NDIS risk ‘too much for our influence’

The federal government is ­increasingly worried about the amount of risk it carries in ­relation to the $22bn NDIS.

Chair of the national disability insurance scheme Bruce Bonyhady.

The federal government is ­increasingly worried about the amount of risk it carries in ­relation to the $22 billion national disability insurance scheme compared with the amount of influen­ce it has over decision-making, according to senior ­government sources.

The current arrangement — where the federal government bears 100 per cent of the risk for cost overruns in the trials and about 75 per cent during the transition to the full rollout — is “completely disproportionate” and one of the key reasons for an impending shake-up of the agency­’s board.

Chaired by NDIS architect Bruce Bonyhady, the board is made up of few people with experien­ce running large businesses or insurance organisations but, crucially according to some within the Coalition, they are also proxy state government representatives.

The NDIS is a joint program run between the commonwealth and state and territory governments, with agreement from all parties required under the act regardin­g board appointments.

“There is no question the states want very different things from the NDIS than the federal government,” Intellectual Disability Association of South Australia chairman David Holst told The Australian.

“What the states want and what they should be doing in relation to disability are diverging. If the premiers can get funding for their kids through the NDIS instead of, say, the education system, then that is a massive win for them.”

Mr Holst, who also runs a car retail business with $650 million in annual turnover, is a disability campaigner in South Australia, where the state government appear­s to have deliberately obscure­d the number of children with autism in order to save money during the NDIS trial.

He said bringing more experienced board members on to the massive scheme would solve two problems in terms of governance: skills and influence from the states.

“The board is seriously lacking in people that are prepared to innovat­e, it is driven by political appointments that might realise government outcomes but not consumer outcomes,” he said.

“They all have a political correctness about them that some would argue stifles fresh ideas and new thinking.”

Mr Holst said state governments viewed the NDIS as a means to step out of the service space altogether, even though the scheme is meant to cater only to the most profoundly disabled.

Not all state government ministers are counting on the NDIS to carry the load, however.

When he was still NSW treasurer, Andrew Constance gave a speech to the Sydney Institute in which he said it made more sense for the federal government to take full responsibility for the NDIS by asking “whether we should, in the federation white paper process, find a way for just one level of government to pay the whole bill”.

Although currently states and the commonwealth pay roughly half of the full scheme costs, the federal government will need to find about $5bn after 2020 on top of money raised from the Medicare Levy rise and savings from cancelled payments to the states. It wants controls on governance that will keep a lid on costs.

The government commissioned a report into the board’s skills from business consultancy KordaMentha, which noted the NDIS was unique in Australia but of a similar size to the NBN company and needed people with higher-quality skills to run it.

The government circulated position descriptions for the roles, which stated candidates should “have experience as a senior manager or chief executive officer­”.

A spokesman for federal Socia­l Services Minister Christian Porter told The Australian the roles all expired at the end of June. “The appointment of National­ Disability Insurance Agency board members is the respons­ibility of the Disability Reform Council, which includes members from all states and territories,” the spokesman said.

“The … council is currently considering the extension of board members to ensure a thorough recruitment process. This will enable the selection of the right mix of knowledge, skills and experience for the board.”