Budget scramble to fill National Disability Insurance Scheme hole

The government is hunting for more welfare savings to fill a shortfall in the National Disability Insurance Scheme.

Christian Porter insists the government is ‘fully committed’ to the NDIS. Picture: Colin Murty.

The government is hunting for more welfare savings in next week’s federal budget to fill a shortfall in the National Disability Insurance Scheme, triggering a clash with Labor over claims that the program was “fully” funded.

The savings will be needed to keep the NDIS on track to help 450,000 Australians with dis­ability within five years, forcing the government to choose ­between competing welfare priorities at a time of prolonged budget deficits. A compliance crackdown on the Newstart Alliance for the unemployed is one of the measures in the budget, along with other savings to be produced by auditing potential abuse of welfare programs.

The government is aiming to challenge Labor on the NDIS funding as early as next week by moving a bill to create a “future fund” to store the welfare savings and put them towards the dis­ability scheme.

Labor families spokeswoman Jenny Macklin told The Australian that Social Services Minister Christian Porter was guilty of an “effective theft” by failing to recognise the savings already made to pay for the scheme.

“The numbers underpinning these measures were done by Treasury officials, including Martin Parkinson,” Ms Macklin said.

“Not only did the Liberals vote for almost all of these budget measures, some of them even passed the parliament after the election when the Liberals were in government.”

Mr Porter told The Australian that the government was “fully committed” to the NDIS but ­rejected Labor’s claims that it had fully identified savings to fund the scheme. The NDIS was legislated in early 2013 at a time when Treasury was forecasting a budget surplus of $800 million this financial year. The latest budget update forecasts a deficit of $37.4bn instead.

Labor says it would pay for the new federal outlays with savings programs and an expanded Medicare levy, but it has claimed the benefit of the same savings several times and has left other savings unexplained.

The funding comprised $33bn over a decade from the additional levy, $6.5bn from cuts to the private health insurance rebate, $7.2bn from cuts to superannuation tax breaks and $20.6bn in “other” savings including tax increases, changes to import processing charges and changes to the indexation of tobacco excise.

The “other” savings were never outlined in detail, with Treasury official Nigel Ray telling a Senate hearing on June 5, 2013, that the numbers could not be broken down. Asked if he could further “disaggregate” the figures, Mr Ray said: “The short answer is no, ­because for one of those measures we cannot tell you at all what the out numbers are, and that is the change to the indexation of tob­acco excise.”

Another saving, to scale back superannuation tax breaks on fund earnings for the wealthy, was never legislated by Labor and was later rejected by the Coalition.

Labor has also been tested on its claim that its changes to the private health insurance rebate helped to fund the NDIS when it announced the savings in October 2012 to “partially offset” the cost of a dental health spending package.

At the time, treasurer Wayne Swan said the private health ­insurance rebate changes were part of an effort to control health expenditure.

Mr Porter was scathing of the Labor claims. “The golden rule of budgets is that you can only spend a dollar once. And yet Labor sees no problem with spending the same dollar three times,” he said.