representations from the Chandlers Hill GP service only underline how important it is that these practices—and, indeed, those practices that employ business managers and directors and so on to manage the affairs of the business—engage with RevenueSA so that they can understand it.

The other side of this coin is, as I have reported and provided the numbers to this house in response to questions from those opposite, that we already have GP practices that are paying payroll tax. While I think it is not ideal, it is okay to extend a period of time where we've got an inequity in the payroll tax base, where some people are expected to maintain meeting their payroll tax obligations while we give a significant period of time where others don't have to pay payroll tax.

We can't continue that on in perpetuity. That is unfair to those GPs who are already meeting their payroll tax obligations. It's also unfair on those other clinicians who are also meeting their payroll tax obligations. We've got to make sure that we administer payroll tax fairly and equitably. We are committed to doing that, but we will make these significant allowances for GPs to make it as easy as possible for them to come into compliance.

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