Labor’s budget relies on NDIS cuts. Growth in the scheme just blew out, again
Updated ,first published
Labor’s efforts to control the NDIS have gone backwards this year and growth is accelerating; Health Minister Mark Butler’s stock is rising as new laws that would save $38 billion in budgets over four years face fierce resistance from affected participants.
New data from the National Disability Insurance Corporation’s March quarter report published on Friday shows the annual NDIS growth rate jumped from 10.3 per cent to 11.3 per cent in three months as pressures continued on the $56 billion programme. 13,000 new participants were added last quarter.
The outbursts underline why Labor is seeking dramatic new powers to quickly curb runaway spending by allowing the minister to make sweeping cuts to funding or therapies across all parts of the NDIS.
The massive expansion of ministerial powers included in the bill Butler introduced to Parliament on Thursday pushes back on participants whose budgets could be cut even if they are assessed as needing higher levels of funding.
The Every Australian Counts campaign group, which led to the creation of the program 13 years ago, warned the laws would not deliver on the key promise that underpins the policy.
“When governments set up the NDIS, they promised disabled people and our families that we would get the reasonable and necessary support we need to live ordinary lives in safety and dignity,” said campaign group chairman George Talibanoros.
“This bill risks undermining that promise by allowing the minister to cut entire categories of NDIS funding, even if those cuts leave participants without adequate funding for reasonable and necessary supports.”
Butler said he would use his powers to cut social and community engagement budgets, which have tripled in four years to a total of $12 billion, and to reduce the average therapy allocation from about 72 hours a year to 68 hours.
The bill, which also includes stricter eligibility criteria and more rules to combat fraud, allows for an NDIS overhaul that will be vital in delivering the majority of the $64 billion in savings Labor made to improve its budget on Tuesday night.
Michael Brennan, chief executive of think tank e61, said it was the first time savings from a single program had dominated the budget so heavily. “Perhaps never before has a fiscal strategy relied so heavily on the successful implementation of a single budget measure,” he said.
The most recent example was former treasurer Joe Hockey’s budget, which sought to cut $80 billion in future health and education spending. But while changes to Hockey could be made with the stroke of a pen, Brennan said: “The way the NDIS records it is different.”
“It does not have the usual set-it-and-forget-it quality. The task of implementation will be constant and complex, with difficult decisions being made every day at the coalface. If current and future governments fail to achieve a full bailout, the fiscal outlook will deteriorate materially,” he said.
“The recent history of NDIS cost revisions is not encouraging. [It] It is one of actual expenditures that consistently exceeds estimates. “Governments have repeatedly predicted that the curve would flatten, only to find that actual spending continues on a steep upward trajectory.”
Even if the NDIS grows by 5 per cent above four-year forward forecasts, rather than the projected 2 per cent, Brennan said the deficit would be reduced by $6 billion by the end of the decade; This is the combined effect of Labour’s major changes to the taxation of trusts, estates and capital gains.
NDIS Minister Jenny McAllister said the $350 million blast in Friday’s quarterly report showed why changes in government were urgent. “[It] “It makes clear that the main obstacle we face when it comes to sustainability is the design of the programme,” he said.
Labor will need Coalition support as the Greens join disability advocates in the fight against the laws, which were sent to a Senate committee on Thursday that has a month to prepare a report.
While the government has promised to consult with the disability community, the speed and scale of the cuts have caused concern. Every Australian is running polls, supporting protests and encouraging people to email their MPs as part of a campaign against cuts.
President Talibanoros said people appreciate that the financial sustainability of the program is important, but “this cannot be a justification for reducing basic supports for people with disabilities.”
“The NDIS was created so that disabled people can live ordinary lives, leave home, participate in the community, work, study, build relationships and make choices on our supports,” he said.
“If passed, this bill risks changing reasonable and necessary supports from those that disabled people need to supports that only the government decides it can afford… Our lives and safety are at stake here. This bill needs proper consideration and cannot be rushed.”
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Natassia Chrysanthos is a Federal Political Correspondent. He has previously reported on immigration, health, social issues and the NDIS from Parliament House in Canberra.Connect with: X or email.
