The Queensland government has moved to allay a doctors' payroll tax dispute by offering general practices a two-and-a-half year reprieve to work through the issues.
The state's peak medical bodies and doctors have been warning the cost of going to a GP could rise if more clinics have to pay payroll tax on doctors' earnings.
Premier Annastacia Palaszczuk raised the issue at today's national cabinet meeting after Treasurer Cameron Dick had been in discussions with his New South Wales counterpart Matt Kean about giving clinics a "grace period".
Ms Palaszczuk confirmed Queensland would give certain medical practices a reprieve until mid-2025.
"We are planning and Queensland is committed to doing that amnesty until the middle of 2025," she said.
"Can I also acknowledge the hard work of GPs in Queensland, they do extraordinary work and I know they do great work right across the country."
Those medical practices that were not aware they were liable for payroll tax concerning contracted GPs' earnings will be able to register for the amnesty, which opens next week.
"In view of the potential lack of awareness of the payroll tax treatment of contractors amongst GPs, practices who have been recently issued with payroll tax assessments following compliance activity will have the liability waived," a spokesman from the treasurer's office said.
"Practices who have been paying payroll tax for payments made to contracted GPs will not be eligible for the amnesty and will continue to pay payroll tax."
Long-term solution needed: RACGP president
Royal Australian College of General Practitioners (RACGP) president and Queensland chair Dr Bruce Willett welcomed the decision but said work needed to continue to resolve the issue in the long term.
"It's good news there is this reprieve and an opportunity to continue to work with the state government to try and resolve the issue in the long term," he said.
"I'm thankful for the cooperation but we do need to resolve it in the long term.
"It's also an issue in Victoria and New South Wales, and we need [leaders] in the southern states to make the same commitment."
The stoush between the peak medical bodies and state governments arose because of a New South Wales tribunal ruling handed down last year.
General practitioners work under different models, with some operating under a service agreement with a medical practice where the clinic provides a space and support for the GP.
Under this model, medical practices pay payroll tax on nurses and receptionists, but not on the doctors' earnings.
Last year's tribunal ruling deemed that doctors working in those medical centres were contractors and payments to the doctors were taxable wages for payroll tax purposes.
In December, the Queensland Revenue Office (QRO) put out a ruling confirming that GPs were employees for payroll tax purposes and the fees they received should be taxable.
Earlier this week, AMA Queensland president Maria Boulton labelled it "immoral" and a "tax grab" from the Queensland government.
The QRO — and Mr Dick — have been insisting that tax laws have not changed since 2008.
But yesterday, Mr Dick spoke to Ms Palaszczuk about the proposal to pause the implementation of payroll tax assessments on certain GP clinics.
Payroll tax is a state-based tax on wages paid by an employer when they have more than $1.3 million as a total of wages, superannuation and contractor payments over a full financial year.
In Queensland, the rate is 4.75 per cent for businesses who pay $6.5 million or less in taxable wages.
