Proposed tax changes would disrupt rural health workforce

9 Mar 2017

The AMA this week called on the Government to dismiss elements of a new discussion paper from the Australian Taxation Office (ATO), which have the potential to stop the flow of young medical graduates choosing to work in rural and remote Australia.

The ATO paper, Review of ATO advice on scholarships, effectively recommends taxing some scholarship programs aimed at addressing medical workforce shortages.

AMA President, Dr Michael Gannon, has said that the ATO proposals are at odds with the Government’s welcome current commitment to provide incentives to attract more doctors and other health professionals to live and work in country areas.

The ATO's plan to tax scholarships where there is a required commitment to work in rural and remote areas would significantly diminish the level of support provided to scholarship students for their education, and take away any incentive to work in rural and remote areas.

“The AMA has consistently encouraged the adoption of incentive-based workforce measures, like scholarships, to encourage more doctors to look at careers in rural medicine. But we are very concerned that the ATO wants to make the Medical Rural Bonded Scholarship (MRBS) scheme, and similar programs, subject to income tax,” Dr Gannon said.

“Scholarships provide important financial support for a student's education, and governments have used these to encourage doctors and other health professionals to work in country Australia. It makes no sense to tax a Government-funded scholarship that is targeted at addressing community need.

“The Government must immediately rule out the ATO plan, before it undermines broader efforts to build a stronger and more sustainable rural medical workforce,” Dr Gannon said.

The AMA submission to the ATO Review

Full media release