First job for Christian Porter: fill $5bn hole in NDIS

The first order of business for new the Social Services Minister was to order a special fund to safeguard the disability scheme.

The first decision by Social Ser­vices Minister Christian Porter on his first day in the job was that a special account had to be ­created to meet a $5 billion funding shortfall for the National Disability Insurance Scheme.

“The Coalition is fully committed to properly, adequately and sustainably funding the NDIS,” Mr Porter told The Weekend Australian.

“Unfortunately, Labor left a $5bn gap in NDIS funding — that’s $5bn each year. We will have to find $5bn of additional funding to fully fund our absolute commitment to the full rollout of the NDIS and to protect it for future generations.

“Savings that Labor claims it made to help fund the NDIS went into consolidated revenue and were never set aside to fund the NDIS. They were washed away by Labor’s budget deficits.”

However, opposition finance spokesman Tony Burke said Labor in office had outlined a “credible plan” to fund the NDIS.

“Any claim by the government the NDIS was not fully budgeted for by Labor is false and deliberately undermines the future of the scheme,” he said. “It would be the height of irresponsibility for there to be a claim that savings measures budgeted to pay for the NDIS should be ­ignored.”

The cost of the NDIS, projected at $22bn by 2019-20, is split almost equally between Canberra and the states.

Advice to the Turnbull government is that its share of funding in 2019-20 will be $11.3bn, to come from three sources: existing federal funding ($1.1bn); Medicare levy ($3.3bn); and redirection of state funding for existing disability services ($1.9bn). This totals $6.3bn, leaving an annual shortfall of $5bn.

Mr Porter has introduced legislation to create the NDIS Saving Fund Special Account. Given the size of the shortfall, he sees this as an essential step to guarantee full funding with a far more comprehensive and guaranteed mechanism than Labor proposed. The purpose is to ­ensure NDIS funding is identified separately from the budget repair task.

The special account, in parallel with the Gillard Medicare levy account, will receive savings from across the budget. There will be an early contribution to the account in the May budget.