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- [00:01]
A
Hi, everyone, and welcome to Inside Politics. I am your host, Jacqueline Maley, back from a couple of weeks leave. Today we're going to talk about one of the Federal Budget's trickiest customers, the National Disability Insurance Scheme. On the one hand, you have some of the nation's most vulnerable people, the disabled, who are highly anxious about the reforms to the scheme that the Minister for the ndis, Mark Butler, has announced this week. But on the other hand, you have a huge and unsustainable pressure on the Federal budget that is costing all taxpayers and a scheme really that is being targeted by criminals intent on fraud. Joining me to discuss today we have our chief political correspondent, Paul Sakal, as usual, and our special guest, Federal political correspondent, Natasia Chrysanthos, who's been reporting extensively on the NDIS for many years now. Welcome, guys.
- [00:51]
B
Hey, Jack.
- [00:52]
C
Good morning.
- [00:53]
A
So, before we get into the detail of what's been announced this week by the ndis, Minister Mark Butler, I want to ask you both a broader question about the social licence of the NDIS, because it was introduced by the Gillard government in 2013 and it had bipartisan support and even more than that, it had unanimous support across the Parliament. I remember that very well. I was reporting in Canberra at the time and it was a result of the Every Australian counts campaign, which exposed huge, horrible, you know, disgraceful failures in the state based systems for disability care. And I think ordinary Australians were very happy to pay for it and to pay a bit of extra in their Medicare levy to fund it. And now, 13 years later, the scheme costs $50 billion a year. Its rate of growth is a whopping 10%, which is actually kind of relatively modest compared to what it was under the Scott Morrison government, which was a 22% rate of growth. And it's a huge pressure on the federal budget and it's a honey pot for criminals. Tas, I want to ask you, has the NDIS completely squandered its social licence at this point?
- [01:55]
B
I think, and we heard again from the government this week, it's commissioned its own research on this topic. It found, based on the survey that it did, that, you know, more than six in 10 Australians think the scheme's broken. Seven in 10 think it's grown too large. I think the kind of polling that we've done through our masthead shows a similar level of concern. I think it has kind of gotten to the point as well where the narrative, like you say, of organised crime, of fraud, of wasteful spending, of leakage, you know, some of that's an anecdotal. But the Audit Office also said in its report a few years that up to 10% of the scheme is wasted in fraud and non compliance. As that kind of headline figure has grown, I think that narrative has unfortunately shifted. And that is why there are people, both in the disability community, the disability sector and the government, who kind of say quite confidently at this point, that the scheme is at risk of losing public support. And I think part of that also goes to the fact, you know, Medicare that serves 27 million Australians, the NDIS costs more than that, so it probably doesn't square with people's expectations any longer.
- [03:09]
A
Yeah. Paul, I want to ask you about this because it struck me in Mark Butler's speech at the press club this week that on the one hand he said it's a great labor achievement, it's one of the greatest human rights achievements that Australia's ever had, which is a huge claim and maybe it's correct. But on the other hand, you had a Labor minister basically standing up and sort of talking about how bad and how mismanaged a Labor program is. So he talked about research that the government had commissioned about. Yeah, basically that it's lost some support amongst Australians, and then also said it was a honeypot for criminals, you know, that it was an ATM for shonks. This kind of stuff. It was really like, they're almost trashing their own legacy, aren't they?
- [03:47]
C
Yeah, it's. It is fascinating. And all those things can be true. When this game was set up, it was a brilliant exemplar of the Australian social safety net. There are many disabled Australians who struggle to get through life, particularly severely disabled people who need their family to support them. And here was a wealthy country saying, we're going to increase taxes slightly on all Australians to fund this really noble scheme. But the rules that were put in place at that time meant that over labor governments under Gillard and Rudd, and then over the nine years of coalition government, and then the first few years of labor government, this time the scheme became unruly. Effectively, a false economy was created where all of these new markets were set up with people charging whatever they want for taking out someone for a walk, for funding travel to regional areas for mildly disabled people. So over time, you created this behemoth, which was never the original intent.
