GP fees in Newcastle for a standard consultation will rise as high as $120 from next month due to the NSW government hitting contracted doctors with payroll tax.
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Having met to discuss the government's tax, GPs believe the only option is to increase fees.
The tax, to be introduced from September 4, affects most GPs because they contract to medical centres.
Dr Max Mollenkopf, a practising GP who owns Whitebridge Medical Centre, said "there is not a profit margin in general practice to account for the tax".
"Most local practices are all looking at increasing fees by $10 to $15," Dr Mollenkopf said.
GPs in Newcastle and Lake Macquarie presently charge about $90 to $105 for standard consultations.
In the Hunter's other areas, these fees are about $75 to $90.
So for many Hunter medical centres, standard consultation fees are expected to exceed $100 from September.
Dr Mollenkopf, a Hunter General Practitioners Association committee member, said "patients should realise this is happening".
"It's very hard when the government is putting forward one narrative to people, saying they are trying to help with the cost of living," he said.
"They are choosing to wield the tools they have in a way that increases costs on consumers. That's unfair."
In last month's state budget, the Minns government exempted medical centres from paying retrospective payroll tax for the past five years.
GPs had been concerned about being hit with $500,000 bills that could have put some clinics out of business.
In the budget, the government also said it would provide medical centres with a payroll tax rebate from September, if they met bulk-billing thresholds.
In the Hunter, the threshold means medical centres must bulk-bill "at least 70 per cent of services".
When contacted for comment, the government pointed to a budget statement from the Treasurer Daniel Mookhey and Finance Minister Courtney Houssos.
"This initiative will protect bulk-billing rates by reducing financial pressures on GP practices, so they don't pass on additional costs to patients and will save clinics from closure," it said.
But Dr Mollenkopf said Hunter medical centres would run at a loss "at that level of bulk billing [70 per cent]".
"In the Hunter, most practices will charge the cost of doing business. That's why so many patients have to wear gap fees whenever they see their GP."
Medicare rebates for a standard GP consultation [six to 20 minutes] are $42.85.
This means Hunter residents will face gap fees of about $45 to $75 when fees rise to cover the payroll tax.
The issue arose after two court cases in 2019 and 2023, which led Revenue NSW - the state tax office - to rule that contracted GPs would be subject to payroll tax.
Contracted GPs argued against this, saying they shouldn't be considered employees because they receive no holiday pay, sick pay, superannuation or workers comp.
The payroll impost comes amid AMA concerns about an undersupply of about 10,600 GPs across the country by 2031-32.
GPs have been calling for governments to help make the profession more attractive to medical graduates.
They say the payroll tax would worsen the problem of people avoiding medical appointments due to cost, while adding pressure on emergency departments.
Since November last year, the federal government has offered GPs extra incentives to bulk-bill patients aged under 16, pensioners and concession card holders.
Federal Health Minister Mark Butler said the Albanese government was "keen to ensure that our historic investments in Medicare will not be lost to increased payroll tax" on GPs.
"We welcome the recent decisions of some state governments about payroll tax exemptions for GPs," Mr Butler said.
