Cost cap urged for ‘flawed’ NDIS

THE Coalition’s Commission of Audit will today recommend the Abbott government cap the cost of the national disability insurance scheme.

THE Coalition’s Commission of Audit will today recommend the Abbott government cap the cost of the national disability insurance scheme and slow down the timetable for its full rollout to control its ballooning cost to the federal budget.

The recommendations come after Amanda Vanstone, one of the authors of the Commission of Audit’s report, which will be unveiled today, told a political breakfast yesterday that the designers of the scheme were “criminally negligent” and its costs were out of control.

Taking questions at a fundraising breakfast for the Liberal MP Josh Frydenberg, Ms Vanstone said the NDIS was flawed because of the way that the former Labor government had constructed it.

A source said Ms Vanstone, whose portfolios as a minister in the Howard government included community services, made it clear that the commission of audit had determined the scheme was unaffordable and needed major adjustments to ensure it was put on a sustainable long-term footing.

The commission’s final report will be released today by the group’s chairman, businessman Tony Shepherd, and fellow ­commissioners Peter Boxall, Tony Cole, Robert Fisher and Ms Vanstone.

It may not be clear until the May 13 budget how many of the report’s 86 recommendations will be accepted by the government.

Joe Hockey last week released figures from the audit report showing that spending on the age pension, the Disability Support Pension, hospitals, schools and the NDIS were growing too fast compared with other government programs and with overall economic growth.

The cost of the age pension alone was forecast to rise from $39.5bn this year to $72.3bn in the next decade, with the NDIS costing $11.3bn a year by 2023-24 and the cost of the DSP rising from $15.8bn to $25.2bn.

When fully operational in 2019-20, the NDIS is expected to cost $22bn a year, including state government contributions.

In July 2011, a Productivity Commission report recommended the current design of the NDIS and that it be launched this July, with the intervening time used to prepare. A month later, the Gillard Labor government announced it would build the scheme and by December 2011, had committed to launching four locations — in NSW, South Australia, Tasmania and Victoria — in July last year, 12 months earlier than recommended and two months prior to the federal election.

A source who had seen the report said the commission supported the NDIS, but recommended it be made “affordable”. It recommended the scheme’s costs be “capped” and that the scheme be slowed and not “rushed”, declaring that the full rollout by 2019-20 was too ambitious. A source said the commission also believed the eligibility rules for access to the NDIS should be tightened. “The report says there needed to be stricter controls over the budget of the program,” the source said.

Labor and disability groups fear the timetable for the full rollout of the NDIS could be pushed beyond July 2019, after reviews of its costs and coverage.

Tony Abbott, who attended the launch of the National Disability Insurance Agency’s head office in Geelong, said his government was committed to the NDIS, but the economy and budget must be fixed for it to be properly rolled out.

The Prime Minister said people with disabilities should not be on the “margins of society”.

“This is a watershed for our society ... a better way of living for almost half a million Australians,” he said.

The minister responsible for the NDIS, Mitch Fifield, said yesterday the timetable for the rollout of the NDIS was embedded in a series of intergovernmental agreements between the commonwealth and the states and territories, and could be changed only with agreement.

“Next to that, the board of the agency has commissioned KPMG to do some work, to look at the capability review which had previously been announced to see if that has any implications for the current timetable. And if there are any implications then the independent board of the agency will advise all Australian governments on that,” Senator Fifield said.