- [04:41]
B
When the scheme was set up, the point was to get people onto it quickly. Right. So that people could access this support. The way that eligibility was therefore worked out was that you would get in through primarily a diagnosis list. And so the Diagnosis list has a bunch of different diagnoses. It doesn't have ADHD on there, it does have autism on there. And the kind of criterion for autism was like a level 2 or 3 diagnosis, which according to the kind of psychiatrist manual, is when you have higher levels of support needs because there is also a level one kind of support need, autism diagnosis. What a lot of clinical professionals have said is that you've kind of just seen clinicians move at large towards only really diagnosing people with level 2 autism, because that is how they know that their clients can get help. Because you give someone a level one diagnosis, there's no help. You give someone a level two diagnosis, they can access the NDIS automatically. So that's why you've had this kind of significant, you know, some will call it a blowout number of participants with autism because the eligibility structure kind of enabled an unlimited number of people with that diagnosis to enter the scheme. And that's been one way it's evolved, which wasn't quite expected.
- [05:54]
A
Yeah. So there's a moral hazard built in there because if you're a doctor and you want your. Your patient to get support, of course you're going to push them in the direction where they can get the most government support.
- [06:03]
B
Yeah. And at this point, there have been academic studies as well to show that there is a kind of causal effect.
- [06:10]
A
Yeah, yeah. Okay.
- [06:11]
B
With NDIS rollout and diagnoses.
- [06:14]
A
Okay. Let's talk about what Mark Butler did announce this week at the press club. He gave a lot of detail on the changes. These have all been foreshadowed. We knew there was something coming. Did we expect it to be quite this big task?
- [06:26]
B
I think we expected it to be big, I would say. I think, though, what we've seen in terms of how the government's laid out its ambitions with NDIS growth has been. They want to see it grow at a kind of similar pace to other social programs. So say 5 or 6%, the national cabinet agreement between states and territories said 5 to 6% or lower.
- [06:51]
A
A year?
- [06:52]
B
A year, yes. I think what we didn't expect to see is what Butler came out with yesterday and said, I'm actually going to kind of make these major changes which take people off the scheme, slash supports, and we're going to get IT down to 2% on average for the next four years, which is a cut in real terms while we kind of do major surgery on the scheme and once we're satisfied that it's been kind of fully reset, restored back to its original purpose, then it can start growing at that 5% rate.
- [07:21]
A
Yeah. So I mean there was a lot of numbers and it was a bit of a blizzard of statistics, but Basically it's a $35 billion cut over four years and more than 150,000 people are going to be cut from the scheme. They're going to overhaul the eligibility criteria, as you just said. So that'll happen over the next sort of 18 months, I think, or to two years. Everybody on the NDIS now and I guess who joins in the next little while will be reassessed. So that's obviously hugely frightening for a lot of people, isn't it?
- [07:48]
B
There's definitely a lot of. And I think there's been anxiety among Australians with a disability for the last three years, ever since that kind of bill shorten, when he was minister did set out. This scheme needs a reboot and it needs to be returned to its original purpose. I think from that point there has been an assumption that people will be removed from the scheme eventually if it's going to do that. And a lot of those people will probably be, you know, that large group of people with autism who have a different level of need or a lower level of need to others on the scheme. And so that anticipation, I think, has really been bubbling for a few years. The crux, I guess of the concern is that now that we know that at least 160,000 people based on today's figures, up to 300,000 people based on forecasts, because until things change, people will keep joining the scheme every quarter. So we're going to keep growing for at least 18 months. People then will be removed. And the big question is, well, where do they go? A lot of state services have dried up. There are now moves to put them back online, but those negotiations have been thorny, they've been drawn out. There is a lot of uncertainty. You know, it'll vary from state to state as well when the states do step back into this space. So there is a lot of uncertainty and I think, you know, people do fear a reversion to the pre ndis days of, you know, having to fight for support, not being able to get it, not knowing where to go.
- [09:15]
A
Yes. And $10 billion has basically been allocated by the government to the states to set up these, what they call foundational support schemes. So for people, I suppose, who are kicked off the NDIS with a lower level of need, they'll be up. The idea is that they'll sort of gravitate back to the state based care. Paul, I Want to talk about the politics. And notwithstanding, you know, incredibly vulnerable people are, you know, their lives are affected, if not completely changed, by what was announced this week. But, you know, Butler's language, as I said before, it was really strong. He said it was the atm, you know, that the scheme was an ATM for shonks, grifters, fraudsters and crooks, you know, and the worst elements of organised crime. He talked about hard but unavoidable decisions and he said very bluntly that the scheme costs too much and is growing too fast. The rhetoric, I mean, how does that fit with the overall message or the vibe that the government wants to project in the lead up to the Federal budget on May 12?
