Rising Payroll Tax Concerns
The Royal Australian College of GPs (RACGP) has raised concerns over the increasing tax burden affecting general practices in Victoria, stating that it threatens the sustainability of these essential healthcare services. General practices play a crucial role in providing primary care, but they face rising operational costs. On November 3, 2023, Dr Anita Muñoz, Chair of RACGP Victoria, highlighted these concerns following the Victorian Government’s budget announcement.
While welcoming the Victorian Government’s investment in healthcare, the RACGP emphasises that rising payroll tax burdens are making it difficult for general practices to operate efficiently. In 2022, payroll taxes accounted for a significant portion of the financial strain on these practices. This financial pressure threatens patient access to primary care throughout the state. Dr Anita Muñoz emphasised that general practices are small businesses working on narrow margins. “We welcome investment in healthcare, but right now the Victorian Government is giving with one hand and taking with the other,” she remarked.
The growing tax burden on general practice, especially payroll tax, is making it harder for practices to keep their doors open, employ staff, and deliver care to their communities. In the last year, several practices have reported that these taxes could lead to closures. The RACGP warns that the additional financial strain from payroll tax could accelerate practice closures and exacerbate workforce shortages in the sector. This comes on top of existing challenges such as rising costs and inadequate Medicare funding. Many practices are already under severe pressure, risking the viability of general practice and impacting patients.
Impact on General Practices
“Adding payroll tax on top of this does not strengthen the health system, it weakens it,” Dr Muñoz noted. The RACGP advocates for a payroll tax exemption for GPs in Victoria, similar to measures in Queensland established in 2020. They argue that such an exemption would safeguard patient access to care and support the long-term viability of general practices.
Queensland has recognised that taxing general practices out of existence makes no sense from a health or economic perspective. Dr Muñoz stated, “Victoria should follow suit. Exempting GPs from payroll tax is a practical and immediate step the state can take to protect patient access to care and support the frontline of the health system.” The RACGP continues to call on the Victorian Government to introduce a payroll tax exemption for GPs, similar to arrangements already in place in Queensland, to protect access to care and support the long-term sustainability of general practice.
Failing to address the tax burden on general practice will increase pressure on hospitals and emergency departments. “When general practices become financially unviable, patients don’t disappear, they end up in emergency departments and hospitals, which are far more expensive parts of the system,” Dr Muñoz warned. If the Government is serious about delivering more care closer to home, it must ensure general practices are financially viable to provide that care.
Last updated: 29 June 2026, 12:12 pm
