Reform vital as PM admits NDIS costs unsustainable

The problems of almost a million people ­waiting for longer than nine hours to be seen in emergency wards in 2021-22 and the runaway costs of the NDIS are inextricably linked. With the National Disability Insurance Scheme set to overtake the cost of Medicare, and aged-care costs increasing to meet the needs of an ageing population, recurrent spending is under ever-growing pressure at the same time as defence spending needs to be ramped up.

One of the most constructive outcomes from Friday’s national cabinet meeting in Brisbane was Anthony Albanese’s frank admission that “the trajectory of NDIS expenditure is just not sustainable into the future’’. That trajectory, the Prime Minister said, “projects some $97bn on the NDIS over the medium term, so in 10 years’ time, when you look at the budget framework, that is simply not sustainable’’.

The NDIS was budgeted to cost $34bn this financial year, but actual costs are running higher. It is projected to cost $52bn by 2025-26.

To put those figures in perspective, in response to the crisis of overcrowding at hospital emergency departments, Mr Albanese announced $2.2bn in practical measures to strengthen Medicare. The announcement was made hours after this masthead’s health editor Natasha Robinson reported that the Australian Medical Association’s public hospital ­report card for 2021-2 showed that only 58 per cent of patients with urgent conditions presenting to emergency were seen within the recommended 30 minutes – the lowest level since the AMA began tracking performance in 2002.

In an effort to take pressure off public hospitals, the government will support pharmacists, nurses and paramedics to deliver more services that they are capable of providing. Mr Albanese wants to expand the nursing workforce to improve access to primary care, including after-hours primary care, provide incentives for GPs to stay open for longer hours and encourage GP attendance in residential aged-care homes. The May budget will also invest more in digital health. Time, and the AMA’s 2022-23 report card, will tell whether these measures prove effective but they were welcomed by the AMA and the Royal Australian College of GPs.

The public needs more than band-aid solutions, which is why the issue is an important test of the national cabinet system, post-COAG and post-pandemic. If Canberra and the states are to co-operate to deliver solutions in one of their most basic responsibilities – hospitals and healthcare, responding to health emergencies – funding arrangements and shared responsibilities, including funding for the NDIS, will be central to the process. Healthcare and ambulance ramping were major factors that influenced a change of government in South Australia last year. It could prove similarly important in future state elections, such as Queensland’s poll late next year.

National cabinet also needs to get the funding balance right, at federal and state levels, between the NDIS and other services, especially health. Australians, who are compassionate by nature, highly value the NDIS on principle as a safety net to improve the lives of the severely disabled among us, and those who become that way through accidents and other misfortunes. Yet while severe cases of autism are a serious disability, few taxpayers, at the outset of the scheme, thought that within a decade one in 10 boys aged five to seven in Australia would be an NDIS participant. As NDIS Minister Bill Shorten has said, state education systems need to be doing more to help the “spiralling numbers” of children with developmental delays.

“The NDIS was never intended to be the only lifeboat in the ocean,” he said.

Difficult decisions need to be made to ensure the scheme’s survival. As Mr Albanese said on Friday, when the scheme was introduced it was projected to grow at a rate of 4 per cent a year. The scheme has been growing in cost at between 12 and 14 per cent a year but the government was now aiming for an 8 per cent target. “We are trying, though, to recognise with an 8 per cent target by the end of the forward estimates – and then putting it on a further sustainable trajectory – to make sure that this scheme can continue to deliver,’’ Mr Albanese said. It was important not to “find ourselves in a situation down the track where the viability of what is a critical scheme … is drawn into question’’.

In addition to the growth of the scheme seen so far, even 8 per cent represents further significant annual growth, slightly above the current 7 per cent inflation figure. It is also a target, not a firm cap.

As Hassan Noura, the founder and director of People Economics and previously the general manager of strategy and priorities at the National Disability Insurance Agency told The Weekend Australian, the government has not said what it intends to do about eligibility for the program and cost per person.

Mr Shorten has foreshadowed a “reboot’’ of the scheme, which serves almost 600,000 people, and a major crackdown on fraud. Rebalancing the demands of the NDIS and Medicare will be one of Labor’s major public policy challenges.