Transcript by The Hon Jenny Macklin MP

3AW, Mornings with Neil Mitchell: DisabilityCare Australia

Program: Mornings with Neil Mitchell

E & OE – Proof only

Subject: DisabilityCare Australia

NEIL MITCHELL: Ms Macklin, good morning.

JENNY MACKLIN:Good morning, Neil.

NEIL MITCHELL:What’ll it cost?

JENNY MACKLIN: Well, if you’re an average income earner, as you’ve just said, earning around $70,000 a year, you’ll pay an extra 96 cents a day to be exact, but of course it depends on your income.

NEIL MITCHELL: No I mean what will the NDIS cost?

JENNY MACKLIN: Oh, sorry. I thought you were asking about individuals. The net cost for the full scheme once it’s fully operational in 18-19 is estimated to be around eight billion dollars a year.

NEIL MITCHELL: So how much will this raise with the Medicare levy?

JENNY MACKLIN: Around 60 per cent of the total cost.

NEIL MITCHELL: Where will the rest come from?

JENNY MACKLIN: From general revenue.

NEIL MITCHELL: Okay. So this kicks in next year?

JENNY MACKLIN: That’s our plan.

NEIL MITCHELL: But the NDIS doesn’t kick in fully until when?

JENNY MACKLIN: Well, we’re of course still negotiating with the states and territories but we have an agreement with New South Wales and that will start in 2016. As the Treasurer indicated today, all of the money that’s…

NEIL MITCHELL: …2016. Yeah okay. Sorry.

JENNY MACKLIN: Well, the launches will start on 1 July this year and the money for that is already in our budget. We put that in last year. But the important thing is once we really ramp it up, starting in 2016, we’ve got the agreement with New South Wales to do that.

NEIL MITCHELL: But there’ll actually be two years of collecting this increased levy before it comes in.

JENNY MACKLIN: And that’s why we’re putting all of that money in a special fund so that this money can only be spent on DisabilityCare. We really do want to make sure that we have enough money from 2016 available to pay for the care and support that people really need.

NEIL MITCHELL: So, this increase in levy will bring in what, about five billion, will it?

JENNY MACKLIN: A bit over three a year. Three point three in the first year and over the years from 2014-15 to 18-19, it’ll be a bit over 20 billion.

NEIL MITCHELL: And the money that goes into the fund, what happens to that?

JENNY MACKLIN: Some of it will go to the Commonwealth share of the cost of the scheme and some of it will be distributed to the states. So, Victoria, for example, will get around $2.3 billion over the ten year period once they sign up to the full scheme.

NEIL MITCHELL: And what do they have to put into that to match it?

JENNY MACKLIN: They are contributing in the end, once we get to a full scheme, a bit under half. So just over 48 per cent and the Commonwealth just over 51.

NEIL MITCHELL: So, if you’re giving 2.3 billion…

JENNY MACKLIN: It’s around 25 per cent of what we will receive from the Medicare levy.

NEIL MITCHELL: And the money that sits in this fund, is that invested?

JENNY MACKLIN: Just in the normal way that Commonwealth money is.

NEIL MITCHELL: Is it touchable?

JENNY MACKLIN: No. Only for DisabilityCare.

NEIL MITCHELL: And that’ll be enshrined in law, will it?

JENNY MACKLIN: That’s right.

NEIL MITCHELL: Okay. How will it be spent?

JENNY MACKLIN: It will be spent via the legislation that’s already gone through the parliament. So, legislation to establish DisabilityCare Australia, the national disability insurance scheme, went through the parliament in March. There’ll be an independent agency that starts on the 1st of July so they will start operating the launch sites. Here in Victoria, of course, that’s in Geelong.

That will cover around 5000 people and the money will be spent on improved services for people. So, better access to respite care, for example. You know how long people have to wait, make sure people get a wheelchair that actually fits them on time. People get their homes, the ramps done, those sorts of things. All the things that people so desperately need, that’s what the money will be spent on.

NEIL MITCHELL: And the agency will be a new agency?

JENNY MACKLIN: Yes. It’s an independent statutory authority, it’ll have an independent board and advisory council with a number of people with disability on it.

NEIL MITCHELL: And how many public servants will it have?

JENNY MACKLIN: I haven’t got that number in front of you. Of course we’ll have people in each of the launch sites. So, in Geelong, for example, there’ll be around 120 people employed, but many of those will be people who are working with people with disability to get their disability care plans in order. So, local area people who will help people with disability work out all the things they need.

NEIL MITCHELL: What’s the business plan, then? What will the bureaucracy cost to run when it’s up and running?

JENNY MACKLIN: Of course we do need people who are doing the planning. We need a proper IT system. All of those things are going to have to be funded. But we don’t need that for all the country tomorrow. So, we’re planning that out over the next five years.

NEIL MITCHELL: So, when it’s up and running, what will the bureaucracy cost?

JENNY MACKLIN: Well, the bureaucracy will cost, I’ll have to check the final figure, so I can get back to you with that. I haven’t got that in front of me.

