NDIS never intended to be a welfare magic pudding

Given the level of community need and enormous costs involved, it is essential that the workings of the National Disability Insurance Scheme be reviewed regularly. Since the scheme was rolled out nationally in 2016 without a clear plan for economic sustainability, several problems have become clear. The NDIS system, which soon could cost more than Medicare to deliver, is widely considered to be overly bureaucratic. Some who need support cannot get it. Others who enter the system with specific childhood needs are continuing on with funding well into adulthood.

State governments that used to cover some of the costs now picked up by the NDIS have withdrawn the contribution they were making.

It is a fact of life that demand for assistance will always be greater than the community can sensibly provide. Some of the services delivered cannot easily be considered specific to disability. As vital as the NDIS is, financial necessity dictates it cannot be a magic pudding. The NDIS was introduced following a 2010 Productivity Commission public inquiry into long-term disability care. The commission’s report, published in July 2011, said an NDIS should minimise the impacts of disability cost-effectively and provide individually tailored, taxpayer-funded support. According to the commission, individuals receiving support through the NDIS should have a disability that is, or is likely to be, permanent, and those receiving support should be reassessed periodically, with a focus on key transition points in their lives.

Half a decade on from the national rollout, the federal government is wrestling with cost blowouts and a scheme that bears little resemblance to what was recommended. While the scheme was intended for Australians with the “most significant and permanent” disabilities, there are many more young children with autism and early developmental issues. Many are not leaving the scheme as the government had thought they would. The average cost of an NDIS package per individual is now more than $50,000 a year.

NDIS Minister Linda Reynolds has warned that changes are needed to address the blowout in funding costs and to ensure the scheme could last for generations, declaring “the states and territories have a responsibility as well”. While the NDIS started as a 50-50 financial split between the federal and the state and territory governments, the original agreement left the federal share uncapped while the states’ payments were capped at a 4 per cent annual increase. Funding increases for the states have been lower than the annual cost growth in the scheme, leaving the federal government responsible for 55 per cent of the scheme’s fast-rising costs and on track to fund more than 60 per cent by 2025.

The federal position is the NDIS was never designed to cover all 4.5 million Australians with a disability, but state governments had withdrawn their own assistance, putting more pressure on the NDIS. Senator Reynolds is stating the obvious when she says the program is “not sustainable” and never was intended to function as a welfare scheme. The federal opposition accused the government of declaring war on the NDIS.

Caring for the vulnerable in our community should be above party politics. Senator Reynolds is correct to say it is taxpayer money that is at stake. For the scheme to continue to enjoy strong community support, it must demonstrate that it is fit for purpose. This includes qualification rules that ensure those who genuinely need support receive it.

But there also must be a tight focus to avoid over-servicing or overcharging for services simply because they are paid for by the taxpayer. A tightly focused scheme to support those most in need is what was intended.