Australians have every reason to be proud of our National Disability Insurance Scheme. Introduced with bipartisan support, it has been, by any measure, a great success. The lives of hundreds of thousands of vulnerable Australians and their families have been transformed for the better. Yet despite this record of success, the NDIS has a giant target painted on it and has become the program that many people love to hate.
As its cost reaches almost $45bn a year – and more than 660,000 Australians now have funding packages – attacks on the sustainability of such a monolithic social program have reached fever pitch. Some accuse it of “strangling” the private sector, others rage against what they see as fraud, overspending, and mismanagement. Still others point to disastrous outcomes for participants.
Where does the truth lie? Is the scheme a really a giant white elephant sitting squarely on the chest of our economy?
A dozen years after the NDIS was introduced it is easy to forget just how bad disability supports were in this country. As far back as 1974, the Woodhouse Report advised the Whitlam government to institute an NDIS-like system. Whitlam was dismissed before any legislation could see the light of day, and the privations suffered by many Australians with a disability and their families continued to worsen.
By the dawn of the new millennium, tens of thousands of people with major disabilities lived lives of social isolation, unemployment, impoverishment, and commonly a major burden fell to their families. After years of kicking this can down the road, Australia became a signatory of the UN Convention on the Rights of Persons with Disabilities in 2007, the result of strong and spirited advocacy from disability and carers’ groups. At the time, no-fault schemes were up and running in NSW and Victoria. These funded supports for some people with acquired disabilities but little was available for people who were born with them.
In 2009, the Productivity Commission was tasked to come up with a plan to overhaul the broken system. The resulting report shocked many Australians. “The current disability support system is underfunded, unfair, fragmented, and inefficient,” the report read. So bad was the pre-existing system that the commission found itself “overwhelmed by the social and economic disadvantage manifest among people with a disability and their families – and the inability of the existing system to cope”. Evidence was heard of carers contemplating “murder-suicide” plans, so intolerable were the lives of many Australian families struggling to find help.
The “system”, as it was, seemed to lurch from crisis to crisis. Indeed it barely qualified as a system at all. Yawning service gaps were found across all of the states. Many people outlived family members who cared for them, and carers were under immense pressures and were found to have the lowest levels of wellbeing of any Australians. People with similar levels of disability received head-spinning differences in the levels of support they received – this was so bad the Productivity Commission described it as a lottery.
The report recommended a national social insurance scheme to provide certainty for every Australian in the event of a major disability. The resulting NDIS is almost unique globally and we should be proud of this. Similar but smaller-scale schemes operated in some European countries but were opt-in. In Australia, the NDIS was to become compulsory. Our trailblazing path also meant, of course, that there was no blueprint to follow from overseas. A scheme so ambitious, so large in scale and scope, and of such complexity was always going to experience a difficult birth. Yet “the benefits of the scheme would significantly outweigh the costs”, the report stated.
Before the NDIS, state and territory governments provided so-called “block funding” to disability service providers to deliver services – the funding then was rationed out to recipients of services. Supports might include care at home, day activity centres, or other services. The level of service and support varied between and within states, and there often was little or no choice. Even changing providers could be a challenge.
The NDIS flipped this completely by providing the funding to the person, not the organisation. The NDIS was all about putting Australians in charge of their own plan. The person with the disability was better placed to determine what they needed than to have external providers impose “one-size-fits-all” solutions on them. The NDIS would fund “reasonable and necessary supports” to allow people to live their lives in a way as ordinary as possible. Such supports could vary, from having personal care at home, to buying aids and equipment, funding various therapies such as physiotherapy, increasing social participation, and purchasing transports.
To be eligible for NDIS funding a person has to have a permanent disability that has substantially reduced their intellectual, neurological, physical or social functioning. Because of this strict definition the great majority of the millions of Australians who have a disability aren’t eligible for NDIS funding – only about 10 per cent meet the criteria. The NDIS also was not designed to replace the Disability Support Pension, which provides income for living. It is about additional costs, such as a wheelchair or home support.
