Transcript of the Opinion Piece in today's West Australian.

The West Australian, Monday 28 September 2016
Summit throws down gauntlet on NDIS cost
By David Gilchrist

Last month’s National Reform Summit was one of he first realistic and open policy discussions we have seen in Australia for a long time. It included participants from industry, unions and non-profit and community groups and, essentially, laid down a challenge to politicians to implement real reform in a comprehensive rather than a piecemeal and politically-averse way.

One of the key areas of focus was the National Disability Insurance Scheme, and for the first time industry and government leaders are realising the challenges of implementing this critically important policy.

The summit identified that this important initiative was likely to be more expensive and more complex than seemed to be understood in policy circles and that the rollout of the scheme was at considerable risk if there was not a more realistic policy discussion – focused on demand and true cost.

This observation has not come too soon. The NDIS was established during the death throes of the Gillard/Rudd governments and was not well researched or planned prior to the commencement of the trials around the country, primarily because the political drive to be seen to get it started overshadowed the research and planning that should accompany any massive policy implementation process.

Because there was no real research undertaken, and because we still do not know what the levels of demand or what the true cost of service delivery are likely to be, the National Disability Insurance Agency, the government agency charged with implementing the NDIS, is now bound by a funding envelope that is artificial.

This policy corner into which the NDIA has been painted may lead to a significant disruption of critical services to some of Australia’s most vulnerable people if the true cost of service delivery and likely demand are not identified and service providers are unable to operate because of lack of funding.

Combined with higher than expected likely demand – estimates of which were originally based on service user and ABS data which did not match the eligibility criteria now applied by the NDIA – the current $22 billion funding envelope is being stretched by the NDIA as they attempt to fund service providers at unrealistically low levels.

There is growing and justified concern that the amounts being paid for services by the NDIA will not sustain the disability services sector. Ultimately, the risk associated with this concern is borne by those people in our community living with disability.

To be sure, $22 billion is no small amount and we expect any government agency to be frugal with taxpayers’ money. However, the issue is not that these things cost a lot of money or that we should simply throw more money at the problem. Rather, we need to understand the problem before we can identify an effective solution. Without a government appetite for finding out what true cost of service delivery and demand is likely to be, any attempts at identifying efficiencies will be ineffectual and the sector itself cannot focus on assisting government to find solutions.

Commonwealth government funding is critical for sustainability of the disability services sector. However, local decision-making and disability service sector involvement is also critical. The WA experience is a case in point. The Disability Services Commission “My Way” model is likely to help ensure local decision-making and control build on the use of national resources for a better and more efficient outcome for service recipients. Indeed, local decision-making strengthens integration of services – both NDIS funded and others which, in turn, helps engender efficiencies.

The popularity of the NDIS is a very important political asset. Such popularity can be used to allow the Federal Government the political latitude needed to identify the real demand and true cost of service associated with this scheme and to build a plan involving sector cooperation and thoughtful funding arrangements over a longer period. Indeed, the accession of Malcolm Turnbull as prime minister may also allow this to happen. Arguably, he has the political capital needed to reset this important initiative.

The summit’s call for realistic debate may be the circuit-breaker needed to jolt policymakers and commentators into thinking more comprehensively and with a long-term view.

Professor David Gilchrist is the director of Curtin Not-for-profit initiative and a Director of a major service provider in WA.