Brisbane NDIS providers facing mass closure amid high operating costs

NDIS-registered Brisbane disability providers are being strangled by the cost of meeting quality care standards, resulting in mass staff cuts and business closures, industry insiders have warned.

The peak body for disability providers says a string of Brisbane NDIS providers have closed their doors and that could snowball further, with providers facing budget deficits upwards of $150,000 and have been forced to cut services.

A mass exodus of NDIS registered providers throughout Brisbane could soon be on the cards, industry insiders say, as those providers struggle to meet the steep compliance costs to meet NDIS standards, with wages booming and costs for their services not keeping up.

National Disability Services (NDS) CEO Laurie Leigh said the NDS is deeply concerned about the number of high quality providers that are exiting the market and that many others that have indicated that they are not far behind.

“NDIS pricing is being reviewed right now – we need an immediate price uplift in pricing for the sector to remain viable,” Ms Leigh said.

“If this is delayed, market failure is already occurring and will snowball further.

“We’ve struggled with keeping services going in remote areas but this isn’t the outback, even in a metro area we are still seeing market failure – something must change.

“Our recent State of the Disability Sector survey data paints a stark picture, with 52 per cent of providers reporting losses or just breaking even in FY 2022-23, the highest rate since we began collecting financial data in 2016.

“At the end of the day it is people with disability who will be impacted most, without the choice and availability of services that they need to thrive.”

National Disability Services (NDS) CEO Laurie Leigh said the NDS is deeply concerned about the number of high quality providers who are exiting the market. Picture: Contributed

Penny Deavin, CEO of Muscular Dystrophy Queensland, said it has been running at a budget deficit for four years and have had to relocate their office from Nundah to Logan and cut staff to stay afloat.

She said MDQ would need to fund another $150,000-$180,000 to address the budget shortfall brought about by the gap between NDIS funding and operational costs.

“It seems the NDIS has not raised its prices because there are small businesses making money, but for a quality of service, the cost of compliance is too high,” Ms Deavin said.

“Therapy services hasn’t had a price increase since December 2018 and intermediary services, December 2019.

“The wages increase alone last year was 5.4 per cent, which was an extra $130,000 for us.

“A lot of organisations that were funded under the previous Queensland Government system and moved into the registered NDIS providers structure, undergoes an audit that is very strict.

“The audit cost alone is $10,000 and there’s a big administrative cost in meeting those practice standards and quality indicators.

Penny Deavin, CEO of Muscular Dystrophy Queensland, says they have been running at a budget deficit for four years. Picture: Contributed

“We’re comfortable doing it because it’s the right way to run an organisation and ensures a quality service is available.

“We can’t charge more per hour for our quality service provision than an unregistered provider, who doesn’t have an ABN and goes on a group hire website.”

Ms Deavin said MDQ’s board made the decision to top-up funds to address the deficit in support coordination services, to keep their 135 clients on the books.

“It’s not a position we can continue for many years and we will review it on June 1,” Ms Deavin said.

“Organisations with similar models to us and without the cash reserve have closed their doors.

“We’ve been in existence since 1978 and run our finances to generate a small surplus each year, which we invest in the sustainability of the organisation.

“The last five years that hard work has been chipped away and I don’t know when we’ll get the opportunity to build those reserves.

“Organisations like ours were founded and exist for the community and if we’re not meeting their needs, there’s no point in us being here.”

Home Care Nurses Australia CEO Busi Faulkner said NDIS providers cannot rely on just NDIS services and must have multiple sources of income to stay afloat. Picture: File

Home Care Nurses Australia CEO Busi Faulkner said NDIS pricing has to change now and NDIS registered providers can’t rely on just providing NDIS services.

“You can’t rely on the NDIS, you need multiple sources of income,” Ms Faulkner said.

“We do labour hire and home care packages.

“If you do strictly NDIS, you’ll wake up one day and you have to declare bankruptcy immediately.

“At some point I think a lot of providers are going to exit because it’s too risky

“You’ve got to have a small number of clients to survive.

“We used to have 37 clients, now we have 17.”

Ms Deavin said despite the challenges facing providers, a NDIS plan changes people’s lives.

“I’ve never worked in a sector with so many good people who are invested in creating outcomes for people who are less fortunate,” Ms Deavin said.

“We’re doing it tough but we want to stay open and continue supporting people.”

Originally published as Brisbane NDIS providers facing mass closure amid high operating costs