NDIS teething troubles persist

In his litany of self-praise to mark the 10th anniversary of his election as prime minister, Kevin Rudd listed the National Disability ­Insurance Scheme among his top achievements. Time will tell. The ultimate success or failure of the scheme will depend on the work of the Turnbull and future governments. As the Productivity Commission noted four weeks ago in its review of the scheme’s costs, the NDIS is “the largest social reform since the introduction of Medicare”. In a sobering warning, the commission said the scale and pace of the scheme’s rollout “is highly ambitious, and will not be delivered as scheduled in terms of participant intake”. The schedule “risks the National Disability Insurance Agency not being able to implement the NDIS as intended and it poses risks to the financial sustainability of the scheme”. On the positive side, it found the NDIS was improving the lives of many participants and their families.

Disabled Australians needed and deserved better services for many years, which is why this newspaper supported the concept of the NDIS from the outset. But we were also critical of Labor’s “promise now, pay later strategy” and the haste with which Julia Gillard implemented it. By leaving the critical issue of funding for later, we warned in 2012 and 2013, Canberra and the states faced a major task to work out how the scheme should operate. They still do. Judging by the tens of millions of dollars being spent on consultants by the NDIA, teething troubles are far from resolved.

At this stage, the NDIS is top heavy with administrative and organisational costs. Leaked financial records from inside the scheme, reported this week by Rick Morton, show that more than $180 million has been spent on consultants and contractors in the past 16 months, mainly on “strategic advice” from private companies. This is treble what was spent in 2015-16. Social Services Minister Christian Porter and his department must ensure such money is spent efficiently. The fact the Boston Consulting Group was brought in to overhaul a poor planning system that had become the scorn of people with disabilities and their carers shows serious mistakes have been made. Early support plans, as Morton reported, were made on the basis of telephone interviews, with beneficiaries having little or no understanding of what had transpired. Hard decisions also will be needed about eligibility for assistance. As the Productivity Commission noted, applications for assistance for children with autism and intellectual disabilities are higher than expected.

The NDIS, which cost $5 billion last financial year, is within budget and already has 120,000 people with disabilities on its books. By mid-2020 it is scheduled to be looking after 460,000 disabled people at an annual cost of $22bn. Future funding, however, is uncertain. The government’s proposed increase in the Medicare levy, from 2 per cent to 2.5 per cent from mid-2019, to pay for the ongoing rollout is unlikely to pass before parliament rises for Christmas. The opposition wants the increased Medicare levy restricted to those earning $87,000 or more. That stance is directly at odds with Gillard’s “we are all in this together” rhetoric when she and state leaders rushed the NDIS into place in 2012 with a series of complex bilateral agreements. If the NDIS is to be a sustainable universal scheme, it should be funded with a universal levy.