NSW on board for critical NDIS reform

The federal government has won at least one state’s backing to permanently redraw the law underpinning the $22bn scheme.

NSW Premier Gladys Berejiklian in Sydney yesterday. Picture: Getty Images

The federal government has won the backing of at least one state to permanently redraw the legislation underpinning the $22 billion National Disability Insurance Scheme in a bid to regain control over how much money goes out the door and what risks must be taken into account.

An agreement between NSW and the federal government over the full rollout of the scheme — which has allowed the state to gain access to $3.1bn in Medicare levy revenue that has been locked away for years — contains a clause which says the “parties agree to introduce changes to the NDIS Act”.

Specifically, the changes would affect eight sections of the act that govern risk arrangements, how long participants can be overseas before their support package is suspended, rules relating to actuarial oversight and, crucially, rules that would allow Social Services Minister Dan Tehan to outline “criteria for deciding the reasonable and necessary supports” given to participants.

The two jurisdictions have agreed to change sections 35, 40, 44, 45, 46, 125B, 180C and 204 of the NDIS Act.

Currently, if the minister wants to make legislative rules regarding these sections of the act, he ­requires the unanimous agreement of all states and territories or, in two cases, majority agreement.

The former minister in the portfolio, Christian Porter, succeeded in making some new rules with the agreement of the states but they were one-off changes and any amendments to the legislation itself will be permanent.

However, amendments cannot be made without unanimous agreement. The Australian has confirmed that the deal signed by Malcolm Turnbull and NSW Premier Gladys Berejiklian is the form agreement that all states and territories will be asked to sign.

Under the bilateral agreements that govern the NDIS, signed under Julia Gillard’s prime ministership, states have disproportionate control over the scheme but bear few of the financial risks if things go wrong.

State contributions were fixed to a set rate of indexation — 3.5 per cent a year — but NSW agreed to lift its rate to 4 per cent, meaning its $3.2bn contribution in 2018-19 will now rise to $4.5bn in less than a decade.

“Commonwealth and state ­officials have been negotiating ­reforms to NDIS governance ­arrangements that would simplify decision and rule-making for some time,” a spokeswoman for the National Disability Insurance Agency told The Australian.

“The Disability Reform Council considered the proposed changes on 30 April and noted the commonwealth will proceed to draft and consult on amendments to give effect to the streamlined governance changes, including for NDIA board appointments and for some NDIS rule changes to only requiring consultation or be based on majority agreement rather than unanimous agreement.”

Mr Tehan declined to comment yesterday.

The new push for legislative ­reform of the NDIS comes as its latest quarterly update is released this morning.

It shows the rollout has slipped even further behind schedule and has now reached just 78 per cent of targets.

More than 160,000 people are now part of the NDIS.