On the road to a better NDIS
by Sam Bennett
The National Disability Insurance Scheme we have today is not the one envisaged when the world-leading scheme was introduced in 2013. It has grown too big too fast.
The NDIS cost more than $46 billion last year and is projected to cost more than $58 billion by 2028. At the current rate, it will exceed 2.1 per cent of Australia’s GDP by 2033-34, with only support to seniors and revenue assistance to the states and territories costing the federal budget more.
These burgeoning costs need to be reined in, and this week’s reform announcements by Health Minister Mark Butler are a step in the right direction.
Beyond the budgetary imperatives, NDIS reform is also vital because the scheme as currently designed is ill equipped to meet the needs of some of the 740,000 Australians who rely on it. In particular, the NDIS has become what Butler described on Wednesday as the only port in the storm for hundreds of thousands of families of children with developmental delay and autism.
Nearly half of all NDIS participants today are children with developmental delay or autism. One in nine 6-year-olds – and one in seven 6-year-old boys – are now in the scheme. Most were expected to need only short-term help, yet in practice many stay for the long haul. Each child who remains in the scheme for life could cost the NDIS $2 million or more.
But the NDIS design is not well suited to delivering timely and evidence-based early intervention. Loosely allocating money to families, who must then differentiate between therapies in the marketplace under pressure from providers, is not the optimal approach.
We have spent too long admiring this problem and almost as long prevaricating over the solution, so Butler’s National Press Club speech about correcting course and introducing a “Thriving Kids” program is welcome.
Thriving Kids is the new name for the foundational supports – disability-specific supports outside of individual NDIS packages – that the 2023 NDIS Review called for as an alternative for many children aged up to nine.
Butler said this service would entail a new bulk-billed Medicare item for children’s health checks to pick up any developmental concerns and trigger referrals to appropriate supports. He confirmed the federal government would take the lead in the program’s design and committed ongoing funding to run it – previously sticking points in stalled negotiations with states on their share of the budget.
If Thriving Kids reflects the Grattan Institute’s proposals to replace early intervention in the NDIS with an evidence-based program that delivers supports that are integrated into the mainstream settings in which children live, learn and play, it should be a significant improvement.
It is encouraging that the announcements included the intention to adjust NDIS eligibility criteria so that children can be directed to the new service – something the government has previously avoided doing. This should involve removal of the NDIS early intervention criteria, to ensure there are clearer boundaries between these services and to help reduce pressure on the NDIS.
Our research suggests a well-resourced program will be needed that can cater to higher intensity, as well as lower intensity, needs eventually requiring $3 billion per year as equivalent NDIS supports are switched off. So the $2 billion committed by the federal government this week is a good start, but it is unlikely to be enough in the long run, even with states ultimately tipping in their share.
And Thriving Kids won’t be enough by itself to get the NDIS back on track. Minister Butler referred this week to a further wave of reform being needed to bring the NDIS funding growth rate down to the 5-to-6 per cent level he suggested.
Supports outside the NDIS are needed for other disabled people too – including information, advice and low-level supports for all disabled people, and further targeted programs for people with psychosocial disabilities resulting from severe mental illness. Recent government analysis estimated more than 230,000 Australians have severe unmet need for psychosocial supports.
The recent portfolio change that has co-located the NDIS with Butler’s other responsibilities, including for the mental health system, presents opportunities to address the funding cliff that exists for these Australians.
Recent Grattan Institute research showed how these services can be funded from within the existing budget envelope for the NDIS without requiring new funding.
Additional reform will also be needed to ensure the NDIS can operate effectively within the parameters of any future growth target. Currently, the NDIS sets budgets inconsistently, offers rigid plans for people with disability and provides limited support to those people during the planning process.
This leads to a poor experience for many disabled people and undermines the scheme’s ability to manage claims within its funding envelope – a key responsibility of any insurance system. Major reforms initiated last year to improve this system by introducing a new assessment and planning model are barely off the starting blocks – despite billions of dollars in savings attributed to them already being baked into the budget forward estimates.
Bold action on multiple fronts will clearly be needed during this term of government to ensure the NDIS endures for the many disabled Australians who rely on it. But there is reason for optimism that, with more detail and concerted action, Thriving Kids just might achieve the compelling promise its name encapsulates.