Federal bulk-billing push being 'killed off' by states increasing tax take on GP clinics, doctors warn   

ABC News
22 April 2024

In short: Doctors say early signs suggest federal funding to improve bulk billing is being eaten away by state tax changes
Health Minister Mark Butler has expressed fears the $3.5 billion bulk billing push could be "lost" to states increasing their payroll tax take
What's next? States are consulting with GPs on their changes to payroll tax rules, with some due to take effect in July
The federal government's $3.5 billion attempt to revive bulk billing rates is being "killed off" by states pocketing the money instead, doctors have warned.   

The government in November tripled the payment GPs receive to bulk bill patients in an effort to reverse falling rates of bulk billing — where practices accept a fee from Medicare as full payment and charge nothing to patients.

But at almost the same time, a number of state governments determined a new interpretation of payroll tax laws that meant GPs would now be counted as employees rather than contractors for tax purposes, increasing the tax take by states from medical practices.

The Royal Australian College of General Practitioners said states were pocketing the billions tipped into practices by the federal government, and preventing GPs from reducing their patient's fees.

"Unfortunately, those reforms are not going to be able to have any significant impact because the money that is being put into general practice is going to be taken out by the states through the application of payroll tax on Medicare," RACGP president Dr Nicole Higgins said.

"We can't bulk bill somebody and pass on a charge, because the law doesn't allow us, so if each consultation attracts payroll tax, who pays for that? Is it the patient, is it the practice?

"What we're hearing [from GPs] is, 'I can't afford to bulk bill people who really need it because I have got to pay this state tax.'"


RACGP president Dr Nicole Higgins said bulk billing was being undermined by the states increasing their tax take from medical practices.
The states have argued GPs should be counted for the purposes of the tax, and special carve outs would undermine the broader regime.

Health Minister Mark Butler has expressed his fears that the state tax take could undo efforts to improve bulk billing.

And the changes have caused alarm among GPs.

GP tax change 'unfair'   
Colin Dent wouldn't necessarily be deterred from going to the doctor if payroll tax costs are passed on to patients, but the 74-year-old from Adelaide's southern suburbs worries that those who are "most vulnerable" may well be.


A Victorian clinic received an $800,000 tax bill dating back several years, with others warning they faced bills worth millions of dollars.

In Canberra, several clinics have already increased their fees, with some like East Canberra GP directly attributing fee increases to payroll tax.

And in South Australia, Dr Daniel Byrne, a former RACGP chair, said his two practices were on the hook for an estimated $140,000 in additional costs, which he would be forced to pass on to patients.

Dr Higgins said while some GPs had already raised fees in response or in anticipation of higher taxes, the RACGP was encouraging doctors to hold off in the hope payroll tax concerns could be resolved.

Early indicators bulk-billing benefits being eroded
The federal government has celebrated early data for the first two months after its tripling of incentive payments, which showed a 2.1 per cent increase in bulk billing rates.

But preliminary data released by the Australian Institute of Health and Welfare suggests any improvements to the bulk-billing rate have so far failed to translate into reduced overall costs for patients.

While it is subject to change pending any late-arriving Medicare claims, early results for 2024 suggest the share of GP fees covered by Medicare has not improved since November, when the tripled incentive payment scheme began.

Despite tipping in $3.5 billion more over five years, quarterly data suggests the share of GP fees being covered by Medicare has so far been static, and has shrunk by 7 per cent since two years ago.


Noting the data was preliminary, Shadow Health Minister Anne Ruston said overall affordability had not improved for Australians who were not being bulk-billed.

"This data shows that any benefit to affordability has just been eaten up by higher costs that have been paid by people that are not bulk billed," Senator Ruston said.

"It is very disturbing data because the trend is quite significant.”

Butler and Ruston share concern states are undermining federal efforts
Mr Butler has expressed his concern the federal government's efforts to improve bulk billing will be "lost" unless states back away from their tax changes.

"Payroll tax is a matter for the states but I am very worried that our historic investments we've put into Medicare, in response to calls from state governments, will be lost to increased payroll tax obligations by general.

So Federal Labor increased funding for bulk billing but State Labor changed the tax system for Gp”s so instead so as to profit ( or tax) the initiative from Federal labor?

How short sighted as all this does is put more people in hospital emergency which is than funded by the states.

Why do we continue to elect idiots?