Disability: We’ve got the Sense, Now for the Dollars

When Jenny Macklin stepped up to the podium at the National Press Club last month to talk up the country’s first national disability insurance scheme, an elephant lurked ominously at the back of the room. The Minister for Disability Reform spoke with genuine passion and excitement about a looming revolution, telling her audience the scheme was finally about to become a reality for people with disabilities, along with their families and their carers.

”I know that for each and every one of you, who have been really crying out in frustration for so many years, that it is hard to believe that we are on the cusp of this,” Macklin began. ”It is true to say we are listening – and I have to say that never before have we listened so hard.”

The speech was titled ”Making a National Disability Insurance Scheme Real”, but Macklin chose not to address the single biggest worry of many of those whose bravery she applauded for sharing their stories (most poignantly on SBS’s Insight program): just where the additional $8 billion or more that will be needed to make the scheme real will come from.

In a sense, the omission was understandable. Macklin was delivering a progress report on what, on any measure, has been an extraordinary policy development. Less than 16 months after receiving a report from the Productivity Commission, the government has committed itself to a scheme and made a $1 billion downpayment in this year’s budget.

The commission’s verdict last July vindicated what those who have been agitating for reform have been saying for years: that the current disability support system is underfunded, unfair, fragmented and inefficient, subjecting those with disabilities to a cruel lottery where the support they receive depends on where they live, what disability they have and how they acquired it.

Macklin’s focus was to set the scene for the next step: the introduction of legislation that will provide for the launch of the scheme in five areas, covering more than 20,000 people with a disability, next July. The Victorian launch, in the Barwon area, will cover some 5000 people. A draft of the legislation is expected in 10 days, before being introduced and referred to a committee before Parliament rises for the year. Then, on December 7, comes the Jerry Maguire moment, when state and federal leaders meet in Canberra to talk about the money.

”Everybody is on the edge of their seats waiting to see what the funding model will be, and waiting to ensure that it’s sustainable, and that it will really allow this to be the biggest thing since Medicare that we expect it to be,” says Rhonda Galbally, the deputy chair of the NDIS advisory group.

Galbally, like the other deputy director of the group, Bruce Bonyhady, has been an indefatigable advocate of reform. Both were singled out for mention in Macklin’s address, with the minister saying: ”If you hadn’t done what you have done, we wouldn’t be where we are today.”

At the last heads of government meeting in July, Victorian Premier Ted Baillieu was ambushed, unfairly accused (with New South Wales Premier Barry O’Farrell) of playing ”cheap politics” when he didn’t accept without question the Commonwealth’s funding model for the launch, and was then seen to back down. In contrast, Gillard was cast as the ”battlers’ champion” after Baillieu agreed to pay an extra $42 million towards the Victorian trial.

The result is a legacy of suspicion that will be a backdrop to the December 7 meeting. Victoria’s starting point is that it is just as committed to reform as the Commonwealth, but that the funding model should reflect the Productivity Commission’s first preference – that the Commonwealth fund the entire cost, directing payments from consolidated revenue into a ”national disability insurance premium fund” and using an agreed formula entrenched in legislation.

Gillard’s preference for a pooled funding arrangement – given that disability is a shared responsibility – was also outlined in the commission’s report, with specified funding shares, a commitment to transparent accounting and penalties for failure to meet commitments.

The total cost of the scheme is estimated at $16 billion a year, compared with the $8 billion now being spent. A 50-50 split would mean Victoria having to find around $650 million extra a year, which Victorian sources insist is not realistic. Can the middle ground be found?

Another contentious issue is the question of risk: who pays if the cost of the scheme turns out to be much more than the estimate? With the Barwon trial, Victoria is paying around 60 per cent of the cost, but the Commonwealth will cover all the risk if it goes over budget. Should the same principle apply when the scheme goes national, particularly given that the scheme will be centralised?

But, even before the funding parameters are canvassed, there are other details to be sorted – details that are deliberately left unsorted in the draft bill but which will determine who is in and who is out, and how ”reasonable and necessary” support will be defined.

The likely view of the states, especially Victoria, is that all the detail should be set before there is an agreement on the funding model, and that this should not happen until the trials are evaluated. Otherwise, the risk of cost blowouts and people being disappointed increases.

For her part, Galbally says it is better that the detail be decided after people have been able to see the draft bill and comment. ”Having the rules to come is actually a really good opportunity for even more input,” she says. ”People from all around Australia will be commenting on it and the aim is to pick up best practice and enshrine it.”

The emphatic view of those in the disability sector is that there should be agreement on the funding model as quickly as possible. Otherwise, you are left with a postcode lottery, where the 20,000-plus in the launch sites get the ”appropriate and necessary” support to reach their potential, while the overwhelming majority remain in a system that is broken.

Another strong argument for reaching agreement before the trials begin is that the funding model would then be locked in before next year’s federal election – and, given that he is a supporter of the scheme, Tony Abbott would not propose to undo it.

If there is a consensus, it is that much will depend on the attitude of the Prime Minister, who must decide where the NDIS sits among the government’s other priorities, including school funding, investing more in dental care, the cost of the surge in asylum-seeker arrivals and, of course, bringing the budget back to surplus. If disability is to be her signature reform, the PM will have to pay the price.

But there is another consensus, too: that disability has moved from the margins to the mainstream, and there is no going back. As Galbally puts it: ”This is a real grassroots demand across Australia – and it’s not just people affected by disability. I think there’s a sense that it has become a real ‘fair go’ issue.”

Michael Gordon
The Age
Saturday 17th November, 2012

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