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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2023-06-14 Daily Xml
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General Practitioner Payroll Tax

Mrs HURN (Schubert) (14:21): My question is to the Treasurer. Has the Treasurer been briefed on the outcome of Thomas and Naaz v Chief Commissioner of State Revenue in New South Wales? If so, is the government taking any steps in response? With your leave, sir, and that of the house, I will explain.

Leave granted.

Mrs HURN: The opposition has been advised that this case has the potential to change the way GP practices and their contracted GPs are treated for the purposes of payroll tax. Many have expressed concerns that a change of approach in terms of payroll tax could lead to a decrease in bulk billing rates and, in some circumstances, it could cause GP practices to shut their doors. The Queensland government has publicly ruled out imposing this tax treatment change on GPs.

The Hon. S.C. MULLIGHAN (Lee—Treasurer) (14:22): I thank the member for Schubert for her question. She is right to raise it; it is an important question because we are in the middle of a national GP crisis at the moment. We have a fundamental shortage of GPs. GPs are finding it very, very difficult if not impossible to keep up with demand.

The federal government has announced measures in its budget to increase bulk billing incentives to try to not only incentivise GPs to make bulk billing services available to people but also to try to improve the overall revenue of GP practices and keep GP practices viable into the future. This issue has emerged as a result of a case which was taken in New South Wales about whether GP practices are liable for payroll tax.

Payroll tax arrangements in Australia have been consistent since 2008. Leading up to that date there was an effort amongst states and territories in payroll tax harmonisation, and one of the key outcomes of that was to make sure that each state and territory was levying payroll tax in the same way—not necessarily in terms of rates or thresholds, but in terms of the application to different types of workers and also different types of wages.

What has come out of this New South Wales case is that there are some GP practices that had arranged themselves in a way that meant that the operators of those GP centres had assumed that they were not liable for payroll tax on the wages being paid to GPs when, of course, the Payroll Tax Act has been consistent for 15 years that wages above a certain threshold—we've got a tax-free threshold here in South Australia—are liable for payroll tax.

Some GPs, some GP practices, are paying payroll tax, and some that assumed they had no payroll tax obligation are worried that they are in fact liable for payroll tax. What happened in Queensland was the Queensland government basically made two commitments. They committed—and a similar approach would normally be taken here in South Australia—that the state revenue office would, after undertaking some compliance activity, work out that, if there is a payroll tax liability, then that payroll tax has to be paid and also paid retrospectively, including with penalty and interest as well as the obligation going forward. Queensland has said that they will not apply it retrospectively, and they have said that they will apply it in the future, but they won't apply it for the next two financial years, and that will give noncompliant GPs time to come into compliance.

Other states and territories are considering their positions. What I can report to the member for Schubert—and I understand that she is engaged with the royal college here in South Australia—is that we are continuing our conversations with the royal college. We are very, very sympathetic with the circumstances that some of their members find themselves in, where they are worried about having a payroll tax obligation they weren't aware of. We are also very cognisant that we need to treat everybody equally, not just generally across the payroll tax but within the GP industry, if I can refer to them like that, so that whatever arrangement we strike with the royal college and their members is as equitable as possible for the remaining GPs who have been paying payroll tax to date.

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