The National Disability Insurance Scheme (NDIS) reform bill, now before parliament is the centrepiece of the federal government’s budget savings measures.
It’s the biggest reform the 13-year-old NDIS has faced and aims to ensure the scheme’s sustainability by bringing long-term funding growth down to 5–6% a year.
While a Senate committee inquiry completes its deliberations, the Greens and the cross-benchers are tinkering around the edges of the bill. They’re proposing minor amendments and small carve-outs from the harshest measures.
But they should be aiming higher.
The current bill includes short-term measures that are deeply concerning: a 50% cut to every NDIS participant’s social and community participation supports budget, and a 10% cut to every capacity-building daily activities budget.
These measures should be removed from the bill. These cuts will cause unnecessary harm to disabled Australians and, as our analysis shows, they’re unnecessary. The government can meet its objective of making the NDIS sustainable without them.
What’s been proposed?
An NDIS reform bill needs to pass to ensure the government can get on with necessary structural repairs to the scheme.
The bill includes:
- fixing flaws in the scheme’s design
- increasing consistency in assessing people’s eligibility and setting their budgets
- moving away from over-reliance on markets
- improving governance of the multi-billion-dollar program.
The bulk of the current bill relates to measures that will enable this repair.
What’s proposed for social and community participation budgets?
The government has also targeted social and community participation costs because they have grown faster than the scheme average. But they’re not the fastest-growing support category.
The “support determinations” section of the bill would be used to cut every NDIS participant’s social and community participation supports budget by 50%, and every capacity-building daily activities budget by 10%.
These cuts would be expected to stick: spending in these categories would be lower than it would otherwise be for years to come.
Social and community participation budgets support people to engage in everyday social, recreational, civic and community life and are central to the program’s purpose.
This might include travel training for an intellectually disabled person to build their independence in catching public transport to TAFE, sport or social activities. Or it might mean a support worker accompanying someone to attend a cultural celebration or community group.
What would cuts mean for participants?
These cuts will increase people’s social isolation and place additional burden on families and informal carers, mostly women, who would have to pick up the slack.
These cuts would also strip the most support from the most vulnerable people in the NDIS.
People in supported independent living or specialist disability accommodation, for example, have on average social and community participation budgets more than five times as high as other people in the NDIS. As such, they would lose five times as much support.
These cuts aren’t necessary to meet the government’s target
The government wants to bring NDIS cost growth down to 5–6% a year, from 11.3% in the 12 months to March 2026.
This is a reasonable ambition, and would be similar to growth in other social programs, such as Medicare and aged care.
But this target would be achieved with or without the proposed short-term cuts.
While the short-term cuts would deliver more than a third of the package’s A$37.8 billion savings over the four years to 2029–30, they would do nothing to dampen the long-term growth rate of the NDIS.
A one-off fall in costs
The government’s proposed short-term cuts would have an almost immediate effect on scheme costs, reaching their full impact of about A$4 billion a year by 2028–29.
But after 2028-29, savings from the short-term cuts would plateau. They would increase by only 5% in 2029-30, while savings from the structural reforms would increase by about 60%.
These growth patterns mean the short-term cuts would contribute a shrinking proportion of total savings from the reform package, down from 50% in 2026–27 to 26% in 2029–30.
This plateauing of savings means the impact of the short-term cuts would be a step fall in annual scheme costs, rather than a dampening of the rate of long-term growth.
Sustainability can be achieved without the short-term cuts
According to our calculations, over the next four years (the forward estimates), the full package of proposed reforms would drag NDIS cost growth down to 1.1% a year, a cut in real terms.
Without the short-term cuts, cost growth would be 3% a year. That would still be a real cut in population-adjusted terms, and is well below the government’s target long-term NDIS growth rate of 5–6% a year.
The government has not made the case for the necessity for such deep and blunt cuts in the short term.
In the period after 2029–30, NDIS cost growth under the full package of reforms would be about 5%, from a base cost of $56.2 billion in 2029–30.
Were the bill to be passed with the short-term cuts removed, cost growth would still be about 5%, but from a $4.3 billion higher base cost of $60.5 billion in 2029–30.
Bottom line
Cuts to social and community participation budgets achieve no policy goal, and do nothing to make the NDIS sustainable, while hurting people who rely on these supports to participate in their communities.
The government’s insistence on making these cuts is about shoring up the budget bottom line – but at the expense of some of the most vulnerable Australians. A similarly blunt approach to Medicare or hospital funding would be unthinkable.
Passing the bill with these cuts included would hit the short-term savings target but entirely miss the point.
Sam Bennett, Disability Program Director, Grattan Institute and Owain Emslie, Senior Associate, Disability Program, Grattan Institute
This article is republished from The Conversation under a Creative Commons license. Read the original article.