- [10:07]
C
Will this budget has been framed as one where the government will make tough decisions to rein in the government's spending trajectory. It's also been framed as one that will take money out of the economy to deal with the inflation crisis, which has persisted for longer than we thought it would persist for. So it fits in that sense with a government that's in its second term, has political capital to spend after a massive election win, spent a lot pre election to win votes, in truth, and doesn't have an election for two or three years. So if there was ever going to be a budget where the government did make tough call, this was going to be the one. And to your point, Jack, on Mark Butler's language on shonks and crooks and criminals, this is all the language that Bill shorten used last term as the NDIS minister when he tried to make the first steps towards reining in this scheme. But in essence, Butler's changes yesterday go far beyond the problem of just dealing with the criminal element, which really always was a narrow, easy to argue political point about bad faith operators. In essence, what Butler has said is that this scheme has become totally unwieldy and the essence of it needs to change. Diagnosis is not enough. If you're severely disabled and your functional capacity to live is in question, then this scheme is for you. And so those people should not be scared. But this false economy that's been created, these false incentives that are damaging to the economy because the care sector has grown so significantly since the NDIS has been sparked, it's an unproductive part of the economy. That's where a lot of jobs are being created at a time when the private sector is struggling. So this is not just damaging to the budget, but arguably has been really deleterious for our overall economy.
- [11:50]
A
Tuss I was actually quite surprised and shocked to learn about Some of the lack of integrity measures within the scheme. So it's not a digital system, so you don't even have to kind of upload the evidence for your claim to some sort of, you know, like you do when you make a medical claim. You have to upload a doctor's invoice. He said that There are around 600,000 claims made every day without supporting evidence. And some of the providers aren't even required to be registered. So tell us about that.
- [12:18]
B
Well, only six and a half percent of providers are registered, so 94%, thereabouts operate unregistered. Just to go back to what we were talking about before, when I was, you know, writing a piece on this the other week, I spoke with John de Lebosca, who was the New South Wales Disability Minister, and then he resigned to head up every Australian counts. And he referenced something that someone said to him once about the scheme, which is, you know, it was like building a jumbo plane while it was in the air. Like, this scheme got off the ground so quickly, didn't have the kind of checks, balances, guardrails that you expect of a government scheme that is, you know, giving providers taxpayer money. There were some elements that I think were well intended. For example, the lack of provider registration was supposed to enable choice so that people could choose the providers that they wanted. This kind of reasonable and necessary support was supposed to allow flexibility in practice. It's meant that it's been quite loose. So there were all these. All these kind of things that either, you know, from a good intention or because it was done in a hurry, have meant that 15 years later, this or 13 years later, there are. And Butler is a health and age care minister who oversees those schemes that run very differently, I think, is particularly attuned to this. It's not running in the way that you expect a $50 billion government scheme to run.
- [13:43]
C
It's a shocking mismanagement when you think about how poor the integrity measures are. I mean. Yeah, those stories about receipts being filed and they just get approved no matter what they say. I mean, how labor will get a lot of credit for cleaning this up, because it is quite bold and striking how far they've gone, but should never have been allowed to get here.
- [14:03]
A
Yeah, that is what is so shocking, I think, and it's successive governments. Like it's a bipartisan political obstruction to
- [14:11]
B
a lot of changes.
- [14:13]
A
Yep, that's absolutely true. Paul, just quickly tell us about what you think the political blowback will be or the political reaction from both sides of politics. On this. And is the government in any sort of danger of not getting the legislation through?
