Western Victoria loses 18 GP clinics in past year

A survey of Primary Health Networks (PHNs) by the Royal Australian College of General Practitioners (RACGP) found at least 184 clinics had closed across the country in the 2022-23 financial year.

In the same period at least 110 new clinics had opened. The RACGP calculated there was a net loss of at least 55 clinics around the country. The college said it was hard to build a complete picture because only a little over half of the PHNs were able to provide data.

But the figures for the Western Victoria PHN were among the worst with 18 clinics closing and 10 new practices opening, for a net loss of eight.

A spokesperson for the PHN said a further 13 practices were at risk of closing.

Only Melbourne and Sydney recorded a greater net loss of clinics over the period, but as a proportion of the total clinics Western Victoria may have been the worst hit region in Australia.

In Warrnambool two clinics closed over the 12 months with no new practices opening. Port Fairy also lost the Shearwater Medical Clinic in September 2023 just two years after it opened.

"General reasons for closure include workforce shortage, relocating GPs and financial considerations," the spokesperson said.

The Standard has reported extensively on the pressures confronting GP practices with a decade of pay freezes combining with declining graduate numbers to stagnate the flow of new doctors into the sector.

The latest burden on the industry are the newly announced changes to the interpretation of payroll tax exemptions for medical clinics.

The State Revenue Office released a ruling in late August that said medical practitioners like GPs were operating as "common law employees" of their medical clinics, which meant the medical clinics were liable to pay payroll tax for them.

The laws governing the medical centres' eligibility for payroll tax have been around for decades but have not been applied until recently. In Victoria some medical practices have already started receiving bills with one practice owner suddenly finding himself liable for $800,000 in taxes.

The RACGP announced on October 11 it had started a campaign to fight the new interpretation, pushing the Victorian government to reinstate the exemption.

"It will see practices put up posters informing patients about the tax grab," an RACGP spokesperson said.

"Patients will be asked to sign a petition calling on the government to stop the tax grab because 'healthcare needs to be affordable for everyone'."

The college said if the interpretation was applied across the board clinics would close and out-of-pocket fees would rise.

Chair of RACGP Victoria Anita Munoz said raising fees was the "last thing" GPs wanted to do.

"But our hands are tied - practices can't absorb this extra tax," Dr Munoz said.

"The RACGP has sent numerous letters and requested meetings with the government to find a solution but to no avail.

"We know of 16 practices in Victoria serving hundreds of thousands of patients that have been targeted for retrospective tax collection, and there will be many more to come."

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