Fears of NDIS cost blowout and delays

The NDIS is in danger of missing its target by 90,000 people in 2020 amid growing concern about delays.

Social Services Minister Christian Porter said the NDIS was facing a ‘whole range of challenges”’to deliver services on time and on budget.

The National Disability Insurance Scheme is in danger of missing its rollout target by 90,000 people in 2020 amid growing concern about delays, while a survey reveals ­almost two-thirds of Australians are worried about cost blowouts.

Social Services Minister Christian Porter said the $22 billion program was facing a “whole range of challenges” to deliver services on time and on budget, warning that the tight schedule was an ­“estimate” from Labor’s last year in government.

The scheme is already 20,000 plans behind target and is expected to triple its workload in the next three years, as authorities admit to “cost pressures” from the gap between their early forecasts and the actual cost of delivering help to Australians with disabilities.

A special Newspoll, conducted exclusively for The Australian, ­reveals that 19 per cent of voters are “very worried” about cost blowouts at the NDIS while 46 per cent are “somewhat worried”.

The concerns were greatest among the government’s supporters — with 67 per cent of Coalition voters worried about blowouts — but were shared by Labor and Greens voters, with 65 per cent and 60 per cent concerned respectively. Missing the deadline for the full rollout means an estimated 90,000 people will not get the services originally scheduled for their care in 2020, based on a performance to date that is running at about 80 per cent of estimated numbers.

The delay also means federal and state governments will be able to put off spending billions of dollars for at least one year — even as Malcolm Turnbull and Scott Morrison seek the Senate’s approval for an increase in the Medicare levy from 2 per cent to 2.5 per cent from July 2019.

In his budget speech, the Treasurer said the federal government would start the increase in two years “when the extra bills start coming in” from the NDIS.

While 54 per cent of voters supported the higher Medicare levy in a Newspoll survey two weeks ago, the two major parties have split on the issue, with Bill Shorten declaring the higher rate should be waived for anyone earning up to $87,000 a year.

The latest Newspoll shows ­majority support for the Labor ­approach, with 56 per cent of voters saying the higher rate should apply only to workers on more than $87,000 and 33 per cent saying it should be applied to all workers who pay the existing levy.

The government has widened the exemptions for the Medicare levy to ensure more than nine million adult Australians do not pay it at all, but Labor is turning the issue into a test of fairness by arguing that ordinary households cannot afford the tax increase.

A worker earning $70,000 a year would pay an extra $350 a year in Medicare levies under the changes, which the government argues are fair because they only require an extra “$1 a day” to fund disability services — an argument Julia Gillard used to justify a similar increase in the levy in 2013.

While the levy hike will provide a stable revenue stream to help fill a federal funding gap of $55.7bn over the next decade, the tax increase will begin well before the NDIS reaches the rollout estimate that is the basis for the $22bn price tag for the scheme. “The only certain thing is that it won’t be precisely 460,000 on a precise date in 2020,” Mr Porter said. “That figure was an estimate of a number in an estimated timeframe.”

When pressed whether the ­“estimate” would be reached at any stage in 2020, Mr Porter said he could only rely on past experience. “I can only base future positions on present positions and consistently during the trials we’ve been at about 80 per cent of the estimated numbers,” he said.

“Rolling out from trials at 30,000 people to the full scheme is a massive enterprise; the scale of it is simply enormous and it comes with a whole range of challenges.

“None of the challenges we are seeing arise are necessarily un­expected and none of them is ­insurmountable.”

If the outcome is in line with Mr Porter’s 80 per cent estimate, that means 20 per cent of the 460,000 people will not get their services in 2020, which means about 90,000 will have to wait.

The National Disability Insurance Agency, which runs the program, has acknowledged a ­litany of “cost pressures” and a significant mismatch between what it says are benchmark package prices for individuals and the ­actual cost of the support.

“We have absolutely no plans to change the legislation,” Mr ­Porter said.

“There have been a variety of views expressed on that but we are approaching the rollout to full scheme on the basis that the defined parameters of the legislation on things like eligibility and reasonable and necessary support are fixed.”

He said the key cost pressures facing the scheme could be dealt with inside the agency but there were other concerns.

“Ensuring that we’ve got planning which is of a consistently high standard is an ongoing issue, and there are no doubt improvements that can be made,” Mr Porter said. The scheme could be kept on track, he said, within the current governance arrangements but longer term “modest” reform would be needed.

Health Minister Greg Hunt yesterday accused Mr Shorten of “abandoning the NDIS … and his principles” in his refusal to back the half-percentage point rise in the Medicare levy on all income tax brackets.

Mr Shorten called any suggestion his party had walked away from the scheme “offensive”.

“Labor has a plan that is better and fairer for the budget, which raises $4.5bn more,” the Opposition Leader said.

“We reject the notion that the only way to protect the NDIS is to raise taxes on working and ­middle-class Australians.”