The National Disability Insurance Scheme says so much that is wonderful about Australians. That we want all citizens to have equal opportunity to realise their life aspirations, including those with significant and permanent disabilities. But like all other taxpayer funded programs, it must be affordable and manageable.
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The first Albanese government's budget has re-confirmed that the NDIS is rapidly heading towards a financial cliff. The taxpayer funded scheme now has a total projected expenditure of $166.6 billion over the next four years alone. Given the scheme has blown out over the forward estimates by over $50 billion over the last three budgets, it is almost certain to keep exceeding forecasts.
The reasons for this financial trajectory are clear and by design. The 2013 NDIS legislation introduced by the Julia Gillard Labor government, ensured the Commonwealth government had no control over the key drivers of cost growth - in this case, participant numbers and cost per participant. Even Medicare, another demand driven scheme, is cost-controlled through MBS fees.
It is not too late for this world-first scheme's survival, but there are only two reforms that will save it. Both are urgent and challenging, but neither are impossible.
The first reform is to amend the 2013 NDIS legislation to provide the Commonwealth government with the levers to manage both cost drivers. The second is to renegotiate all Commonwealth NDIS intergovernmental agreements with states and territories.
The most pressing of the two is legislative reform.
As NDIS minister, it was clear the wider legislative reforms required to save the scheme were impossible without bipartisan support in the Senate to either remove state and territory rule change veto rights, or to support other legislative reforms, that work around this veto power.
Legislative reform to save the scheme would almost certainly now have bipartisan support in the Senate. Support the Labor Party, when in opposition, denied the previous Coalition government.
NDIS Minister Bill Shorten now finds himself trapped in a web of his own making - his 2013 NDIS Act, which requires any significant operational change to the scheme to have the unanimous support of states and territories - BEFORE it is introduced into the Commonwealth Parliament. Minister Shorten has further tightened this web around him, with two own-goals as the shadow minister.
The first own-goal was his relentless ridiculing of the Coalition government's NDIS budget and actuarial reports. A position that Minister Don Farrell was forced to admit in Senate estimates last week was based on Minister Shorten saying one thing in opposition, then discovering that "you find out things when you come into government that you didn't know prior to government".
The information supposedly recently revealed to Minister Shorten has in reality been clear and very public for years in budget papers, NDIS quarterly reports, annual financial sustainability reports and the Taylor-Fry report commissioned by all Australian disability ministers.
By denying any sustainability pressures, he was then able to score his second own-goal - the Labor promise to participants and their families that they would "stop the cuts" - because sustainability pressure was fake-news. While he never specified what cuts he was referring to, participants clearly understood he meant that their plans would never be varied downwards, as their life circumstances improved.
This was a promise he surely knew he should not, and could not, keep in government.
For the Labor Party, Minister Shorten got the pre-election politics right. However, post-election, he has put this world-first scheme at risk for the more than 550,000 NDIS participants and their families whose lives have been transformed by the scheme.
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After confidently declaring in April this year that, as minister, he would not require any additional funding for the NDIS, Minister Shorten has already had to seek an additional $8.8 billion. On its current trajectory, it is probable that in the next budget he will have to seek up to an additional $10 billion.
It is deeply disappointing for taxpayers that Labor has not proceeded with the Productivity Commission's next scheduled review of the scheme. Disappointing but not surprising, instead the Minister has commissioned yet another review. It appears to give himself another 12 to 24 months to flip his narrative on the scheme and slowly untangle himself from his web. On his current timeline, urgent scheme reforms would not start until well into 2024 - time the scheme does not have.
This review, like the 30 before it, will find there are ways to keep improving the scheme for participants, staff, carers and providers. It will also report on the progress of the many reforms implemented by the Coalition government to do just that - the participant service guarantee, participant safety, IT reforms and anti-fraud measures, just to name a few.
There is no doubt the review will also find the legislation must be amended and that the funding agreements in the intergovernmental agreements must be renegotiated.
There are signs Labor has started to untangle their web. In estimates, Labor finally admitted the truth about the sustainability of the scheme. The minister has started to talk about scheme "moderation" and now agrees with "strategic cuts" but not "blunt force cuts". Both are novel policy terms he will undoubtably explain, at some point. The minister has also opened the door to moderating participant plan costs through redefining the scheme's legislated reasonable and necessary test.
The problems and solutions are already crystal clear. For the survival of the NDIS, the Labor government must not delay urgent reforms. It is not too late, but the clock is ticking and Labor must start governing.
- Senator Linda Reynolds was Minister for the NDIS under the Coalition government.
