Transcript by The Hon Jenny Macklin MP

National Disability Insurance Scheme

Program: ABC RN Life Matters

E & OE – Proof only

Subject: National Disability Insurance Scheme

NATASHA MITCHELL: Welcome Minister.

JENNY MACKLIN: Thank you Natasha.

NATASHA MITCHELL: And we also have John Walsh.John served as the Associate Commissioner in the Productivity Commission’s Inquiry into disability care and support which got this all on the road, and he’s also a Partner at Price Waterhouse Coopers, welcome John.

JOHN WALSH:Good morning Natasha.

NATASHA MITCHELL: Minister, I’ll start with you.You joined us on Life Matters earlier this year of course, in April, to discuss the insurance scheme.Tell us what progress you can say has been made in that time since, in the eight or so months since.

JENNY MACKLIN: Well it’s been a number of very significant steps taken since April.First and foremost in the Federal Budget, we committed an additional $1 billion for the first stage of the National Disability Insurance Scheme.So that will mean that we will be able to start and we’ve also agreed, since April, with five of the states, including the Australian Capital Territory, to start in different ways in those different jurisdictions.And then last week the Prime Minister introduced the legislation to make sure that the National Disability Insurance Scheme is enshrined in an Act of the Federal Parliament, and also that the Agency that will be established to run the National Disability Insurance Scheme, will be established as an independent Agency.

NATASHA MITCHELL: You don’t have Queensland or Western Australian on yet, so it’s not, it can’t be conceived of as a national scheme as yet?

JENNY MACKLIN: Well we certainly have agreement at the Council of Australian Governments earlier in the year from every jurisdiction that they want to be part of the National Disability Insurance Scheme.We always knew that we would have to introduce it slowly, and I’m sure when you talk to John he’ll discuss this idea of having different launch sites, was one that came from the Productivity Commission given the size of the transformation that’s needed. But we still want to get an agreement with all states and territories because we know that people with disability and their families and carers want this change right around the country.

NATASHA MITCHELL: John Walsh, do you share the Minister’s view on the progress of the National Disability Insurance Scheme?How do you see things having progressed over the last eight months or so?

JOHN WALSH: Well first of all I think the Minister and the Prime Minister need to be acknowledged for taking this idea on and sharing the vision of the Productivity Commission, and for the initial funding injection.And I also don’t want to forget Minister Bill Shorten who was really the first national politician to put disability on the map for people with disabilities. I’d have to say that many of the design features of the Productivity Commission report beyond the vision of an NDIS have been overlooked in the planning to date, so from that point of view, we will have to wait and see whether the design of the scheme and the design of the launch sites gives us the results that we’re looking for.

NATASHA MITCHELL: What are the most critical recommendations have been overlooked in your mind? Certainly one of them is that the Productivity Commission inquiry that you were a part of recommended that the scheme be wholly Commonwealth funded.That was the preferred option that the entire cost be funded federally, why?

JOHN WALSH: For many reasons.Disability is a long term, usually a life condition for most people who will be eligible for what we call Tier 3 of the scheme.And reasonably predictable once the need is first manifest and the life cycle is fairly predictable.History in funding of disability has shown enormous volatility with the states and from budget to budget.So what we needed was a stability of funding and a source of funding that was sustainable and efficient, and really the Australian Government is the only government that has the long term revenue raising power to do that.The Australian Government raises approaching $400 billion in funds and has the most efficient taxes in personal income tax, consumption tax, and corporate taxes.So that was the main security reason. The other reason was to recommend a single funder, was to try to avoid the regular negotiating for funding which happens at COAG.And we see it in the health system, we see it in the education system, and we’re now seeing it in the disability system. And it has impeded the, I suppose, smooth and with integrity design and launch of the scheme today.

NATASHA MItCHELL: Are you concerned that that’s going to happen? That this…

JOHN WALSH:…Absolutely…

NATASHA MITCHELL:…That this will become a game of political football between the states and the Federal Government?