- [14:28]
C
Yeah, we were all talking before this show about whether labor had, you know, spent some of its much talked about political capital on this change. I think in some senses they have. This is their baby. This is a Labor scheme that, you know, before it really became such a controversial scheme, there were Labor MPs putting the NDIS logo on campaign material. So labor had for periods conceived of the NDIS as a kind of Medicare like new part of the Australian political settlement. So it's incredible how sharply it's dropped in the public's mind. Labor will have a huge fight with elements of the disability community over this, no doubt, even though they want to protect severely disabled. There will be a scare campaign. No doubt. The Greens are already fighting against it. Other elements of the welfare establishment will fight it. The coalition was gearing up to make significant proposals to cut the NDA. So I imagine it will be a bipartisan process from here on. The other element of the politics that I think is notable is that there's a big question about this government has been can a centre left labor government which is keen to build this, you know, stronger safety net, we saw that at the last election with its big Medicare spend, can it actually pare back the size of government? Can it bring the budget back into order and make a tough call? This decision has to some extent proven that it can do that when it has the will to do so. I think that's an important political moment and an important reminder that this government has a pragmatic streak in it and it can counter right wing arguments about budget management.
- [15:58]
B
I think the question will be whether it's too ambitious, like they're trying to do a lot in four years. It's delivering them an overnight budget saving that's going to help them a lot come next month.
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C
Is there a risk they can't get it down as significantly as they've.
- [16:11]
B
Well, I think the fact that they've tried to get it down, it's taken so long to get. It's taken four years to get it down to 10%. If you look at the breakdown of what's expected, they'll probably they wanting to get to 4% next year and then keep it at 1% for the three years after that. That's a huge overnight change. And the other like the other thing is, even if they were really hell bent on doing it, which you know, they've, they said they are, you do have to co design this stuff with people with A disability. That is, that is the kind of promise of the scheme. You know, the new eligibility tool will have to be worked through. The new planning tool that they've been working on has now been. Its rollout has been delayed. The thriving K. The new scheme for, for kids with autism and development delay, that's been delayed. These things get delayed because they're really complex reforms that need to have humans at the heart of them. And the other thing is like all of these NDIS rules, so many of them are written into legislation. Like you get into legal barriers, you, you, you're dealing with technical complexity. It's a really. Yeah.
- [17:10]
C
Government says they want to overrule court decisions, decisions.
- [17:13]
B
Now it's going to be really hard.
- [17:16]
A
They all, they all. They require the buy in of the states as well, which they've kind of got in principle with the possible exception of Queensland and we don't really have time to get into that. But basically a lot of the budgetary sort of weight they're pushing off onto the states or a lot of these people will be pushed off onto the states, which is always a kind of attention in our, in our federal system. Tas it's been so fascinating to talk about this and I want to get you back on. Particularly as you say, we want to keep covering the rollout of these cuts and how they affect real people and you know, the very, very vulnerable people who are at the heart of this scheme. So thank you.
- [17:52]
B
Thanks for having me.
- [18:02]
A
Paul, I wanted to ask you quickly about the lobbying that's been happening this week in Canberra for a gas tax, a gas on offshore gas exports. There's been a parliamentary inquiry that's hearing submissions, right?
- [18:14]
C
Yeah, there's been a parliamentary inquiry chaired by the Greens into this. This issue has really catapulted in terms of its significance in public debate in recent months. The actu, the peak union body, various other unions, the Australia Institute, which is this influential think tank and activist organisation with links to the Teal Independence and Greens, various online influencers, several labor backbenchers, including the former Industry Minister Ed Husick, have all been arguing firmly that gas companies are not paying enough tax. This stuff comes out of the ground in Australia, it's owned by Australians and we should reap greater profits. And this argument is just like the NDIS actually goes all the way back to the last labor government. Listeners may recall that the Rudd government attempted to put in a 40% mining super profits tax in 2010 or 11. You probably were in Canberra, Jack, that was defeated after a big Scare campaign from the resources sector. Over recent years, labor has tried to tweak the petroleum resource rent tax, which does tax large profits, but they haven't been able to eke much out. It only brings in about $2 billion a year because of a loss carryback provision, which means that these massive LNG facilities, which cost so much money to build, the losses incurred on those capital investments can just be deducted over time.
- [19:38]
A
Yep. And so the argument of the people proposing the tax that they want a 25%, just flat tax on all of these people. So they're saying basically that it's a disgrace that these are Australian, Australian resources, they're owned by the Australian taxpayer and other countries like Japan, are profiting off our gas. There was a viral video, David Pocock, the independent Senator, asking a Treasury official in estimates to basically getting him to admit that the government makes more money from beer excise than it does from offshore gas exports. At least at the moment he was asking. So Ken Henry, the former Treasury Secretary, says Australians are big losers who pay high energy prices while the shareholders of these big multinational energy companies are making big profits. But at this particular moment in time, it's kind of politically tricky to do anything about this, isn't it?
