The Northern Territory is tackling its critical aged care shortage head-on through significant payroll tax reforms that will exempt charitable organisations from taxes previously imposed on their “commercial” activities.
Announced as part of Budget 2025-26, the Finocchiaro CLP Government’s changes will eliminate longstanding barriers that have discouraged investment in essential services across the Territory, particularly in the aged care sector where the NT currently faces the highest occupancy rates and lowest bed availability in Australia.
“This important change to the Payroll Tax Act 2009 helps create a more attractive environment for aged care providers to step in and invest in the Territory and build the beds that need to be built,” said Health Minister Steve Edgington, highlighting the reform’s potential to address the Territory’s healthcare bottleneck.
The changes come as the Territory’s hospital system struggles under the weight of aged care shortages, with approximately 80 hospital beds in Greater Darwin alone being occupied daily by patients who should be in dedicated aged care facilities.
“This reform helps free up hospital beds, grow the aged care sector, and ensure our seniors get the care they deserve,” explained Treasurer Bill Yan.
The hospital bed shortage has created a domino effect throughout the healthcare system, limiting access for acute care patients and straining resources across medical facilities.
Effective 1 July 2025, the reforms will bring the NT into alignment with other Australian jurisdictions by scrapping the “commercial and competitive” test that previously blocked payroll tax exemptions for charities delivering essential services.
“We’re making the system fairer, simpler, and more supportive of the organisations that serve our community,” said Mr. Yan. “This means more money going into local services.”
The reform package includes amendments to the Payroll Tax Act 2009 that will:
- Remove the ‘commercial and competitive’ test for exemptions
- Align Territory law with the rest of Australia
- Cut red tape for charities and government
- Encourage investment in aged care, disability support and childcare
Territory officials have pointed to gaps in Commonwealth funding as part of the problem, with Minister Edgington noting, “Aged care is a Commonwealth responsibility, and the Northern Territory is not receiving its fair share of funding because there are insufficient registered aged care providers.”
By creating a more favourable tax environment, the government hopes to attract new providers to the region and expand existing services.
“By reducing financial barriers and broadening eligibility, we’re encouraging more not-for-profit entities to establish services here by improving access and choice for our seniors and ensuring older Territorians receive the quality care they deserve,” added Edgington.
The legislation to enable these changes is expected to be introduced this month as part of the CLP Government’s broader commitment to “action, certainty and security for all Territorians.”
Ritchelle is a Content Producer for Healthcare Channel, Australia’s premier resource of information for healthcare.