Applying for NDIS support is not easy. It requires paperwork proving that the applicant’s disability is permanent and substantially reduces their capacity to undertake activities of living. Independent medical assessments were instituted to avoid “sympathy bias”. Packages are declined if the person’s condition has treatments available that could alleviate the disability.
So far, so good. The next step was funding a scheme that was hailed as the greatest social policy initiative since Medicare. The Productivity Commission recommended the commonwealth be the single funder of the NDIS, although this did not end up being the long-term reality. The initial funding boost was an increase in the Medicare levy from 1.5 per cent to 2 per cent. The NDIS was to be controlled by the National Disability Insurance Agency, designed from its inception to be independent of government – for that read “political meddling”.
The NDIS was introduced carefully over seven years, but so massive was the undertaking that it was described as like a plane taking off while still under construction. The first trials were in 2013, and the full national rollout began in 2016 with NDIS being accessible across all states and territories by 2020. With that rollout, states and territories quietly defunded legacy programs. As a consequence, much of the funding for people who have a disability but don’t qualify for the NDIS has dried up.
More than a decade since first trials of the NDIS, where do we find ourselves? By any measure the NDIS has been transformative for hundreds of thousands of Australians. Unpaid carers have returned to the workforce and those already working have been able to work for longer. Many package recipients themselves can enter the workforce, often for the first time. Countless lives have been improved and dignity has returned to a generation of Australians.
The NDIS behemoth has been the largest social reform most of us have lived through – and that makes the NDIS a large target. Indeed, it draws a lot of fire and ire. Absolutely there are problems with the scheme – as you would expect with any massive national project – but it is important to be clear that the NDIS well and truly delivers on most of its aims, and delivers handsomely.
It is important to take a close look at public criticisms of the NDIS; first and foremost is the cost of the scheme. The Australian Institute of health and welfare reports that roughly one Australian in six has some form of disability. Fortunately, for the majority of people, their disability is not too disruptive. However, for many people the effects of their disability have a greater impact on their lives. Although the Productivity Commission estimated that just over 400,000 people would be eligible for NDIS support, at the moment more than 660,000 Australians are receiving packages. Why were the commission’s predictions so wonky? The main reason is that states and territories provided woeful statistics to feed into the commission’s models. This speaks to the low priority state governments gave to Australians with a disability at the time.
The fact that autism now is the most common primary diagnosis for persons funded by the NDIS is regularly aired as evidence of something suspicious. Indeed, about a third of all funded packages are for autism. Intellectual and mental health conditions are the most common disabilities experienced by Australians, as occurs globally. Research into autism has been intense in recent years and this has seen many people who formerly were told they had “intellectual disabilities” now recognised to have autism as the underlying condition. Whereas mental health conditions may wax and wane, autism is commonly pervasive and lifelong.
Could it be that the presence of the NDIS has fuelled a tsunami of bogus “autism” diagnoses? The reality is that the diagnosis of autism for teenage Australian children, as reported by the scientifically watertight Longitudinal Study of Australian Children, was one in 23 before the NDIS existed. The current rate is actually lower now – at about one in 31 children – after the NDIS was supposed to have driven the rate up. The proportion of people with autism in the scheme has indeed increased, but only by about 6 per cent over the past seven years. Australia’s current rate is in line with comparable countries such as the UK, the US, and even Japan. Packages for autism average just over $30,000, in comparison to supported living packages which are almost 10 times higher. It is likely that, rather than the NDIS luring bogus claims, in most cases people now have a source of support that was not available in the past.
Another factor is that exit rates – the number of people leaving NDIS packages – are lower than predicted. People are opting to stay in the scheme rather than move to other forms of care – which would cost the government money anyway. Another factor is that people who were assumed to be receiving suitable care in existing schemes were, in fact, receiving poor quality care. They very sensibly decided to take the superior packages on offer with the NDIS.
