Patients could be stung with a 15 per cent increase on a visit to their GP if the NSW government slaps a payroll tax on doctors employed on contracts.
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This is the concern running through medical practices throughout the state, says Australian Medical Association's NSW president Dr Michael Bonning.
"Payroll tax threatens to close many practices and force others to change their billing practices to accommodate this cost," Dr Bonning said in a statement.
"It is a greedy and poorly conceived cash grab that will exacerbate GP shortages and increase costs for patients."
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The fear stems from two recent court rulings in Commissioner of State Revenue v Optical Superstore (2019), and Thomas and Naaz v Chief Commissioner of State Revenue (2021) which determined in both cases that doctors working as contractors were instead classed as employees and liable for payroll tax.
Usually, doctors directly employed by a GP clinic pay workers' compensation, insurance, and payroll tax whereas those contracted to work in the rooms of a medical practice are exempt, Tamworth-based Dr Daniel Rankmore said.
"They bring their own equipment and cover their own insurances and set their own hours as contractors and are not employees," the director of Barton Lane Practice said.
"But the state government has been looking at ways of redefining what it means to be a contractor."
Dr Rankmore said if a payroll tax of about six per cent is slapped on contractors and backdated by five years, it would filter through to be "quite a lot", adding up to "hundreds of thousands of dollars" for clinic owners.
"It would certainly result in some practices closing," he said.
"It's a post-pandemic slap in the face.
"Here in our practice, we will probably put our fees up 15 per cent just to cover that tax."
Dr Rankmore said the rulings in both court cases have led to a lot of uncertainty in the health industry, with the lack of clarity surrounding government standards "hanging over our heads".
It comes at a time when GP clinics and hospitals across New England are facing a chronic shortage of health professionals, with Armidale looking at a drop of about 12 doctors and registrars in the coming months.
The Armidale Express has contacted the NSW Health Minister's office for comment.
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