RACGP warns tax burden is undermining the viability of general practice in Victoria

The Royal Australian College of GPs (RACGP) has welcomed the Victorian Government’s continued investment in healthcare services announced in today’s budget, but warns that rising tax pressures, particularly payroll tax, are undermining the sustainability of general practice and threatening access to care for Victorians.

RACGP Victoria Chair Dr Anita Muñoz said general practice supports investment that improves access to care closer to home, but governments cannot ignore the financial reality facing the small businesses that deliver the majority of primary care.

“We welcome investment in healthcare, but right now the Victorian Government is giving with one hand and taking with the other,” she said.

“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. That directly undermines the viability of general practice and impacts patients.”

Dr Muñoz said general practices are predominantly small businesses operating on tight margins, and additional state taxes risk accelerating practice closures and workforce shortages.

“General practice in Victoria is already under severe pressure. Rising costs, workforce shortages and inadequate Medicare funding are pushing many practices to breaking point,” she said.

“Adding payroll tax on top of this does not strengthen the health system, it weakens it.”

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.

“Queensland has recognised that taxing general practices out of existence makes no sense from a health or economic perspective,” Dr Muñoz said.

“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.”

Dr Muñoz warned that failing to address the tax burden on general practice will ultimately 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,” she said.

“If the Government is serious about delivering more care closer to home, it must ensure general practices are financially viable to provide that care.”

~ENDS