“This is an important cost-of-living measure … it’s also designed to reduce pressure on emergency departments,” Finance Minister Courtney Houssos said.
It is a rare intervention by a state government in primary healthcare policy,which is usually the responsibility of the federal government through Medicare.
The NSW and Victorian state revenue offices published rulings last year that confirmed for the first time that many independent GPs working in medical centreswould be subject to payroll tax.
Doctors had warned that some practices would be forced to hike prices by $20 per appointment and others would have to close if they were required to pay huge retrospective bills on GPs previously considered contractors and exempt from the tax.
The Royal Australian College of General Practitioners (RACGP) and the Australian Medical Association (AMA) have been lobbying states to waive huge tax bills sent to GPs and provide certainty to clinics facing elevated costs.
RACGP NSW chair Dr Rebekah Hoffman said the tax cloud hanging over GPs would have had a devastating impact on practices,patients and the state’s health system.