NDIS gets $1b injection to slow growth even as budget slides into deficit

The federal government will spend $1 billion as it reboots assessments for the National Disability Insurance Scheme after years of argument about who should qualify for support, scaling up the key agencies charged with bringing its spiralling costs under control.

The investment in 1000 more staff and a crackdown on NDIS fraud are part of a broader spending program to be revealed in Wednesday’s mid-year budget update, adding to a series of changes that are slowing the growth of the $47 billion scheme but also revoking people’s plans at higher rates.

Labor is spending $1 billion more on the NDIS in a bid to curb the growth of the scheme.Credit: Marija Ercegovac

Labor will use the budget update on Wednesday to reveal $16.3 billion in new spending over four years on government payments, such as the aged pension, while also blaming “unavoidable” factors for adding another $8.8 billion to the cost burden.

Finance Minister Katy Gallagher will argue that the additional spending will be partly offset by $14.6 billion in additional savings and “reprioritisations” – scaling back spending in some parts of the government to spend the funds elsewhere.

The spending pressures add to recent warnings from economists about the grim future for the nation’s finances, with the Commonwealth on course for a deficit of about $42 billion this financial year.

With the budget sliding into years of deficits after two years of surplus, the government is anxious to scale back growth in the NDIS, having been warned that spending was on track to reach $97 billion a year within a decade. The $47 billion scheme is due to grow 12 per cent this financial year after peaking at 23 per cent in the final year of Coalition government.

The scheme’s actuary says the government is on track to limit annual growth of the NDIS to 8 per cent, down from about 20 per cent in recent years, but Labor says more staff and technology support are needed to enact major changes.

Under NDIS Minister Bill Shorten’s reboot, people will have to complete a new needs-based assessment before receiving a capped budget that lasts up to five years but has strict limits on how much can be spent a year.

Shorten said the expanded assessment team was good news for recipients who had to pay practitioners for lengthy reports – some of them up to 80 pages – to make their cases. “This new workforce of 1000 dedicated support needs assessors will put participants’ needs at the centre and improve the NDIS experience for people with disability,” he told this masthead.

“On the flipside, this will also free up allied health and medical professionals’ time to deliver supports, significantly reducing waiting times across the country.”

The spending includes $280 million to fund 1000 staff to conduct assessments. There is another $503.5 million to support current NDIS participants, $143.9 million for the NDIS Quality and Safeguards Commission and $110.4 million to boost fraud-detecting systems.

The changes add to months of uncertainty for participants as agency officials say they have been able to escalate efforts to reassess people’s eligibility since Shorten boosted staffing numbers last year.

The agency is reassessing about 1200 participants a week, with almost half of them moving off the NDIS as a result. Most are children, and officials say almost 80 per cent of children are exiting the scheme when they’re reassessed, easing a massive source of budget pressure.

A further $4.5 million in Wednesday’s budget update will go into designing an early intervention pathway for the NDIS so that children with mild autism and developmental delays are more easily identified and moved onto supports outside the scheme.

Skye Kakoschke-Moore, head of Children and Young People with a Disability Australia, said children were being kicked off the NDIS before a new system of supports across schools and childcare centres had been established.

“Because they have more staff to process claims, there’s a higher volume of children being exited from the scheme than we’re used to, and foundational supports aren’t there to capture those children and ensure they won’t fall through the gaps,” she said.

Jeff Smith, from the Disability Advocacy Network Australia, said people were anxious about Labor’s reforms. “That is why it’s important to move more slowly, explain what the changes mean, and build trust in the community,” he said.

The government will unveil savings in Wednesday’s mid-year economic and fiscal outlook, including $5.2 billion from aged care outlays to help pay for separate changes to the aged care system.

The government will also claim to have “reprioritised” $1.6 billion in defence spending and $7.8 billion in other savings, with the money put back into federal programs.

“We have worked hard to find responsible savings while also dealing with the significant spending pressures we are facing,” Gallagher said.

As well as the NDIS investment, the government is spending $3.6 billion to increase pensions in line with living costs and putting $3.1 billion toward childcare subsidies, as announced in the lead-up to the budget update.

There is also a $2.6 billion spending boost for schools, another $2.3 billion for Medicare and the Pharmaceutical Benefits Scheme, and $1.8 billion in additional funding for areas hit by natural disasters.

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