NDIS architect John Walsh warns funding scheme could take annual cost to $50bn

Fully funding all NDIS participants would cost more than twice the current budgeted $21bn, warns the scheme’s architect.

John Walsh Walsh warns that if the costs of the NDIS become prohibitive, there was the real danger the government may wind it up

Fully funding all NDIS participants would cost taxpayers $50bn a year, more than twice the current budgeted $21bn, yet successive governments had allowed eligible people with disability to expect full coverage, an architect of the scheme has warned.

In a scathing assessment of the National Disability Insurance Scheme, John Walsh, an NDIS board member from 2013-2020 and an associate commissioner of the Productivity Commission report that set out the case for it in 2011, said the scheme was no longer trusted, had lost momentum and was creating winners and losers in the chase for disability funding.

Mr Walsh’s submission to a parliamentary inquiry into the NDIS backed the introduction of a controversial new independent assessment process to determine “reasonable and necessary” NDIS funding for its 430,000 participants, saying without it the scheme would become unsustainable.

“We know from extensive modelling that the total cost of meeting all support needs of all people with disability in Australia aged less than 65 is far higher than the funding envelope of the NDIS – probably by a factor of around 250 per cent, or in round numbers a $50bn scheme rather than $20bn,” Mr Walsh writes.

“Full flexibility in the scheme at present is likely to be unaffordable, because of the previous approval of an unsustainable level of committed support.

“Persisting with a methodology which allows debate around the ‘reasonable and necessary’ nature of each individual support … invites a world of very significant cost escalation, and inevitable scheme crisis at some point.”

Mr Walsh warned that if the costs of the scheme became prohibitive, there was the real danger the government may wind it up, which would be disastrous for people with disabilities and leave them with little control over their supports.

The ongoing sustainability of the NDIS has become a hot political issue for the Morrison government, with disability advocates warning the push to introduce a new method of assessing whether people qualified for the scheme, and how much support they are entitled to, was really a move to cut costs by stealth.

Advocates fear the new assessments, which would be conducted by a government-contracted health professional instead of being based on reports from the applicant’s own health team, and would take around three hours to complete, won’t capture the full picture of the needs of a person with disability.

But taxpayers will be concerned that the cost of NDIS has blown out by 23 per cent annually over the past two years.

The NDIS is currently funded about half and half by the commonwealth and the states but, under an agreement, the state and territory contributions are capped at a 4 per cent annual increase.

And the scheme is continuing to expand, with the eligible participant numbers expected to grow from 430,000 to 530,000 by June 2023.

The independent assessment plan was set to be brought into law by the previous NDIS minister, Stuart Robert, but after a reshuffle in March new minister Linda Reynolds said she would put the proposed legislation on pause until the results of a current trial of the system had been analysed and she had conducted a national consultation.

Bruce Bonyhady, a long-time disability advocate who was also instrumental in the development of the NDIS, told the federal parliament’s Joint Standing Committee on the NDIS on Friday that independent assessments were causing distress among people with disability and undermining the intent of the scheme, and he said the trial should be abandoned.

“I believe we’re going down this path because the government and the agency are concerned about the scheme’s sustainability,” Mr Bonyhady said.

“So the real driver of all of this is cost-cutting.”

Mr Walsh said the NDIS had wider problems, stemming from successive governments failing to follow through with an agreed national disability strategy that included ensuring equal rights and opportunities in health, education, justice, housing and other mainstream services through community support programs. “We have embedded a total reliance on individual funding within (the NDIS) as an ‘all or nothing’ solution to Australian disability support, funding and service access,” he writes. “Under the current system the size of those support packages can be heavily influenced by the ‘level of advocacy’ of participants and their representatives.’’