What about the $45 billion yearly price tag? Surely that is a fiscal fiasco? Well actually it isn’t. The scheme’s packages directly employ 270,000 Australians, and providing associated services employs many thousands more. A conservative estimate is that every dollar spent by the NDIS generates $2.25 in economic activity. That money isn’t hoarded – it is spent and most of it goes to small business and sole traders. They pay tax and also spend on goods and services. NDIS spending is a major economic stimulus.
Let’s compare this to defence spending where each dollar only generates about $1.70 in economic stimulus. Putting this in economic terms, NDIS spending is better for the economy than defence spending, where much of the money goes overseas. Defence also regularly clocks up monstrous cost overruns – $5bn wasted on disastrous helicopter programs, more than $1bn lost for battle management systems. In comparison to the profligacy of defence losses, the NDIS is a model of prudence and frugality.
In response to political concerns about NDIS expenditure, a razor gang went through the schemes in 2022 with average packages being trimmed by about 4 per cent and one third of people taking a haircut of greater than 5 per cent. Family members who had returned to the workforce had to quit again to take up the slack at home. Since that time the number of people disputing NDIS decisions has increased by an incredible 400 per cent. This blowout not only disrupted the lives of deserving people but piled additional legal costs on the NDIA. The Administrative Review Tribunal adjudicates on disputes where people protest against NDIS decisions. These wrangles cost more than $17m a year in legal fees to the government.
Naturally, where there is government money there is the potential for fraud. No surprises there. This is well recognised by the NDIA and fraud management processes encourage package recipients to report suspected misconduct – from other recipients and providers. It is impossible to imagine a multibillion-dollar scheme funding hundreds of thousands of providers that doesn’t attract some rorters, scammers and outright crooks. Investigations show that malicious fraud costs the scheme less than $50m a year – a lot, to be sure, but a small proportion of the total spend. Although it is difficult to estimate, audits suggest that less than 5 per cent is inappropriately spent. Let’s compare that to Medicare, where Pradeep Philip’s recent comprehensive review suggested that somewhere around 12 per cent of expenditure was potentially subject to issues with compliance.
There are undoubtedly some big problems with the NDIS that are much more difficult to tackle and cause major difficulties. With the incredible demand for disability services, there simply are not enough staff, not enough providers, and major geographical restrictions on service availability. So bad is this problem that many package recipients have no way to spend the money the receive – disability services are not sufficient to provide the care they need.
The risk of poor-quality services is another concern. The NDIS Quality and Safeguards Commission was set up to protect participants from poor-quality care. Many providers must become “registered” with the QSC as a quality measure. Yet this system is hardly a guarantee of quality; the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability unearthed myriad cases of dreadful care from registered providers. Becoming a registered provider is challenging, an exercise in navigating through a sea of red tape. For this reason many smaller providers choose not to become registered to avoid the expense and stress. Unfortunately, commentary often paints “unregistered providers” as villains and shonks but this is far from the truth. Many NDIS recipients greatly value their flexibility, cost-effectiveness – and because they are the only option.
Another issue affecting costs is that registered providers must abide by the NDIS price guide that sets out price ranges with price ceilings. Naturally, providers are going to set their prices at the maximum allowed. This is known as the “disability mark-up”. Providers in a tight market will look to cherry-pick the “easy” participants and often find it uneconomical to provide services in regional areas. The NDIA itself is overwhelmed by demand and struggles to find staff – as anyone applying for a package knows well.
Is the NDIS delivering what it promised and what so many Australians desperately needed? Yes, and no – but mostly yes.
Australia now has a world-leading system that aims to provide care for people with serious disability no matter who they are, how their disability came about, and where they live. Any scheme the size and scope of the NDIS will have problems – just look at the average home renovation. At the moment, though, the NDIS is delivering for hundreds of thousands of Australians. Its problems can be addressed without the need for hysterical hype.
Steve Robson is professor of obstetrics and gynaecology at the Australian National University and a former president of the Australian Medical Association. He is also a council member of the National Health and Medical Research Council.
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