Despite assurances, NDIS funding under threat

May 18, 2018

In delivering his third federal budget speech on May 8, federal Treasurer Scott Morrison claimed his government would guarantee the essential services Australians rely on. Presumably this included the National Disability Insurance Scheme (NDIS).

However, Morrison only mentioned the NDIS once in his half-hour budget speech, and that was 25 minutes in. He said, “every dollar and every cent committed to delivering the National Disability Insurance Scheme remains in place and always will,” before quickly moving on to "stopping the boats", "terrorism" and border security.

Funding for the NDIS became uncertain after the announcement on April 25 that due to a projected boost in the economy, the government was scrapping its proposal to raise the Medicare levy from 2% to 2.5% to cover a funding gap for the scheme.

With elections looming — a federal election could be called later this year, the Victorian election is in November and the NSW election is due in March — this was clearly intended to be a vote-winning budget. The lack of detail on NDIS shows the coalition does not think funding for disability services is a vote winner.

Coverage of the budget focused heavily on the seven-year plan for personal tax cuts, including cuts for the highest income earners, and a continuation of plans to slash business tax. Information about the budget’s impact on NDIS and other Social Security and Welfare (SSW) for people with disabilities was more difficult to find.

While the Budget Strategy and Outlook (Budget Paper No. 1) did provide more detail about support for people living with disabilities, this was largely unmentioned in the budget analysis.

Jade Williams, a legally blind university student and participant in the NDIS, told Green Left Weekly the scheme has provided support for her in transport, daily living, community involvement and assistive technology. “It makes me feel more confident in the fact that I have the money to do this stuff.”

But Williams has concerns about the future funding of the NDIS: “There are so many people with disabilities out there who really need this, so if there’s a gap, people are going to be missing out who really need it.”

According to the NDIS website, the scheme intends to provide customised support and greater choice for people with significant congenital or acquired disabilities, their families and carers. It is expected that once the NDIS reaches national coverage by 2020 it will cover approximately 460,000 participants.

The rollout of the NDIS has its issues. While waiting on a review — which can take up to three months — Williams’ parents have had to cover costs associated with looking after her guide dog, such as food. Once funding is approved by the review, Guide Dogs Australia will cover these costs.

Williams worries that people who don’t know what to ask for or don’t understand how the funding works will miss out or experience long waiting times. “You go into this planning meeting not really knowing what to do or what to say,” she explained.

According to the budget papers, assistance to people with disabilities and SSW payments will be a driver of growth over the next four years, with projections of expenditure to grow from $162 billion this year to $194 billion by 2022. This is largely attributed to the NDIS rollout, but also includes Commonwealth, state and territory contributions to the scheme, aged care services and childcare services.

The $83 billion allocated for the NDIS will be funded by $43 billion from the Commonwealth with the remainder to be contributed by states and territories. Federal funding will be made through the Disability Care Australia Fund (DCAF). Revenue from the previous Medicare levy rise in 2014 funds DCAF. The NDIS will be delivered by the National Disability Insurance Agency (NDIA).

Although the government has promised to fully fund its share, this leaves open the possibility that, if the budget estimates fail to deliver or there is a lack of funds from states, people will be left out or left short. Williams said she would feel ripped off if funding fell through and is frustrated at the government’s back-flip on commitments to the NDIS. “We were promised this and that and we’re not getting what they promised.”

Expenses for assistance to people with disabilities are forecast to grow by 26.9% from 2017–18 and 3.6% in real terms over the forward estimates (2018–22). NDIS expenditure is projected to rise to $23 billion by 2022.

The NDIS and income support for people with disabilities, mainly the Disability Support Pension (DSP), rank seventh and eighth respectively in terms of programs by expense. However, the budget expects the cost of income support to fall by 2.6%, attributed to restrictions on eligibility and more stringent assessments.

This could mean people like Williams, who receive both the DSP and the NDIS, may not get the support they need. Although Williams believes the NDIS is coming from the right place, she knows participants who have been underfunded. “To me, it looks like they’re looking for gaps, like loopholes, to not give funding to people.”

NDIS transition program expenses are expected to fall as the rollout progresses. The theory is that private sector expenditure will grow due to greater involvement in public sector work and as public demand for services increases. Revenue not gained from public taxation is expected to grow by 15.5% in 2018-19, because of NDIS contributions.

Assistance to the states for disability services is projected to decrease to zero by 2020–21 as Australia transfers from the previous system, the National Disability Specific Support Payment (ND SPP), to the NDIS. To cover costs, states and territories will make repayments to the Commonwealth as the ND SPP ceases, meaning expense double-counting upon payment and fund redirection.

Budget estimates expect income support for carers will grow steadily while disability and carers’ expenses will fall steadily. Estimates of national partnership programs for assistance to people with disabilities should rise this year before falling again until 2021–22. The government also plans to invest in information and communications technologies in the SSW sector through welfare payment infrastructure transformation for the Department of Human Services and the NDIA.

All NDIS coverage relating to the 2018 budget, limited as it is, has been relatively uncritical on assurances that the NDIS will be fully funded. However, this is an election budget and the promises of funding are based on forward estimates that would also require the Coalition government to be re-elected for another two terms to see their promises through.

With full NDIS coverage still at least two budgets away, the transition to the scheme must be fully funded even if the Coalition’s strategy does not deliver the balanced budget and robust growth they assure us is coming.

With the touted benefits to the economy and the necessity of this scheme to people with disabilities, carers, families, and the community, the Coalition must actively work to ensure it is fully funded, regardless of budget projections. As Williams said, “I feel like the NDIS is at the bottom of their list when it should be one of their priorities.”

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