Dental patients to face higher costs and disruption as dentists fear bankruptcy

payroll tax dentists
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A new take on payroll tax law slapped on health practitioners including dentists will results in thousands of healthcare provider businesses around Australia facing bankruptcy or significant price increases passed on to patients.

It represents the single biggest threat to the dental profession and access to dental treatments for patients since the start of COVID when mask supplies dried up, forcing practices to close their doors until access to the national stockpile was granted.

The Australian Dental Association wrote to premiers and ministers in NSW, Victoria, South Australia, the ACT and the Northern Territory in September asking them to step in and grant the same amnesty to dentists which doctors have received. So far, the ADA has had no noteworthy response.

In another development of the payroll tax issue, the ADA has revealed that while it also wrote to relevant finance ministers in NSW, Victoria, Tasmania and South Australia in June asking to negotiate with the dental body over the issue, again it has been met with a wall of silence.

“We’ve heard absolutely nothing back—yet doctors received an amnesty while they work out the situation with GP practices,” ADA CEO Damian Mitsch said.

The NSW government has put into place a 12-month payroll tax amnesty for contracted medical GPs and said it would consult with them on a long-term solution. Yet GPs and dentists are dealing with exactly the same mess, and most are really struggling.

Many dental practices will either be forced to hike up prices considerably at a time when cost of living pressures are already putting a squeeze on family finances—or face bankruptcy and closure with considerable unexpected debts.

“If we don’t get the same amnesty, State Revenue Office ministers in each state and territory will be responsible for bankrupting and closing down hundreds of dental practices in their jurisdiction. Do they want that on their conscience?” Mitsch said.

“We now urge state governments to sit down at the table with us to negotiate a way out of this mess. Of course, dentists want to pay their taxes. What they don’t want is the unwanted surprise of a backdated tax bill for five or six figure sums that could see them having to close down.”

The dental peak body is also urging its 17,500 members to write to their local MP to push for the amnesty and stop any backdate which would cripple many businesses.

Central to the issue is whether a dentist as a health professional is delivering their services to a practice or to patients.

“Talk about splitting hairs. As a sector we can’t even work out the extent of the problem because it’s so complicated,” Mitsch said.

“How does holding one degree end up with GPs not being penalised and dentists are—yet it’s the same law applied to both professions and the business model is the same? It’s inconsistent, illogical and plain unfair.

“The ADA calls on state and territory governments to ensure dentists are treated no less favourably than GPs when it comes to payroll tax. It’s clearly a state-based cash grab that hasn’t been properly thought through in terms of the devastation it will cause for patients, dentists and doctors.”

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