- [20:29]
C
Yeah. The activists have run into an issue at this moment in time which our colleague Mike Foley has written about, which is the fact that in this fuel crisis, given how exposed Australia is due to its low fuel reserves, Anthony Albanese has been running around Asia to Brunei and Malaysia and Singapore and other places doing deals with big fuel exporters to say, we have heaps of LNG here, you need our LNG to power your economies, which many of these countries do rely on Australia. We'll continue supplying that LNG at high volumes and at reasonable prices as long as we can guarantee fuel exports coming into Australia. So the government has been playing down the prospect of this gas tax after Jim Chalmers and there was a leak that showed that the government was exploring doing something on this in the budget. The PM has been publicly downplaying the prospect of a gas tax, but without ruling it out and leaving the option open for a more minor version of the tax which could slap some levies on future uncontracted gas.
- [21:29]
A
Yeah, because a lot of it, of course, is tied up in contracts. So there's a. Critics of the tax idea say that basically it's a sovereign risk issue because we'd be breaking the promises we've made via long term contracts with multinationals and other countries.
- [21:44]
C
Just on the point of the very catchy element of this debate around how gas firms pay less in tax than beer companies that's gone viral online, particularly via, you know, really savvy younger politicians like David Pocock, but also the Australia Institute and an influencer called Punters Politics, who people may know from Instagram, who is quite well known.
- [22:06]
A
He's got a million follow and he actually showed up in Canberra and gave evidence to this inquiry. So, I mean, it was kind of a really interesting crossing of streams between mainstream media and. And, you know, viral social media influencers like him who are enormously popular. I think the kinds of people who probably don't listen to this podcast or read even the Sydney Morning Herald of the age, dare I say it, totally true.
- [22:27]
C
The misleading element of that campaign is that, yes, the prrt, which is this super profits tax on gas firms, does not reap as much as the beer excise tax does in one year. But the element that the Australia Institute and Punters Politics leave out every time they talk about this is the fact that gas firms pay really large amounts of company tax, state royalties, particularly in Queensland. Their overall contribution to government tax coffers last year was about $22 billion. Chevron is actually one of the largest payers of corporate tax. Now, there is a strong argument put by Chris Richardson, Ken Henry, various others that they should be paying more. And our resources taxes have been broken for a long time. But is it as cut and dry as they pay less than beer firms? And these guys are absolutely rubbing us dry.
- [23:13]
A
Perhaps not a tax on beer. I mean, could there be anything more un. Australian than that, reaping more money than a tax on offshore gas exports? I think that's where they were going with that.
- [23:24]
C
I paid 18.50 for a pint of Guinness in Melbourne on the weekend.
- [23:28]
A
That's. That is. That is a. Well, I don't even know. I mean, it's a tragedy, a travesty, an UN Australian act. This is disgrace. Bottom line, do you think the government's going to do anything about this in this next coming budget or indeed after that?
- [23:44]
C
I think it's unlikely in the budget. If they do do something, which is still a possibility, it will not be the 25% export tax, because there are legitimate arguments from the sector and some others around the place that it may be a sovereign risk issue. And given even if that's a small prospect, the government won't want to do anything at this point to jeopardise relationships with Asian trading partners. So if the government does proceed with it and Chalmers and others in the government are keen to see something to bring in more revenue to fund a broader business tax incentive package and tax breaks for business to stimulate investment. It will be smaller than what's been proposed by advocates, but it's not. It's not likely, but it's not ruled out either.
- [24:29]
A
Okay, let's keep an eye on that and I will let you go, Paul. And, you know, have a Guinness on me tonight or indeed earlier. Then you can have it at lunchtime if you want to.
- [24:39]
C
Oh, thanks for the approval.
- [24:41]
A
Yeah, thanks again. See you next week.
- [24:42]
C
Thanks, Jack. Bye.
- [24:50]
A
You can read all of our political news on our websites, theage.com au or SMA. Today's episode was produced by Chee Wong with help from Debbie Harrington. Our executive producer is Tammy Mills. And our podcasts are overseen by Lisa Marksworthy and Tom McKendrick. Before you go, follow Inside Politics and leave us a review on Apple or Spotify. I'm Jacqueline Maley. Thank you for listening.