Plans for a National Disability Insurance Scheme (NDIS) are a centrepiece of the Gillard government’s efforts to re-badge Labor as committed to public services. The aims of the scheme are very welcome—but the key question is how it will be funded.
Julia Gillard told an NDIS rally in Sydney in May that, “An NDIS will give all Australians with a significant disability the peace of mind to know that their care and support needs will be addressed, no matter where they live or how they acquired their disability.”
The scheme aims to do something that is long overdue: end the lottery where people with disabilities get different levels of support depending on where they live and how they acquired a disability, whether through a car accident, workplace accident, at home or at birth.
The Federal Government announced spending of $1 billion over four years in this year’s budget for a series of trial sites covering 10,000 people to test the scheme. Disgracefully, the Liberal state premiers initially refused to put in money to fund a trial.
After a few days of public outrage, however, Victorian Premier Ted Baillieu and NSW Premier Barry O’Farrell reluctantly agreed to contribute $42 million and $35 million respectively to secure trials for their state.
True to form, Queensland Premier Campbell Newman refused. Newman is more focused on cutting disability services, axing a $6.50 bonus to taxi drivers to compensate for the extra time it takes to pick up disabled people.
Crucially, one of the starting points of the Productivity Commission report that outlined plans for the NDIS is that, “much more funding would be required to meet the current demand for services”.
The report estimates funding for disability care needs to roughly double. The cost of the NDIS would be an additional $6.5 billion a year when fully implemented, on top of current levels of $7.1 billion of funding for disability care.
“So how will the disability scheme be paid for?” asked Ross Gittins in the Fairfax press. “No one has any idea.”
The Liberals clearly don’t want to pay for it. Although Tony Abbott has pledged his support, his Treasury spokesperson Joe Hockey refused to commit to funding it, saying, “I’m not going to raise expectations and then not deliver”.
But Julia Gillard has not outlined how she would find the money either. Her only concrete commitment so far has been to rule out a new tax to pay for it.
The money can easily be found: restoring the mining tax to it original level would raise billions. Special corporate tax write-offs cost the government $5.4 billion in 2010-11. And the corporate tax rate has been slashed from 40 per cent down to 30 per cent since the 1980s. But Gillard and Swan say they want to cut it further.
Labor’s obsession with its budget surplus also restricts how they can find the money to boost funding for services. All this means that finding another $7 billion a year will likely mean cuts to other public services.
The NDIS model
Following an assessment to determine their needs, the scheme is designed to offer support to anyone with a permanent disability, defined as, “significantly reduced functioning in self-care, communication, mobility or self-management and require significant ongoing support.”
It would also provide early intervention support to people where there was a good chance this would make a difference to their lives. For example, early intervention can make a big difference to people with degenerative diseases like multiple sclerosis. It is estimated the NDIS would assist 410,000 people.
Individuals would be entitled to receive a range of supports and would be able to choose the service providers they wanted to deliver these. Some have criticised the NDIS as a neo-liberal “vouchers system”, but it is actually more like Medicare. There is no dollar amount of funding, simply an entitlement to access services.
However the Productivity Commission report, on which plans for the NDIS are based, makes it clear that people will also be able to cash out their entitlements to be spent on other services agreed to by the NDIS.
This could introduce a market mechanism into disability services, running the risk that profitable areas could be cherry picked by the private sector. The government needs to make sure that there is no shift away from existing publicly funded disability services or pensions.
Some neo-liberal economists have suggested that the scheme could pay for itself by pushing more people back into the workforce.
The boost in disability spending is well overdue. The challenge will be to make sure the government funds it and implements services to meets the needs of all those with disabilities.
