Bulk-billing Victorian general practice clinics will get a free pass from paying payroll tax on contractor GPs after the state government backflipped on controversial changes.
The move, which will result in clinics not being forced to pay retrospective payroll tax bills for contractor GPs, was announced on Wednesday afternoon.
Twelve-month exemptions will be available for clinics that have not begun paying payroll tax on wages to their contractor GPs up until July 2025.
From that point, an exemption from payroll tax payments will be provided to contractor GPs and employee GPs for providing bulk-billed consultations.
Treasurer Tim Pallas said the changes were aimed at helping GPs provide more bulk-billing.
"We've worked closely with the primary care sector on how we can best support them - and we're making these long-term changes," he said.
Royal Australian College of General Practitioners Victoria chair Anita Munoz, who previously urged Premier Jacinta Allan to "see sense" and scrap the taxes, said the result was a "middle-ground solution".
"The prospect of retrospective tax bills on GPs was a source of enormous stress for many general practice teams and their communities," she said.
"This move will help keep local GPs' doors open."
Victorian opposition leader John Pesutto said the previous tax added almost 30 per cent to the cost of a GP visit which threatened the financial viability of many clinics.
"For months Labor ignored healthcare professionals about the dire impact on patients their insidious health tax was having," he said.
"Today's long-overdue backflip is a win for Victorians and for common sense."
Australian Medical Association Victoria president Jill Tomlinson noted GPs' work helped free up the state's embattled hospital facilities.
"After listening to advocacy from the sector, the state government has implemented changes that deliver certainty and clarity to Victorian general practices," she said.
GP clinics already have a payroll tax bill for doctors-in-training and other employees including receptionists and nurses.
However, GPs were previously considered to be contractors, rather than traditional employees, which meant they were able to dodge the tax.
