Campaign update: What just happened and where to next?

Now that the dust has settled after last week’s bunfight at COAG over the launch of the National Disability Insurance Scheme (NDIS), it is timely to take stock and assess what just happened and where to next for the NDIS.

In the lead up to the COAG meeting on Wednesday 25 July, we received over 7000 messages from Australians telling COAG to lock in the NDIS – an outstanding response and well beyond our expectations. These messages were then presented to our political leaders at COAG as a powerful reminder of why the NDIS has to happen.

COAG was bitter sweet. The good news was the Commonwealth quickly struck agreements with Tasmania, South Australia and the ACT for launch sites starting 1 July 2013. But it was disappointing that no deal was reached with New South Wales and Victoria who had lodged a joint bid to launch the NDIS in the Hunter and Geelong regions. By Wednesday afternoon, an impasse loomed with no obvious sign of resolution, distressing many people with disability, their families and carers in Geelong and the Hunter regions.

From our perspective, the launch of the NDIS had to include the bigger states to ensure the launches would provide a solid base to ensure the successful roll out of the NDIS into the future.

The failure of COAG to reach a broad agreement triggered a spirited couple of days of campaigning from supporters and a huge amount of media coverage (can anyone remember a time when disability had dominated the public agenda – even Sky News were running a Disability Update as developments unfolded). It worked and by Friday afternoon, we were pleased to see a compromise deal, meaning that launches will go ahead in Victoria and New South Wales. The Premiers listened much to the relief for people with disability, their families and carers in the Hunter and Geelong regions.

So pleasingly, but not without some controversy and anxiety, the NDIS will be launched from 1 July next year in the Hunter region and Geelong region, in the ACT as well as two ‘cohort’ based launches; for children aged 0-14 in South Australia and for adolescents in Tasmania.

In terms of the other states, it is fair to say that Western Australia is a work in progress. The stumbling block in the west is one of governance and control rather than any major disagreement over funding. We remain optimistic the Commonwealth and the Western Australian Government can get an agreement to bring the NDIS west through compromise and good faith negotiations.

There are however, major challenges ahead to convince the Queensland Government to commit to a NDIS launch and our campaigners in Queensland will continue to fight for a NDIS launch site in that State.

So despite good progress with deals on five launch sites, the NDIS remains at a critical juncture and our biggest battles lie ahead of us before we can be confident the future of the NDIS is secure.

The Australian Government needs to move ahead to legislate for the NDIS, set up the independent authority to run the NDIS and outline how it intends to fund the NDIS beyond the launch sites. It would be tragic if the NDIS doesn’t go beyond the 20,000 or so people with disability who happen to live with the five launch sites. We can’t have any more lotteries.

So, what about funding in the long term?

During the COAG week, the notion of a levy was floated by the Premier of Queensland, Campbell Newman as a way to find the additional $8 billion per year required for the NDIS beyond the immediate five launch sites.

The levy idea was subsequently rejected by the Prime Minister as well as the Leader of the Opposition Tony Abbott on the basis of political risk – think ‘big new tax’.

The Productivity Commission, whose 2011 report led to the NDIS, recommended it be principally funded by the Commonwealth from general revenue. To find the extra money, the Productivity Commission advised that funding for disability be a core responsibility of government and that money for the NDIS come from re-directions and reprioritisations from other parts of the Budget.

To provide some context, in 2012/13 total Federal Government expenditure is around $370 billion; the extra funding required for the NDIS is $8 billion.

The Commission recommended as part of the approach, the Commonwealth effectively takes responsibility for funding disability services from the States. In return, the States would then give up a number of their own inefficient taxes such as stamp duty by the amount that they spend on disability services. It is fair to say that this ‘tax swap’ element to the deal has not had a great deal of publicity to date and is very complex.

The Commission left the door ajar for a levy to fund the NDIS, however felt this was a less preferential option than having the Commonwealth become the dominant funder in return for a tax swap with the States.

It is worth noting that the Coalition recently re-affirmed its support to introduce the NDIS by the year 2018, with the funding to be found from re-directions from other parts of Government spending.

From the campaign’s perspective, we don’t care where the funding comes from – that is a call for the politicians – as long as the funding base is sustainable and meets the policy objectives of establishing the full NDIS.

The long term funding issue is critical and it will inevitably generate a high level of public and political discourse which could threaten the whole reform if not well handled.

Our view is however, that the $8 billion extra required for the NDIS, should not be seen as a cost but an investment. The Commission said the NDIS easily passes a cost benefit analysis and along with other reforms, would boost GDP by $32 billion by the year 2050. Without the NDIS, accountants Price Waterhouse Coopers said the amount of money required to fund disability in Australia by preserving our current fragmented, crisis driven approach will reach $45 billion per year by 2035 – well beyond the $8 billion extra required for the NDIS.

In simple terms, we can’t afford to not do the NDIS.

So, take a breath everyone and get ready for the next phase of the campaign!