The Australian Medical Association Queensland (AMAQ) has warned a "greedy" state tax grab will cripple general medical practices and end bulk billing.
AMAQ says the state government has started considering GPs as employees of the practices they work for, not contractors, making them pay a form of payroll tax.
In the past few months some GPs have received retrospective bills for the payroll tax, for thousands or even millions of dollars, the AMAQ warned, saying the Queensland Revenue Office (QRO) changed the way it taxed GPs in response to a NSW Civil and Administrative ruling.
"Our hardworking GPs are already at breaking point after almost three years of a pandemic," AMAQ President Maria Boulton said.
"This is an extremely short-sighted cash grab that will only exacerbate the problems in our GP workforce.
"For every dollar spent on general practice, there is a tenfold return to the healthcare system in terms of savings."
Some practices have received retrospective bills of as much as $3 million, going back five years, the AMAQ said, with 81 per cent of general practices to be affected.
'Tax on patients'
Patients, GPs and hospitals would all bear the brunt of the increased costs, the AMAQ warned.
"It is simply not viable for practices to continue bulk billing while having to pay unexpected bills of millions of dollars in some cases," Dr Boulton said.
"Bulk billing will disappear completely and patients will go to emergency departments instead, overwhelming hospitals."
The AMAQ said in most cases, GPs were not employed by their clinics, rather they had a service agreement to use clinic premises and administrative support, but the clinic did not pay their wages, superannuation or leave.
"These practices have been complying with the law for years," Dr Boulton said.
One GP, Aaron Chambers, who runs three south-side Brisbane clinics with his wife, said they take their tax obligations seriously, but the additional costs were "unworkable".
"All our legal advice was that we are fully compliant with our obligations, and that payroll tax does not apply to independent GPs," Dr Chambers, whose clinics who provide service for 25 GPs and serve 30,000 patients, said.
"We are more than happy to pay our payroll tax liability for our employees – our reception staff and other employees – but being forced to pay payroll tax on our customers' earnings is completely unreasonable.
"We are a profit-for-purpose business and reinvest into building a healthy community. We certainly do not make a mint. But we do take pride in serving our community.
"Any small business must turn a small profit to remain viable, and this change of rules is unworkable."
Revenue office says nothing has changed
The QRO said it was not targeting GPs in a tax grab.
"QRO has reviewed the New South Wales decision and has not identified any aspect that it considers changes the scope, practice or approach to payroll tax in Queensland," the Acting Commissioner of State Revenue Amy Rosanowski said.
"The treatment of Queensland medical practices in relation to payroll tax has not changed since 2008."
In a letter to the Royal Australian College of General Practitioners, Ms Rosanowski said the treatment of contractor payments for payroll tax is "longstanding".
"Compliance activities relating to contractor payments for medical practices is carried out in a manner that is consistent with compliance activities undertaken in relation to other industries," Ms Rosanowski said in the letter.
"Depending on their specific circumstances, it is possible that medical practices will be detected as part of our standard compliance approach."
Queensland Treasurer Cameron Dick said politicians were not involved in tax compliance, and GP's were subject to the same rules as other contractors.
"Like income tax, compliance is undertaken by the revenue office," Mr Dick said.
"I'm advised by the Acting Commissioner of State Revenue that the Queensland Revenue Office routinely undertakes compliance activities relating to contractor payment.
"People might not like paying tax, but I'm sure people would agree that it's appropriate for people to pay their fair share."
Dr Boulton called on the state government to consider an exemption from the payroll tax for medical practitioners, to take into consideration the strain the industry is under.
"Other states recognise this and are considering payroll tax exemptions for general practice. If NSW introduces an exemption and Queensland doesn't, our clinics will be at a competitive disadvantage and GPs will move interstate," she said.
"This effect will be immediate in border areas like the Gold Coast, Goondiwindi and Texas.
"We are calling on the Treasurer and the Queensland government to consider the impact that this will have on the ability of patients to access medical care, consider the effect on our already strained health system, and exempt general practices from this patient tax."
