Labor MPs fear Bill Shorten ‘losing control’ of NDIS deal with states

Labor MPs say there is ‘growing concern’ in caucus about the absence of costings and modelling in an NDIS deal that premiers are now revolting against.

Illustration: Emilia Tortorella

Concern is mounting among federal Labor MPs that NDIS Minister Bill Shorten is losing control of a state-federal deal to create a separate system for people with less severe disabilities outside the $42bn National Disability Insurance Scheme.

While there is broad support across the ALP to make the NDIS more sustainable, MPs have told The Australian there is “growing concern” in caucus about the absence of costings and modelling in a deal struck with the states at December’s national cabinet meeting.

“The policy is good, but Bill Shorten hasn’t done the work to get a deal done with the states,” one federal Labor MP told The Australian.

“Shorten is rushing to get the headline but needs to focus on getting an outcome.”

Another Labor MP raised concern with how states such as NSW lost out during recent GST funding decisions and that it seemed unlikely the states would “provide an open cheque book” for non-NDIS participants that still needed supports.

“It’s very complex. Ultimately I think Bill (Shorten) can do it. But it certainly isn’t sorted out now,” the MP said.

The comments came after state premiers wrote to the government late Monday asking it to delay bringing on legislation to reflect the proposed changes to the disability system.

NSW Premier Chris Minns said the Albanese government had not made it clear how much the new arrangements, as proposed in the legislation, would cost his Treasury.

“Part of the frustration from state and territory leaders to the proposed reforms is that the federal government is not able to say how much NSW taxpayers will be on the hook for,” Mr Minns said.

“That’s not us walking away or saying that we don’t want to be part of the reforms, but it’s a common sense suggestion to say that we want to be around the table co-designing what the reform looks like.”

Victorian Labor Premier Jacinta Allen said the premiers had agreed to take the action because the draft bill “goes far beyond what was agreed at national cabinet.”

“We do not believe … that it reflects the agreement that was struck by first ministers at national cabinet last December,” Ms Allen said.

“(And) there has simply not been adequate consultation with state and territories as is required by federal legislation for any change to be brought about to the NDIS.”

Western Australian Premier Roger Cook said there was “no benefit to anyone in rushing” NDIS reforms.

“Western Australia is committed to working collaboratively with the commonwealth for the best possible outcomes for all people with disability but we are concerned the states will be left to carry more responsibility and more costs,” he said.

Despite the intervention the government made clear late on Tuesday that the disability legislation would be tabled in parliament on Wednesday.

Mr Shorten said improving the lives of people with disability should be the priority of all governments.

“At national cabinet in December the Prime Minister and premiers agreed to introduce legislation in the first half of 2024 to make sure every dollar in the NDIS gets through to the participants for whom the scheme was designed,” he said.

“We are not going to put change in the too hard basket because people with disability deserve better.”

A review of the NDIS delivered to the Albanese government in December laid out a pathway for reform to bring financial sustainability to the scheme. Since its creation a decade ago it has grown at a much quicker rate than originally envisaged, with more participants and higher costs.

Actuarial projections had it heading to $100bn a year within a decade. It currently has 640,000 participants and was on a path to one million without reform.

Key to the review’s reform agenda was to ensure only those with the most profound disabilities were covered by the scheme.

NDIS Minister Bill Shorten has pushed back against state and territory leaders’ bid to delay the commonwealth’s overhaul to the NDIS.

This was behind the recommendation to take support for less profound disabilities, including the growing cohort of children on the scheme with milder autism and developmental delay, outside the NDIS, with a new system of “foundational supports”.

The commonwealth agreed to cap an additional expenditure for states and territories on new foundational disability services to ensure the combined health and disability reforms will see all states and territories better off.

While there has yet to be a formal government response to the NDIS review, the states and federal governments agreed at national cabinet in December to pursue this new system of foundational supports.

It would be funded 50-50 under a complex deal that involved a broader boost in the GST distribution to states for health and disability support, worth up to $25bn across the next six years.

About $10bn over three years was understood to be committed to foundational supports, with the final detail about their ambit to be worked out later.

The Australian understands the premiers’ letter said consultation on the new disability legislation had been poor, and the new laws had the potential for unintended consequences.

It said the states need more time to consider how NDIS service delivery would interact with other services and the health system.

And it noted that state treasurers needed more time and greater consultation to determine the fiscal implications.

Queensland Treasurer Cameron Dick said negotiations had “not reached sufficient resolution to allow costs to be modelled”.

“Queensland is concerned that legislation may be premature at this time,” Mr Dick said.

Greens disability rights spokesman Jordan Steele-John blasted Labor for putting together the NDIS legislation “behind closed doors” and with advocates forced to sign nondisclosure agreements.

“Making advocates sign nondisclosure agreements is not genuine co-design,” Senator Steele-John said.

“The question on my mind is why has the Labor government prepared NDIS legislation behind closed doors? What have they got to hide?”

Additional reporting: Alexi Demetriadi