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Dental patients to face higher costs and disruption as dentists fear widespread bankruptcies

The Australian Dental Association 4 mins read




State governments failing to step in and resolve – yet doctors get amnesty

Radio Grabs attached to release


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 First Ministers in NSW, Victoria, South Australia, the ACT and the Northern Territory last month (22nd Sept) 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,” said ADA CEO Damian Mitsch.

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?

“We now urge state governments to sit down at the table with us to negotiate a way out of this mess,” Mr Mitsch added. “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 was 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.

“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.”

Newcastle dentist Dr Mark Morrin said: “If this comes to pass and I have to pay the $200,000 my accountant has worked out I would owe if this isn’t resolved, it becomes a consumer tax because dentists like me will be forced to pass on these taxes by raising dental fees.

“How else do they think we can afford a huge, unscheduled tax bill? So when consumers are hurting already, this is one more squeeze on household budgets and cash-strapped consumers.”

While the Australian Senate is currently examining access to dental services in Australia, it is unfortunate that state and territory governments are adding to cost-of-living pressures by loading extra taxes onto the cost of health care.

Dentists haven’t passed on inflationary increases in a long time. The last ADA Fee Survey found dental fees went up by just 3.7% from 2020 to 2022 while over a longer period between 2017 and 2022 when inflation increased by 14.5%, fees increased by just 2.14%. These proposals could see dental fees skyrocket.

Background for Editors

  • Several state and territory governments (NSW, Vic, Qld, SA) have recently released quite complicated guidance on Payroll Tax with respect to medical centre businesses, including dental practices. It follows a recent court ruling by NSW and Victorian State Revenue Offices. Bulk-billing may die following NSW, Victoria payroll tax ruling, GPs warn (
  • Dental practices pay Payroll Tax for reception staff, Dental Assistants, Dental Hygienists and Employee Dentists. But a widely practised trend is that independent dentists and doctors are not subject to Payroll Tax because of the practitioner centric nature of healthcare. Doctors and dentists have hung out a shingle as independent practitioners for hundreds of years.
  • Some dentists who supply services as a contractor using their ABN may be deemed an employee for the purposes of assessing Payroll Tax, according to a complicated range of tests newly set out, and their application backdated five years.
  • The newly applied tests relate to healthcare business with a $1m revenue threshold and in dental practices this typically means those with three or more dentists working there.
  • One reason this is complicated is that a dentist that works more than 90 days a year in another place is considered to be independent. It’s almost impossible to work that out going back five years.
  • While the Queensland, SA, and NSW Governments now seem to realise that changes in this area could have effects on healthcare providers and patients, these governments are so far only looking at the effect on GPs and ignoring the effects on dentists and other practices.
  • The only response so far is the Northern Territory Minister’s office saying there has been no ruling on PT in that jurisdiction, while the SA Premier has extended an invitation to the ADA SA branch to discuss the issue.

To interview Damian Mitsch call ADA Deputy CEO Eithne Irving 0419 550 186

Note: Radio Grabs attached to release

Contact details:

For interviews call ADA Deputy CEO Eithne Irving 0419 550 186


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