States wash hands of NDIS blowout
States have warned the federal government it must bear 100 per cent of the risk of any NDIS cost blowout.
States have warned the federal government it must bear all the risk of any National Disability Insurance Scheme cost blowout and will not accede to any demands to pay more money or even return control of the program unless their own budgets are assured.
The states have made their positions clear in final submissions to the Productivity Commission review of NDIS costs, saying no case had been made that states were cost-shifting on to the scheme, but that they were witnessing budget stress because of buck-passing from the $22 billion project on to mainstream services.
Queensland’s Labor government went so far as to say the federal government should bear all of the funding blowout risk because it had “powers to raise revenue efficiently, as seen by the increase to the Medicare levy”.
That same levy is at risk of becoming blocked in the Senate because federal Labor leader Bill Shorten opposes it, despite having embraced it when Julia Gillard was prime minister.
The key issue is that state governments signed deals under Ms Gillard’s watch that staked their ongoing funding commitments at an annual growth rate of 3.5 per cent after the scheme reaches full rollout in 2019-20, despite scheme costs that will grow at a much faster rate.
The federal government is responsible for 100 per cent of these ongoing costs, except in Western Australia if a state-run parallel scheme goes ahead.
In its submission, the Northern Territory appears to back a push by federal Social Services Minister Christian Porter to give the federal government more control over parts of the scheme that would contribute to cost blowouts but quickly says this could not be done in a way that would protect the NT budget.
“Governance arrangements should be adjusted to allow the commonwealth to manage a greater proportion of the risk of the cost overruns in line with their greater responsibility for funding these overruns,” it says.
“However, this arrangement would only be acceptable provided it did not put more pressure on Territory mainstream service funding now or in the future, which would be unlikely.”
The submission says the federal government would need to guarantee any changes “are not to the financial detriment of jurisdictions”.
All states said they are already witnessing rising costs in services not covered by the NDIS, such as health and education, with Victoria arguing it is “funding a number of supports that the state would otherwise consider the responsibility of the NDIS when they are linked to functional need”.
“Such supports include some maintenance therapies, equipment, food supplements and dietetics for the Home Enteral Nutrition Program, meal assistance, continence nursing, community nursing, wound management, tracheostomy care and ventilator support,” the Victorian symission says.
To this list, Queensland added catheter care and insulin medication.
The NDIS, however, was explicitly designed so that it would not replace health, education and other costs related to systems outside disability care.
Liberal-run Tasmania is in lock-step with its Labor stablemates and questioned whether the commission ought to even be looking at the issue of how much states contribute to the scheme.
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout