THE NDIS AT 10

The National Insurance Scheme was set up by the Gillard Labor government and is Australia’s first national scheme for people with disability. It provides funding directly to individuals. The NDIS also connects anyone with disability to services in their community. Like all new schemes, the settling in process over ten years has thrown up some challenges. With Labor back in government after the 2022 federal election, the new minister for the administration of the NDIA, The Hon Bill Shorten, has taken the reins with reform in mind. To discuss some of the ways the NDIS can be made stronger and more cost effective, Bill Shorten spoke for The Sydney Institute on Wednesday 1 February 2023.

THE NDIS AT 10

BILL SHORTEN

Thank you, Gerard, and members of the Sydney Institute for the invitation to address you tonight. I start by acknowledging that we are on the land of the Gadigal people and I pay my respects to their elders, past and present. And I extend that respect to any Aboriginal or Torres Strait Islander people present.

This year marks the tenth anniversary of the National Disability Insurance Scheme. You’d be hard pressed to find a person in Australia who doesn’t support the NDIS. Because to say you don’t support it is to say you don’t believe people with permanent and severe functional disabilities have the right to live an ordinary life.

That is all they ask for. An ordinary life.

Just to have the services and equipment that allow them a dignified existence; some independence; the ability to work or be with friends; the choice to live independently.

The Australian community deserves some commendation for the existence of the NDIS. It’s their generosity that supports it. They quite rightly have high expectations of stewardship of the scheme, and no tolerance for exploitation of a system designed to enable.

Big picture

I think it is worth revisiting, not just the path to the NDIS, but the history of social security in modern society. My clever colleague Dr Daniel Mulino MP has written a thoughtful book called The Safety Net: The Future of Welfare in Australia. In the book, Daniel takes a look back at Bismarckian Germany in the 1880s, where the Chancellor made that country the first to adopt an old-age social insurance program – which included disability support.

While Otto von Bismarck called it “practical Christianity”, some might say it is one of the first instances of wedge politics because he was trying to banish the Socialists to political obscurity by cutting their lunch. Few would have thought of Bismarck as a “woke” leftie, certainly not the Chancellor himself, but he managed to “out-socialist” the Socialists.

Some 50 years later, Franklin Delano Roosevelt, himself paralysed from the waist down and wheelchair-bound, ran for US President with “The New Deal for the Forgotten Man”. An important element of that 1933 platform was a major federal initiative to help Americans with physical and mental disabilities. It included specialised facilities and services; education, training and work opportunities; art and music instruction; and the legal and ethical foundation for federal disability insurance and the Supplemental Security Income program.

In 1956, after two Democrat presidents progressed the policy, Republican Dwight D Eisenhower – with overwhelming bipartisan backing – signed legislation to include disability support in the Social Security Act.

So big reform is not the sole domain of either side of politics. We know that from the Australian experience. Ben Chifley gave us the Snowy-Hydro Authority and the Pharmaceutical Benefits Scheme. Robert Menzies oversaw mass migration from war-torn Europe. Gough Whitlam opened the door to China and instituted free tertiary education. Malcolm Fraser welcomed the Vietnamese boat people. Bob Hawke introduced the Sex Discrimination Act and resurrected Whitlam’s idea of universal healthcare in the form of Medicare. John Howard oversaw gun reform and introduced the GST.

But the Howard government also did something that was a milestone in our country’s disability history. At the time he was prime minister, Australian disability rights advocates were instrumental in negotiations on the United Nations Convention on the Rights of Persons with Disabilities. Australia would become one of the first member nations to sign the treaty in 2007, and it was ratified by the Rudd Government in 2008.

Article 19 of the UN Convention states that signatories “recognise the equal right of all persons with disabilities to live in the community, with choices equal to others, and shall take effective and appropriate measures to facilitate full employment by persons with disabilities of this right and their full inclusion and participation in the community…” That includes:

• the chance to choose where and with whom they reside
• access to a range of in-home, residential and other community support services to prevent isolation or segregation from the community, and
• that community services and facilities available to the general population are available on an equal basis to persons with disabilities and are responsive to their needs.

That is what Australia signed up to. And that is what Labor pledged to support in the 2007 election campaign. We committed to negotiate a National Disability Strategy with the states and territories; to explore, among other issues, “how to fund, finance and deliver disability services in the future”.

Australia had in place, at that stage, the Commonwealth State/Territory Disability Agreement. But people with disabilities complained of a lack of consistency in the application of the Agreement, not only State to State but also within States and Territories. Former Queensland Anti-Discrimination Commissioner, Kevin Cocks, can tell you all about it. He acquired his disability 41 years ago in a footy accident. He described life for a person with disability in Queensland in the pre-NDIS era as the misery lottery. If you got funding, you were lucky. Everybody else lived in misery. Without family support, Kevin’s “sliding door alternative” as he calls it, would have been an aged care nursing home where his life expectancy would have only been about 15 years due to poor quality of care.

At the 2020 Summit in April of 2008, disability advocates Bruce Bonyhady and Helena Sykes raised the prospect in the group that I was in that the cost of caring for people with disabilities “represents a very large unfunded liability’ which would ‘continue to grow significantly”. I remember scribbling on butcher’s paper at that forum the words “social insurance scheme for the disabled”. The idea that Australia needed a way for people with disability and their families to be in control of their care – to be able to plan their lives with certainty. To be consumers, not charity.

In 2008, as a newly minted Assistant Minister, I set up the Disability Investment Group of Australian business leaders to look at where we could find the money for people with disability. It undertook the initial feasibility study of the NDIS. This was, followed by a decision by the Rudd government to institute a Productivity Commission inquiry into new approaches to funding and a possible framework.

I want to read you a quote from that 2011 Productivity Commission report:

Most people know little about Australia’s current disability system and do not know how poorly they would be served were they to need it—this is a system marked by invisible deprivation and lost opportunities. Yet major disability can happen to anyone and at any time…Most families and individuals cannot adequately prepare for the large costs of lifetime care and support. The costs of lifetime care and support can be so high that the risks and costs need to be pooled.

Prime Minister Julia Gillard announced that the government would “start work immediately” with states and territories, on measures that would lay the foundation for a National Disability Insurance Scheme. All jurisdictions agreed. That unanimous backing by the states and territories was a great motivation for me personally, and for my colleagues – the Prime Minister and the Minister for Disability Reform, Jenny Macklin – as we worked together to develop a truly national disability insurance scheme.

This was necessary in the same way a national system of income support was necessary. The same way Medicare and the Pharmaceutical Benefits Scheme was necessary to give equal access to medical care and to medications. They are safety nets to catch any one of us if we should fall.

We needed a national system for Australians with significant and permanent disability not covered by existing insurance schemes for traffic and workplace accidents – such as Workcover or the Transport Accident Commission we have in Victoria. We insure our house, our health, and many of us have life insurance.

The NDIS is the government’s policy to protect people who are born, develop or acquire a significant and permanent disability. We have superannuation and aged care policies underpinned by the same universalist values.

One look at the 2021 Intergenerational report and you can see the wisdom of forward planning in these areas. The report deems our ageing population, caused by increasing life expectancies and falling fertility rates, “Australia’s greatest demographic challenge”.

As the population ages, there will be fewer people of working age – or put another way, taxpayers – relative to the number of older Australians. Does it not make sense to prepare for retirement or have structures in place for those no longer able to live in their own homes? The NDIS does this for the cohort of the population who are severely and permanently impaired.

Super and aged care are going to save a lot of fiscal and economic heartache for Australia. Not to mention the comfort they bring to those retiring or facing invalidity. The NDIS is fundamental. It is universal. It is important. And it is consistent with the role of government to not only look after our most vulnerable citizens but with its fundamental role as risk managers.

As Paul Keating said, “The essence of leadership is essentially taking the responsibility of trying to interpret the future to the present.” Our job as a government is to look ahead, paint a picture for Australians, and tell them how we will prepare for any big costs up ahead.  Just like the Titanic, a country’s economy needs time to plan if it is going to avoid hitting an iceberg. Or in the case of disability policy, avoid a “very large unfunded liability” as Bruce Bonyhady and Helena Sykes warned about fifteen years ago.

Government needs to have “vision” as a non-negotiable tenet of its approach to policy. Just like nation-changing reform is not the sole domain of one side of politics, neither is having a vision of what you want to achieve for the country. Unfortunately, that attribute has been lacking for a few years. The NDIS had an absentee landlord and it caused some ‘drift’ in the scheme, in both it’s cost base and the manner in which it approaches its decisions.

Our election promise last May, to get the scheme back on track, is being kept.

Micro economic tasks

I do not dismiss any of the pressures on the NDIS but they should not be overblown to become the only issue that we discuss. There are certainly financial challenges ahead but they are manageable. This seemed to be something the previous government just threw its hands up over. A few issues that seemed too hard to manage and the whole scheme fell into some type Bermuda Triangle of policy.

But the NDIS is bigger – and better – than its problems. We know what is driving the growth. There’s been higher than projected average payments and participant numbers; plan budgets are not acting as a true cost control, with most increases occurring between scheduled reviews; and current incentives for service providers that increase volume of supports, rather than reward outcomes.

A large share of NDIS cost is labour services, which breaks down to 74 per cent support workers and 12 per cent allied health. Only 3.1 per cent relates to assistive technology and capital. Surprisingly, more people are entering the NDIS with lower complexity, and with smaller budgets. Almost 280,000 children make up 50 per cent of total NDIS participants. There are also lower rates of participants leaving the scheme. The assumption had originally been that many children entering the NDIS would exit following early intervention.

Early investment must be effective, not just from an economic perspective, but so children with low level autism, for example, have good outcomes and are assisted in preparation for their education. The same is true for people who acquire disabilities as adults. Early investment improves the lives of participants and their families but also benefits the broader community.

It not only improves productivity, participation, and quality of life, but reduces future cost to governments – in such areas as health, social security, housing, and carer costs, where carers are unable to participate in the economy.

We must also address the fact that the states have retreated from services for kids with disabilities which is not how the scheme was envisaged. I’ve been working to strengthen relationships with states and territories, by increasing engagement from quarterly to monthly meetings with all jurisdictions’ Disability Reform Ministers.

The NDIS itself can’t be the only safety net, and we need to make sure that what is called Tier 2, or additional services for people never envisaged to be in the scheme, are also present in society’s offerings. If the NDIA redirects participants to available state and territory and other mainstream supports where more appropriate, the NDIS will not need to keep picking up the tab for the school, health and aged care systems.

That way, the NDIS is not the only lifeboat in the ocean.

The main impetus for reform is to return the NDIS to its initial vision, and if we do that, we will have an effective and sustainable scheme that supports generations to come. Our approach is moderation of the growth curve, not cruel, ineffectual, brutal, one-size-fits-all cost-cutting that our predecessors experimented with to no great success, and to great harm for the individuals. Crucial to our aim of a reform agenda is to restore trust in the scheme and trust in the government that we don’t seek to merely take away what people have.

We start with the knowledge that effective investment reduces avoidable costs. We have already cracked down on fraud and compliance, with better oversight to improve payments and invoicing systems.

It would be no surprise to members of The Sydney Institute that where there is a large amount of government money being paid to people, other people will engage in opportunistic behaviour to siphon some of that government money before it gets to the people for whom it was designed. And I want to be absolutely unequivocal about this, it is not the participants defrauding the scheme.

If we are to have a discussion about how we improve the sustainability of the scheme, it cannot start by saying that a particular person doesn’t deserve their wheelchair or their home modification, or the very crucial allied health therapy which they need. It starts with recognising that you need to monitor the payments. We need to make sure there’s not overserving, overcharging and underdelivering. The culprits are external players, some of whom have links to organised crime.

It’s hard for policymakers to come to terms with the fact there are people who would target a scheme designed to support the most vulnerable in our community. But they exist and they need to be dealt with. That’s why it was necessary to establish the Fraud Fusion Taskforce not long after coming to government. I used to say in opposition, the government was making it hard to enter the scheme, but they had the back door open. I was wrong.

There’s no back wall on this scheme. There’s no back door. It’s all laid out like lots of Tim Tams on the table. The lack of scrutiny of what I call the unlocked backdoor of the scheme has been exploited by some unscrupulous providers. When invoices can be simply submitted without the participant seeing what the service provider’s putting in, and without the invoice being interrogated by the payment authority, we deserve better. This lack of scrutiny have been taken advantage of.

Government agencies were not talking to each other and that was seen as a weakness to take advantage of, for personal gain. We now have agencies and departments – including the NDIS Quality and Safeguards Commission, the National Disability Insurance Agency, the Australian Federal Police, and my other portfolio agency of Services Australia – sharing information. Since May last year, some 12 operations targeting groups and individuals suspected of fraud have resulted in charges being laid, prison sentences for some offenders, and the seizure of millions of dollars in assets.

Just a few weeks ago, the NDIS Quality and Safeguards Commission established evidence that two Victorian entities had falsified and made inappropriate claims for payment.

This investigation has resulted in the two entities being permanently banned from operating in the NDIS and has removed their ability to rip off people with disability. Apart from the fraud itself being abhorrent, this behaviour has a serious adverse effect on the mental and physical wellbeing of NDIS participants. Anyone considering ripping off the NDIS has now had fair warning that the Fraud Fusion Taskforce means business.

Having people with disability stuck in hospitals when medically fit for discharge is another avoidable cost – that’s in addition to the fact that being in the wrong setting leads to poor health outcomes. These are people who are eligible for the NDIS, but are in hospital, and when they’re medically fit for discharge, still stay in hospital. Not because they want to, but because there’s no plan for where to move them to. It’s terrible for the participant. It’s a shocking cost for the state hospital systems; it blocks up beds. There are no winners in this system.

Before the May election, the Victorian government analysed the average waiting time of NDIS medically fit for discharge people, the amount it took to have a plan worked out and accommodation found to be 160 nights. Multiply this across 1500 people across Australia. 160 nights at $2500-$3000 per bed per person.

In the first months of the Albanese Government, I’ve focussed on working with the states and territories to ensure safe and timely hospital discharge and the NDIA has developed a Hospital Discharge Operational Plan. As of 31 December 2022, the average number of days between an NDIS participant becoming medically ready for discharge and their actual discharge date was down from 160 days – you heard that right, 160 days – to 33.

The proportion of NDIS participants in hospital who are medically ready and awaiting discharge has decreased from 60 per cent in June 2022 to 47 per cent in December 2022. What we have done is identified is that there are still problems in the system with finding adequate housing. But some of the bureaucracy are now being removed.

We’ve also provided the hospital wranglers with the ability to make decisions rather than ever being referred up to somewhere else in the system. And the backlog of home and living decisions has been cleared. These decisions, that previously took an average of 60+ days, now take 5-7 days.

Green shoots

I am delighted that so much of what the government has put in place is starting to produce the green shoots of rejuvenation just eight months in. We said we’ve put people with lived experience of disability in leadership roles. I’ve appointed Kurt Fearnley – Australian Paralympic legend and disability advocate – as Chair of the NDIA Board. And we now have the highest number of people with disability as Board directors in its history.

I’ve also refreshed the executive team of the NDIA, with a new organisational structure and Rebecca Falkingham at the helm as CEO. Our comprehensive NDIS Review is now well underway. Co-chaired by Bruce Bonyhady and respected former public servant, Lisa Paul – and supported by a range of experts – the Review panel is due to deliver its findings later this year.

Since I announced the Review in October last year, panellists have been involved in ongoing engagement with states and territory officials, and with local disability representatives and carer organisations. To date, the Review has consulted with more than 1,400 Australians. This level of engagement is essential if the Review recommendations are to make a real, positive impact on the lives of Australians with disability – and to the smooth and sustainable running of the scheme.

The solutions to improving the scheme are there. I have no doubt. We don’t start with a blank sheet of paper. But for whatever reason – institutional, ideological myopia – the solutions never seem to make it to action.  We’ve also started to tackle some of the other dysfunction in the system. One of the challenges of the NDIA, or the NDIS, is that a lot of people are forced to go to court to the AAT to sort out their claims.

The Sydney Institute has studied all forms of politics and “isms”; capitalism, communism and so on. But the NDIA seem to have invented a new form of economic allocation called AATism. No decision can be made until the AAT decided how it should be allocated. This is not the way to design a system.

The legacy cases which existed in the scheme at the time of the election – there were 4500 matters – 2500 have been dealt with. We’ve introduced new methods of dispute resolution. I don’t pretend that every matter will always be agreed. Sometimes, you’re just going to have the argument. But certainly the amount of litigation was obscene, destructive and stressful.

The Review is also our opportunity to look at some of those big policy improvements that our predecessors shied away from. We’ve also reduced the unacceptable backlog of appeals before the AAT for people who’d been denied NDIS funding. The only thing that particular exercise was achieving was untold anxiety for people with disability and their families, and a ballooning bank balance for a bunch of lawyers.

The NDIS Outcomes Framework is also helping us improve the Scheme by measuring how participant funding impacts the achievement of outcomes – particularly those related to maximising independence and inclusion in the community. The latest Participant and Families Outcomes reports, released on 6 January this year, shows that for NDIS participants aged 15 years and older:

• 62 per cent felt satisfied with their life – a 42 per cent relative improvement
• 78 per cent reported being able to choose how to spend their spare time – a 34 per cent relative increase, and
• for young participants aged 0 to starting school age, 68 per cent of parents/carers say their child can make friends outside of the family, a 33 per cent relative improvement.

For families and carers:

• 55 per cent are in paid employment, a 21 per cent relative increase
• 87 per cent of those in a paid job are working 15 hours or more – which is near the Australian population benchmark of 88 per cent
• and 75 per cent of families and carers feel more confident about the future of their family member with disability under the NDIS, a relative increase of a whopping 80 per cent.

This is quantifiable evidence that the NDIS makes a life changing difference to the lives of participants.

It is something we should be proud of as Australians.

What if there was no NDIS?

So, that’s the big picture. The story so far. I’ve reminded all of us of where and why the NDIS originated.  I’ve talked about how we plan to fix the problems, how we’ve arrested some of the ‘drift’ from the last nine years, and how we are slowly restoring trust in the NDIS.

Labor is committed to the NDIS and only Labor can fix it. That is the task in front of us as we approach the 10^th anniversary.

It is a world-leading Scheme.

That is not spin. It is a fact.

Of course, growth trajectory needs to moderate. There would be no one on the scheme who disagrees with that. But what we need to do is make sure we don’t have a deficit view of the NDIS, and we understand the need to invest, create and identify value, to rely upon evidence for what we fund and for how we measure things.

Of course, the scheme needs to be made sustainable so it stands ready to serve future generations and because none of us know when we may need it. You never know when you’re going to need the NDIS.

Robert Frost, the great American poet laureate once described, when talking about the death of his son at a very young age, the “shafts of fate”.

I’ve got a cousin, 48, a beautiful woman and a mother, who’s had a catastrophic heart attack. She’s strong and doing everything she can to recover. But to realise your own family are in the hospital ward, where you visited two months earlier to sort out bed block for the NDIS, none of us are immune from the need.

But to those who say we can never afford a scheme like this, I say, think about what life for a person with a disability and their family is like.

And then think about what it would mean to have to live that life without the NDIS.

We simply cannot go back to that.

The NDIS gives something money can’t buy and that is peace of mind for the participants and relief from ‘midnight anxiety’ for their loved ones, especially those elderly parents who wonder who will love and care for their adult child when they are no longer there to do it.

The NDIS was formed by advocates and politicians, by the bipartisan agreement of both parties. But for me the inspiration were mothers – and there are plenty of dads who are carers too. But I met so many mothers in that first year or two as parliamentary secretary. It was born of the mother’s movement.

This scheme can’t fulfill that promise of the midnight anxiety yet, but that is my goal. It can mean a child being able to find friends because they have the supports or equipment that allow them to join in. It can mean a mum or dad can work to put a roof over their family’s head and pay their taxes. It can mean many different things to many different people.

I want to read just a small selection of the emails that come into my office to give you a sense of the very human side of the argument.

This from the parent of an NDIS participant.

I am very happy to report that we have had a positive outcome from the NDIA.  [My son] has received an updated plan to match his significant needs and ensure he is able to remain in his current home. Most importantly, he will not be forced into residential aged care.

Another participant wrote, “I suffered a stroke in 2018 and lost the use of my left arm and left leg. If not for the NDIS I would have had to sell the family home… I want to thank you for the NDIS.”

Another from a man whose brother was in danger of having to move out of his group home but was informed a solution had been found.

Yesterday was quite an amazing day. Firstly my brother’s reviewed NDIS plan was approved. Secondly, the bank was convinced to keep his NDIS group house operating…Whatever role you played in this win for the “faceless person who has no voice”…a sincere thank you to all.

You have totally changed the tone of Christmas…from despair and uncertainty to joy and relief.

Another message captured the ‘midnight anxiety’ I referred to earlier. This mum and dad had to appeal the reduction in their daughter’s support to the AAT.

Whilst the road we travelled through those months was a worrying, anxious and stressful time to us as ageing parents in our seventies, we will continue to support our daughter as we have over her 47 years. But as all ageing parents we worry about what happens when we are no longer there to advocate for her…Your words gave us hope…[the] meeting eventuated in all of her supports reinstated.’ 

Those emails, the calls, the face-to-face meetings where I hear the stories of relief and of lives being enriched are the reason Australian taxpayers fund the scheme. Those stories could be any one of us or our loved ones at any time.

 Conclusion

I accept that one of the biggest jobs in the Albanese government is to get the NDIS back on track. It’s a task which I relish. At 10 years of the scheme, it’s a privilege which isn’t often granted in politics; to come back to something that you were involved in at the start and to help get it right.

We really need to shift our thinking on the NDIS. We hear a lot about the price of the NDIS – fair enough – and not enough about the value of the NDIS.

We need more focus on the outcomes achieved, and then use that to govern the decisions and make sure that we get the right value, right investment with the right evidence.

Fundamentally, we need a greater appreciation of the challenges that face Australians with disability.

It’s an investment, not a deficit.

It’s a promise, not a broken social contract.

It’s hope, not misery.

It’s an acknowledgment that, in a country like ours, we have the will and the obligation to support people with disability to have the ‘ordinary life’ they dream of.