Labor cuts $14 billion from NDIS, with more to come

June 4, 2024
The NDIS received a substantial kick in the federal Budget, as cuts were announced. Graphic: Green Left

The disability political football (otherwise known as the National Disability Insurance Scheme — NDIS) received a substantial kick in the May 14 federal budget.

True to its core neoliberal values, Labor foreshadowed cuts of $14 billion over five years.

NDIS minister Bill Shorten claimed that 95% of the $14 billion “savings” would come from reducing “intraplan inflation” (where participants’ plan is automatically topped up if exhausted) and by changing the way a participant’s supports are assessed — from “reasonable and necessary support” to “reasonable and necessary budgets”.

Labor is wasting no time in ensuring its framework for cutting NDIS is enshrined in law.

The National Disability Insurance Scheme Amendment (Getting the NDIS Back on Track No. 1) Bill was introduced to Parliament on March 27. Its purpose is to begin the wind back of NDIS.

“The NDIS was designed to help the people with the most complex support needs, but it was never designed to be the total scheme for all Australians with disability,” Shorten claimed in his Second Reading speech supporting his bill.

“We now need to finish the job of building a more inclusive Australia,” he said. But he plans to do this by significantly reducing supports provided by the NDIS and forcing state and territory governments to pick up the pieces.

What’s in Bill’s bill?

“The bill which I present will enable new and expanded rule — and instrument-making powers,” Shorten said. “The legislative approach taken is that we seek to establish an enabling architecture for rules and future reforms to restore the original intent, integrity, consistency and transparency of the scheme.”

Unfortunately for people with disability and their supporters, Shorten’s bill is rather short on detail.

Central to the government’s argument that it can save $14 billion from the cost of NDIS, while still delivering “reasonable and necessary” supports to people with disability, is its plan for “reasonable and necessary budgets” for NDIS participants.

This change was recommended by the NDIS Review in its final report, delivered in December, and would lead to NDIS deciding “the whole budget for participants, not line by line decision-making”.

However, it is still unclear how NDIS will determine what a “reasonable and necessary budget” will be.

“Consistent with recommendations of the NDIS Review, a participant’s reasonable and necessary budget will be based on a wholistic assessment of their support needs,” states the NDIS Amendment Bill — question and answers.

But exactly what form this “holistic assessment” will take is yet to be revealed.

“This needs assessment has not been further fleshed out in the legislation,” said The Saturday Paper on June 1. “There is no explanation for how it will be conducted, whether the participant will even be involved or whether they can see it.”

It may even be that a participant’s budget is simply determined by using the “category of disability” assigned to participants when they join NDIS and using a formula to generate a budget.

Similarly, Section 10 of the bill seeks to define an NDIS support. But rather than clearly laying out exactly what services participants may use their NDIS budgets to fund, the bill muddies the waters by stating that: “A support is an NDIS support for a person who is a participant or prospective participant if: …

“(b) the support is declared by the National Disability Insurance Scheme rules made for the purposes of this paragraph to be a support that is appropriately funded or Provided through the National Disability Insurance Scheme…”

The lack of clarity about what constitutes an NDIS Support is likely to leave participants liable to pay back the money, should it be decided that they have spent their money on a support that is not to be funded through the NDIS.

“Even if a NDIS participant has received support funding and paid for a service, the agency can decide it was not an appropriate support and collect the debt from the participant, even though they no longer have the money,” according to The Saturday Paper.

States and territories unhappy

In a submission lodged during the exhibition of the NDIS Amendment Bill in May, the Council for the Australian Federation (CAF represents all state and territory governments) called on federal Labor to delay the law.

“The swiftness with which the Commonwealth is pursuing changes to constrain the NDIS, without the defined and designed broader ecosystem, and the limited consultation with disability stakeholders and State and Territory governments, risks a fragmented and disconnected service system that fails to address the needs of the most vulnerable members of our community,” the submission said.

“If we don’t do this carefully … people with disability will end up in our hospitals and other settings that are unsuitable for their needs.”

Providing supports for people with disability, however minimal, is expensive.

State and territory governments fear that behind the NDIS Bill is an attempt at cost shifting and state and territory budgets will be the worse.

This would particularly apply if “Foundational Supports”, envisaged by the NDIS Review as a service for people with disability who aren’t considered disabled enough to qualify for the NDIS, is not ready to be implemented first.

“The amendments are complex, and will alter the operation of the NDIS before broader improvements are made to the disability ecosystem, including Foundational Supports, creating a risk of emerging service gaps for people disability,” the CAF submission said.

“Reforms to the NDIS may have a significant impact on mainstream services, such as hospitals, schools and community service organisations.”

Motivated by concerns that the proposed changes will increase the financial burden on state and territory health and education services, CAF argues that restrictions on NDIS funding (section 10 of the NDIS Bill) should be delayed until Foundational Supports are agreed and phased in.

CAF also argues that the bill “significantly increases the Commonwealth’s power” in making decisions about the operation of NDIS.

“The NDIS is a shared Scheme, which is co-funded and co-governed by all Australian governments. States and territories remain strongly committed to maintaining their roles as co-governors and co-funders of the NDIS.”

CAF’s solution is to increase the power of the states and territories, by insisting that proposed changes to NDIS rules are first agreed by them.

Ultimately, the debate between federal, state and territory governments regarding the future NDIS funding is an argument among thieves.

All are committed to neoliberal principles which: demand limits on government spending; reduce support for people with disability, institute copayments where possible; and cuts to make programs more “sustainable”.

NDIS is a frustrating, insufficient and universally indifferent support system for people with disability.

It has failed to fully deliver on its promise to provide “choice and control” for people disability over their lives.

Nevertheless, it is the only measure which does provide the disability community with an opportunity and must be defended and extended.

Labor’s plan to curtail and restrict NDIS must therefore be resisted.

[Graham Matthews is a disability advocate and a member of the Socialist Alliance.]

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