Revenue SA's new "Payroll" Tax on your fee payment to your doctor
The State Government has determined that from 1 July 2024 Service Providers to Medical Specialists will be levied Payroll Tax.
The fees patients pay to doctors in independent practice are now deemed to be “wages” subject to Payroll tax. This then allows Revenue SA to levy payroll tax on the wages of Prosper Paediatrics’ small team of employees. We believe the determination is wrong.
This determination has significantly increased private practice costs in SA.
SA Revenue and the SA Government have refused to consider the impact on private medical specialist group practices, general Practices and other health services. The responsible Ministers have demonstrated in their public statements that they do not understand the private medical practice sector. Long-accepted associateship structures have allowed private medical practitioners to locate their practices together to share facilities and services. This has helped them contain costs, provide better patient care, and allow some to balance a part-time practice with other responsibilities, including public hospital appointments. These private practices have engaged Service Providers to enable them to share services such as rooms, reception and administration services, IT services and phones. Prosper Paediatrics is a Service Provider. Ministers and Revenue SA have not sought to understand the sector, have not allowed consultation and then suddenly forced Medical Specialist Service Providers to register with barely more than 3 weeks’ notice using an opaque ill-fitting system.
Associateship of independent practitioners in groups using Service Providers is an optimal arrangement for medical practitioners. It enables doctors to practice more efficiently and at lower costs whilst preserving their professional and business independence. This structure reflects their medico-legal responsibilities and supports their relationships with and continuity of care for their patients. It enables them to concentrate on providing their specialist services and care for more patients. Private practice specialists help reduce waiting lists everywhere.
Revenue SA’s determination as to liability for this tax is inconsistent with those of other states.
The State Government’s “Payroll” Tax imposition will push the costs of private specialist practice up in an already inflationary climate. The government seems intent on reversing the efficiency gains made possible by service providers and pushing up costs for patient services in the private sector.
This tax is a direct and punitive attack on patient choices and preferences for continuity of care with private practitioners.
Private practice specialists provide more efficient and cost-effective care than they can ever hope to do in public paediatric departments and outpatient clinics. Private care means continuity of care and much better administration. Private paediatric specialists take a big load off public hospitals, their EDs, and obstetric and paediatric outpatient departments.
The government pays big salaries to publicly employed specialists and administrative staff but now seeks to squeeze the viability of private specialists and the Service Providers who assist them. Public waiting lists in paediatrics are already far too long. Still, the Government seems utterly indifferent to the personal cost to children and our communities from the impact of their “Payroll” Tax on this situation.
Prosper Paediatrics is a Service Provider. The associated doctors engaged us to do what we do best. We are skilled and passionate about efficiencies, containment of costs, continuous improvement of reception and admin services and freeing the doctors to focus on what they trained for and do best, the independent conduct of their medical practices and the care of their patients. We have never employed the associated doctors, and we do not direct them. They choose their consulting hours, leave, fees, and practice style. They are personally responsible for their medical practice and their doctor-patient relationships. Prosper Paediatrics works hard for your doctor so your doctor can provide the best care for their patients.