What Now After the Abolition of Qld Labor’s Patient Tax?
On 29 September, the then Queensland Opposition Leader, David Crisafulli made an announcement that under a state government led by him, the LNP would abolish Labors Patient’s tax. Putting aside any political spin, Mr Crisafulli was referring to the Payroll Tax Impost on payments to General Practitioners, which is due to begin in July 2025. In truth, this extra tax on all medical professional practices - not just GPs - wasn’t quite a decision of the former state government, but rather an acceptance and formalisation of a new understanding of an existing law created by some tax cases in southern states.
But let’s not let the truth get in the way of a good political story. There is no doubt the extra tax is harmful. The AMA warns it will see an exodus of general practitioners, an end to bulk billing in Queensland and an increase in cost of a medical appointment of up to $30.
And we agree!
Many medical practices and GP clinics especially have seen margins shrink in recent years. This pressure simply translates to practices needing to pass on this cost to consumers. All this at a time when there are cost of living pressures being experienced by the public at large.
Well, the opposition is now the government. On Saturday 26 October, the LNP won the state election and while it is not clear how much of a majority it will have in government, it has a majority and can govern in its own right. The LNP website, in the new government’s first week - amongst other things - it will instruct the Treasury to begin abolishing this tax.
We at Doctors Wealth welcome this urgency and look forward to advising clients of this significant change, hoping the detail is as good as the announcement. We will continue to keep you updated on this issue.
But, we also now have some further questions or observations:
Will the state government consider the abolition of this tax for all medical practices - specialists included - as proposed by and lobbied for by the AMA?
GPs are at the forefront of public health, but surely cost and access to medical specialists is also as important as access to GPs.
Will the revenue offices of other states follow the Queensland lead and also abolish this tax?
Maybe, and I urge them to do so.
Whilst each state has its own payroll tax laws, in recent times there has been a move to harmonisation of law across the states for reasons which include competitiveness of the particular state, political pressure and labour force mobility.
For these reasons, we may see other states follow the Queensland lead and also change their laws.
Will practice owners and operators re-examine their business models and contracts?
The changes to payroll tax forced all practices to look closely at these issues and perhaps make changes. Will some practices now look to unwind these changes and revert back to previous contracts and models?
Your author can see merit in each of the models currently seen in practices today, but suggests the change can be an opportunity to review decisions made and possibly position the practice better towards its medical professionals and its patient market.As the move becomes law, we encourage all practices to take some time, think again and determine the suitability of arrangements in accordance with practice business plans.
1 Statement 29 September 2024 https://online.lnp.org.au/news/lnp-will-stop-labors-patients-tax