Shorten to seek new laws to stop NDIS price gouging

Bill Shorten wants to stop providers charging multiple times the market value of a product simply because it is being paid for by the NDIS.

NDIS Minister Bill Shorten is pushing for new laws to stop disability providers from price gouging. Picture: Lyndon Mechielsen

The Albanese government is moving to create specific new laws to stop disability providers charging exorbitant prices simply because they are purchased through the National Disability Insurance Scheme.

NDIS minister Bill Shorten said he was concerned the “unconscionable conduct” provisions in Australia’s competition law was failing to stop so-called “twin pricing”, where goods and services purchased through the NDIS are costing multiples of their market price.

Mr Shorten told a disability conference on Friday that pursuing a provider under the existing legislation was difficult and costly, and a better way had to be found to prohibit blatant overcharging, which he said “‘burns up” support for individual NDIS participants and rips off the taxpayer.

He met this week with the Australian Competition and Consumer Commission, along with competition minister Andrew Leigh and sought advice on “specific, for purpose regulation” to “make this twin pricing nonsense illegal.”

“I think it should be illegal,” Mr Shorten said. “I’ve seen ads (for an aluminium shower chair) where it‘s $150 if you buy it from wherever. But I’ve seen the exact same chair advertised and you put the words NDIS shower chair and you get to pay $600 for it.

“That’s just wrong, it’s immoral, it‘s profiteering,” he said. “There should be no business model in Australia which makes its profits by discriminating against people with a disability.”

The Australian has previously reported cases where a folding walking stick that costs between $30 and $40 on the open market was priced at as much as $457 when described as an “NDIS approved walking stick” – a mark-up of more than 1200 per cent.

Similarly, a wheelchair valued at between $390 and $410 on the open market was listed at almost $1800 for the NDIS.

Mr Shorten told the conference the twin pricing problem was part of the reason behind “spiralling expenses” in the NDIS, currently costing around $35bn a year, which he acknowledged were a concern.

He flagged a “reboot” of the NDIS in April, admitting it had “lost its way” and needed to refocus on better outcomes for its 600,000 participants and delivering value for the taxpayer.

Ahead of last month’s budget, national cabinet announced the NDIS would be subject to an 8 per cent cost growth target from 2026, a large step down from the trajectory forecast in the October budget of 13.8 per cent over the next decade.

Under a state-federal agreement the cost of the NDIS is shared, with the commonwealth currently responsible for about 66 per cent of the cost, heading to more than 80 per cent within a decade.

Mr Shorten allayed sector fears the government was imposing a price cap on the NDIS, saying it was a target, and the scheme would remain demand driven.

“We need to ensure the NDIS is sustainable,” he said.

The minister pointed to a new package of measures outlined in the budget, “the best part of $900m”, that is being spent on building capacity in the system to improve it for participants and drive efficiencies.

The government is looking to that package of measures to save about $73bn over the next decade, including more than $15bn in the next four years.