New bill first critical step on road to NDIS 2.0

Fixing the NDIS needs to start now, Bill Shorten says. His new bill puts an important stake in the ground, but will the states be the spoiler?

The Albanese government has introduced a new NDIS bill into parliament.

The new NDIS bill is a critical first step toward a revamped scheme to provide the nation’s most profoundly disabled with the “reasonable and necessary” support they need to live their best lives while also ensuring taxpayers get value for money.

But more work is needed to bring the states back to a deal they struck with the Albanese government in December to finance so-called “foundational supports” outside the NDIS for the millions of Australians with less severe disabilities. It is a vital piece in NDIS 2.0.

For many of its 660,000 participants and their families, the scheme has been transformational.

But as the NDIS review concluded in December, and as the scheme’s minister Bill Shorten acknowledged in introducing the draft bill on Wednesday, it has strayed from its original vision.

Participant numbers have risen, especially young children with a diagnosis of autism and developmental delay. Plan costs are growing faster than expected. And navigating the system has been traumatising for many.

In the last few years NDIS costs have soared by 16 per cent annually, hitting $42bn this year. Without intervention it was on course for a million participants and $100m cost by 2032.

Why? Because since the NDIS’s introduction a decade ago other disability services simply withered away. It became “the only lifeboat in the ocean” and families were forced into a mad scramble to get on.

National cabinet stepped in last April to set a scheme cost growth target of 8 per cent by 2026, and the new bill is designed in part to help meet that number.

There will be some immediate system changes if the bill passes, such as the National Disability Insurance Agency having broader powers to ensure compliance and pursue fraud.

Longer term, it sets out new architecture for handling NDIS plans, based on a needs assessment and not on a diagnosis. It will also clarify what supports can and can’t be funded.

These structural changes won’t happen quickly, and will be “co-designed” with the disability community over the next 18 months, with existing arrangements remaining in place until then.

The full NDIS 2.0 is not anticipated to be operational for five years.

NDIS minister Bill Shorten.

Key to the new regime, and slowing cost growth, is building a new system of “foundational supports” outside the scheme in mainstream settings like schools and childcare.

National cabinet in December agreed to finance these supports 50-50 between the commonwealth and the states as part of a broader deal that will see the states receive $25bn over the next seven years in GST top ups for more health and hospital funding.

The states are now baulking, claiming the new legislation goes further than the national cabinet agreement and costings around what they might be up for are unclear.

But it’s hard to see what has changed since December. The scope of foundational supports was in the NDIS review, and future consideration agreed.

Shorten is a seasoned negotiator. He has seen state brinkmanship on this issue before, as recently as December. He will be working with social services minister Amanda Rishworth, responsible for disability services outside the NDIS.

On Wednesday Shorten held out an olive branch, saying he acknowledged the states’ concerns and will “work to resolve issues and allay fears” at the same time as starting the reform process.

There is a long way to go on NDIS and disability reform. Let’s hope it can quickly rise above the political fray.