NEIL MITCHELL: Okay. But that figure will have been done. If there’s X amount, probably…

JENNY MACKLIN: …it’s all done. But, of course, that’s quite small compared to what we really need to spend the money on which is the care and support for people with disability. That’s where the bulk of the money is going to go.

NEIL MITCHELL: Minister, I’d be amazed if anything to do with the public service was small and restrained.

JENNY MACKLIN: Well, in this case, it will be. Of course, we do need to have people in different regional parts of Australia. People with disability need to be able to get access to care and support locally. But one of the things that the Productivity Commission report demonstrated is we need a very significant increase in the number of people who’ll provide the extra care and support and also the equipment that people need.

NEIL MITCHELL: So, there will be a lot of people who’ll have to be employed through this organisation.

JENNY MACKLIN: Look, people will need people to provide the care and support. They won’t all be employed by the organisation, of course, they’ll be employed by not-for-profit organisations just as they are today.

NEIL MITCHELL: How many disabled people will this cater for in Australia?

JENNY MACKLIN: We estimate around 410,000 people with significant and permanent disabilities. But, of course, the other people to benefit will be the families and carers who are really carrying the load at the moment.

NEIL MITCHELL: And what’s the estimate on the growth of that number of the 410,000?

JENNY MACKLIN: Well, the Productivity Commission estimate that that’s how many people are in Australia at the moment and we don’t expect that to grow extraordinarily. It’ll just grow in the normal way.

NEIL MITCHELL: Did the government look at other ways of funding this, other than the Medicare levy?

JENNY MACKLIN: Yes, we did.


JENNY MACKLIN: We, of course, looked at whether or not we could fund it through general revenue. You’d be aware that there’s a lot of pressure on the budget so to give people with disability and their carers security for the future, we have decided to increase the Medicare levy in the way that’s been announced today.

NEIL MITCHELL: Did you look at other options in taxation?

JENNY MACKLIN: No, these were the two.

NEIL MITCHELL: Right. So, it was existing revenue or the Medicare levy. That was all?

JENNY MACKLIN: That’s right.

NEIL MITCHELL: Okay. No look at business taxes or anything like that?

JENNY MACKLIN: No, we didn’t.


JENNY MACKLIN: We think this is a fair way of doing it, as we have with Medicare. This is a way were the vast majority of Australians who want to make sure that they’re going to be covered if disability hits them or their families that they’re making a small contribution to the overall costs of that risk. And it is a risk that each and every one of us faces. Any one of us could have a baby with a disability. Any one of us could have an accident. And this is a way that we can all contribute.

NEIL MITCHELL: Well, the $12 billion revenue hole was only announced on Monday. When did you decide to put the Medicare levy increase on?

JENNY MACKLIN: Well, I’m not really one for saying when things went to Cabinet, Neil, but it was decided very recently.

NEIL MITCHELL: Well, presumably after the $12 billion.


NEIL MITCHELL: Because the Minister, Penny Wong, said yesterday we need to have a discussion about the Medicare levy and suddenly it’s done.

JENNY MACKLIN: Well, what we’re doing is saying that this is what we’re taking to the people. So, we will, in fact, have a discussion about it. That’s exactly what we’re proposing to do. The Government has said this is what we will take to the election.

The question now is what will Mr Abbott do? Mr Abbott says he wants to fund the national disability insurance scheme. If he doesn’t support the Medicare levy, how’s he going to fund it? What is he going to cut to pay for it? So, that’s the choice that people will have at the election.

NEIL MITCHELL: Is this fair to low income earners? They’re, in effect, paying more, aren’t they?


NEIL MITCHELL: …they’re paying more though, aren’t they, really, effectively?

JENNY MACKLIN: There are, of course, protections right down the lower end. So there are protections for pensioners and other senior Australians, protections for people who are on benefits and very low incomes.

NEIL MITCHELL: Yeah, but they’re not the only battlers. I mean, there are people earning $70,000 with families who are not doing it easy.

JENNY MACKLIN: I agree. I agree with that.

NEIL MITCHELL: And suddenly they’ve got to find $375 a year more.

JENNY MACKLIN: That’s right and of course that’s why the Government has provided a whole range of other supports to families. As you know, we delivered the Schoolkids Bonus at the start of the year. That’s for a primary school aged child around $400, $800 for a family with a secondary school aged child. So, you need to look at the other supports that the Government’s provided to families.

NEIL MITCHELL: You agree, though. I mean, on lower incomes, you going to hurt more than the people on the higher incomes with this tax.

JENNY MACKLIN: Well, on a lower income, of course, you pay less. So, for somebody earning $30,000 a year, they’ll pay around 41 cents a day compared to those…

NEIL MITCHELL: …oh yes, but, I mean, still.

JENNY MACKLIN: It nevertheless, is different. If you’re on $110,000 a year, you’ll pay $1.50 extra.

NEIL MITCHELL: Thank you for your time. It is a tax, isn’t it?


NEIL MITCHELL: Good. Thank you very much for your time.