AMA continuing support for public hospital employed members
More than two years ago, Treasury’s not-for-profit Sector Tax Concession Working Group released a consultation paper reflecting upon various tax conce3ssions for the not-for-profit sector.
The main area of concern for salaried doctors was Fringe Benefits Tax Concessions.
At that time, the AMA and the Australian Salaried Medical Officers Federation made a joint submission supporting the retention of current concessions and highlighting how essential it would be to have a cautious approach to any potential taxation reforms in this area.
The submission noted that public hospitals rely on salary packaging arrangements to ensure that they can compete with the private sector for medical practitioners (and other staff), and any changes would effect recruitment and retention in the public hospital sector.
The submission also highlighted the particular significance of any changes for regional hospitals, the additional administrative and compliance burden they would create, and the impact on industrial entitlements.
The Working Group’s final report conceded that removing the concessions altogether without arrangements to provided similar support would have a significant impact. It proposed an alternative support payment to employers, possibly through the tax system, to replace these FBT concessions.
Soon after it was elected, the Abbott Government announced that it would no proceed with tax changes for not-for-profits, and instead said the issue would be addressed as part of its White Paper on tax reform.
In March this year, Treasurer Joe Hockey announced a ‘conversation’ on tax by releasing the Re:think Tax discussion paper.
The AMA is once again concerned by the possibility the Government will consider changes that will undermine salary packaging arrangements for our members, which are now such an extremely important consideration in the employment terms and conditions for salaried doctors.
The AMA supports a fair, efficient and equitable taxation system, and believes the current tax concessions available to the NFP sector strike a sensible balance and reflect practical public policy by supporting the recruitment and retention of qualified and experienced staff in areas that would otherwise struggle to be able to compete with the private sector.
As State and Territory health budgets dwindle, NFP tax concessions are a relatively small way in which the Commonwealth can contribute to the smooth operation of public hospitals without the impost of direct funding.
The loss of experienced staff that could occur if FBT and other tax concessions are withdrawn would do immeasurable damage in terms of quality health outcomes, teaching and research in a sector already under great stress from multiple “efficiency dividends”.
History has shown that our health system requires solid long-term strategies to remain efficient, as opposed to quick-fix initiatives underpinned by a drive for cost-cutting. Changing the current tax concession arrangements is unlikely to lead to any improvement in patient care.
This taxation review, like the last one, needs to proceed with caution and ensure that it thoroughly assesses the impact of potential reforms, including downstream effects.
It isn’t all about achieving a notional line entry in a balance sheet. Public hospitals are far too important for us all to fall victim to cheap political point-scoring.
The AMA will be making a submission on this current discussion paper, as will many other concerned organisations, and I trust that good judgment will prevail and not permit interference with this ultimately small fiscal issue when balanced with the health care of the nation.
 The complete discussion paper, and individual chapters, are available at: