Federal government budget savings at risk as Senate inquiry stalls
The federal government’s plans to put billions of dollars into National Disability Insurance Scheme savings have been thrown into doubt as a second delay of a parliamentary report revealed growing political resistance to reforms Labor says are needed to rein in rising costs.
A Senate inquiry examining the revision of Labour’s proposed $56 billion plan was postponed for a second time on Friday amid fresh criticism from the Greens, raising the prospect of further negotiations on legislation the government wants to pass before the winter parliamentary recess.
Any delay in reforms could have a significant cost to the budget; Treasury forecasts suggest a one-year pause would wipe out the savings of around $17 billion expected in four-year forward forecasts.
The government is relying on reforms to slow NDIS spending growth, arguing the course of the scheme is unsustainable. The proposed changes are expected to take at least 240,000 people off the program in coming years, shifting many to yet-to-be-established “essential supports” funded by other services.
The delay has intensified scrutiny over the government’s timetable and raised concerns among disability advocates, state governments and senators that reforms are being rushed.
Greens senator Jordan Steele-John criticized the delay in publishing the report after the government set an 11-day deadline for disability organizations to consult through a parliamentary inquiry.
“The government has demanded that disabled people, their families and advocates hurry to prepare submissions and evidence for the inquiry, but is now dragging its feet on publishing the findings,” he said. “People with disabilities deserve certainty, transparency and respect.”
The Greens are preparing an opposition position that will likely call for the law to be withdrawn entirely; argues that no participants should be removed from the program until replacement supports have been fully implemented, independently evaluated, and proven effective.
The party also wants greater Senate scrutiny of the bill, stronger protection against funding caps, automatic decision-making and expanded ministerial powers.
The intervention presents another hurdle for Labor as it seeks to lock in savings that are central to its long-term budget strategy. Opposition NDIS spokeswoman Melissa McIntosh has yet to confirm the Coalition’s support, leaving Labor without the numbers to get it through the Senate.
Health Minister Mark Butler has argued the reforms are needed to preserve the scheme for future generations and has previously said the legislation is on track to pass parliament in early July.
He told a news conference in Adelaide on Friday that discussions with state and territory governments had been constructive despite concerns about the proposed revision.
“We are working constructively with states,” Butler said. “This doesn’t mean that sometimes there isn’t the slightest friction in the relationship.
“I agree that this is a very important set of reforms for the disability community. Obviously we are going to face major change,” he said.
Disability groups say evidence presented during the investigation reveals major flaws in the proposal.
Disabled People Australia chief executive Jarrod Sandell-Hay said participants remained deeply concerned about the potential consequences of the changes. He said the organization is willing to work with the government to make sure this is done properly.
McIntosh accused both Labor and the Greens of playing politics over the plan and said the Coalition was prepared to support a six-month inquiry to ensure any reforms were well targeted.
“We heard devastating stories from severely disabled participants in the study where they said they were afraid people were going to die, and that’s certainly not a message I’m going to turn a deaf ear to,” he told the ABC.
“This particular bill does nothing to fight fraud and corruption…it seems the government is going after participants first and foremost, but not cleaning up the system.”
While the NDIS Senate report was delayed, a Labor-dominated committee which held a rapid-fire inquiry into the government’s tax changes on Friday afternoon recommended that the Senate pass the controversial bill.
The report paves the way for the government to try to pass bills in the next two weeks.
“The committee finds that current CGT and NG regulations disproportionately benefit high-income Australians, distort investment in existing housing and contribute to reduced housing affordability and increased intergenerational inequality,” the report says.
“The committee found that the measures included in the bills represent a balanced package of reforms that improve the fairness and sustainability of the tax system while supporting housing supply and reducing tax burdens on working Australians.”
Coalition members published a dissenting report stating that the laws were an unfulfilled promise and had not been subject to adequate scrutiny; but the Greens argued that the grandfathering provisions for negative shifting were too generous.
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Rob Harris is a national correspondent for The Sydney Morning Herald and The Age, based in Canberra. He is a former European correspondent.Connect via email.