JOHN WALSH: Well I think it already is.

NATASHA MITCHELL: Certainly critics of that recommendation that it be wholly federally funded, well people thought it was ambitious, and I guess you’ve stated why you recommended it.But did you see it as ambitious given that it would involve substantial tax reform potentially?

JOHN WALSH: I suppose the Productivity Commission has the luxury of being able to look at what’s in the best long term interest for people with a disability and what’s in the best long term economic and social interest for Australia as a country. So we weren’t constrained by short term difficulty.What we were looking at was what’s the best long term intergenerational solution.

NATASHA MITCHELL: Minister, why didn’t the Federal Government take up the Productivity Commission’s recommendation that the scheme be fully funded by the Commonwealth?John’s got some legitimate and very strong concerns there that this will all become a game of political football?

JENNY MACKLIN: Well I can certainly understand John’s concerns and obviously we’ve talked about these issues.But we have agreed with the states and territories that this is an area of shared responsibility.We certainly agree that the Commonwealth is going to have to put more in than we have in the past and that has been acknowledged, and I think as we come to finalise the agreements on full funding for the scheme it will be clear that the Commonwealth will take a larger role.But it is the case that the states have put the larger share of funding into disability over the whole of the time of the Federation and it’s important that we keep that level of funding going into disability care and support.

NATASHA MITCHELL: And that’s certainly Western Australia’s concern.Colin Barnett is concerned that given the investment that they’ve made as a state they don’t want to water down that investment by signing up to a national scheme?

JENNY MACKLIN: Well I don’t think anybody wants anything watered down and I think if you look at the recommendations of the Productivity Commission and the estimates that have been done by the Commonwealth and State Actuaries about the cost of the scheme, we’re going to see around a doubling in the spending on disability care and support.So I think nobody should think that there’s going to be any reduction in service, quite the reverse.The whole purpose is to address your opening quote from the Productivity Commission which is absolutely right, that the currentsystem of disability, care and support everywhere, including in Western Australia, is underfunded and that’s what we’re aiming to together, between the Commonwealth and the states, we’re aiming to address.

NATASHA MITCHELL: How do you guarantee though that the stability of this scheme over countless political cycles, both at the state level and the federal level though if you go into this sort of funding partnership together in this way as John suggested might happen, that it doesn’t provide the sort of stability that’s needed over the length of a person with disability’s lifetime?

JENNY MACKLIN: Yes, and that’s really the, and that is an absolutely critical part of our objective and of course goes to the heart of the nature of the legislation that we’ve put into the Parliament.It is to establish a National Disability Insurance Scheme.We are not about creating eight different schemes across the states and territories. There’s to be one piece of legislation in the Commonwealth Parliament to establish a national scheme which we contribute to between the Commonwealth and the states.

NATASHA MITCHELL: There’s nothing in the legislation though that locks in the future funding of the NDIS yet, when will that happen?

JENNY MACKLIN: No, there’ll be agreements reached between the Commonwealth and the states, so in addition to the legislation there’ll be an intergovernmental agreement between the Commonwealth and all of the states.And I certainly hope we’ll get the first round of that agreed tomorrow.And secondly, there’ll be bilateral agreements with those states where we are starting the National Disability Insurance Scheme, and that of course in large part will be with New South Wales, Victoria, South Australia, Tasmania and the Australian Capital Territory.

NATASHA MITCHELL: This is Life Matters on Radio National and we’re talking about the National Disability Insurance Scheme.It’s crunch time, how is it going to be funded? There are a lot of lives hanging on the conclusion of that question.Jenny Macklin, the Minister for Disability Reform is my guest this morning, as is John Walsh who serviced as Associate Commissioner to the Productivity Commission’s inquiry into disability care and support. He’s also a Partner at Price Waterhouse Coopers.John Walsh from your reading of the legislation that was tabled last week, draft legislation, do you have any concerns about that legislation thus far?

JOHN WALSH: Um, well it’s introductory legislation. It does the important task of, if you like, registering the business name of the NDIS, so it commits Government as the Minister said right up front, it gets the National Disability Insurance Scheme in legislation, and if passed through both houses of Parliament, it’s something that is a great achievement.Um, there is a lot of process and administration in the legislation which again is not unusual.

NATASHA MITCHELL: Sure is.It’s always interesting having a look at legislation in detail.

JOHN WALSH: For a piece of legislation like this. I guess one thing I would say is that most of the references to people with a disability in legislation are still in the passive voice rather than the active voice, so one of the…..

NATASHA MITCHELL: …Just explain that for us.

JOHN WALSH: It’s about, the person it continues to be the recipient rather than the leader, things are done to the person, (inaudible) requirements are made of the person.The person is involved in, rather than controlling, the Agency does things to the person so the Agency has the control of many of the functions.

NATASHA MITCHELL: And the very point of this scheme is to empower people with a disability to make their own decisions about where money goes to meet their needs?

JOHN WALSH: And that’s not impossible from where the legislation is standing now, but it will be critical in as the Minister said, the way the details are rolled out, that that choice and control for the person and the funding entitlement of the person are paramount.

NATASHA MITCHELL: Anything else in the legislation that you think needs to be there now, fair and square?

JOHN WALSH: I think the legislation, because there have been so many departures from the, if you like, the full model of the Productivity Commission, I think it will lead to unintended consequences in some areas which will have unfortunate outcomes.

NATASHA MITCHELL: What sorts of unintended consequences?

JOHN WALSH: There are several areas, but one example I would give is it focuses heavily on the, and this was pointed out to me by Dr Andrew Pesce who used to be the head of the AMA.It focuses on the requirement of the person with the disability if there can be negligence or a case for compensation, that the person should pursue that compensation.And so what it does is, even though the NDIS will help that person, it will require that person to pursue compensation, which puts the person into the whole common law litigation and …..

NATASHA MITCHELL:…The whirlwind that is…

JOHN WALSH: ..We know that has bad outcomes. One of the consequences of the Commonwealth taking funding responsibility was that that would give it strong leverage over the States to implement the NIIS which are the injury schemes.

NATASHA MITCHELL: Right, so this is the introduction of a National Injury Insurance Scheme which in some manifestations in Victoria and New South Wales, there is that.But the problem is that if you have an accident in other states, become disabled, well, it’s a bit of a disaster actually.

JOHN WALSH: That’s right.So by losing some of the leverage in funding, the Commonwealth has lost some of the leverage in forcing the states to introduce full coverage of injury, so this compensation loophole is a bigger thing than it might have been.

NATASHA MITCHELL: Minister Jenny Macklin, what’s your thought about that?

JENNY MACKLIN: Two things.One is, just on the latter issue about negligence, and people needing to pursue compensation. I think it is very important to acknowledge that the legislation will make sure that people with a disability are covered in the first instance by the National Disability Insurance Scheme.But it is the case that they will be required to pursue compensation if that’s available to them.So, if a person has an accident at work we still do think it is the responsibility of employers to have proper workers’ compensation arrangements and of course to make sure that their workplaces are safe.We don’t want to take that responsibility away from employers, just to use that as an example.

NATASHA MITCHELL: Look, if at the Council of Australian Governments tomorrow, COAG, some states, say Queensland and Western Australia, don’t commit their funding to this national scheme, what are you going to do?

JENNY MACKLIN: Well I think the important thing is to make sure that we get all of the states and territories, including Western Australia and Queensland, to continue to commit to be part of the National Disability Insurance Scheme.

NATASHA MITCHELL: What’s that going to take though?

JENNY MACKLIN: Well I think what we’re demonstrating is that we are able to start.We have got start dates now with five jurisdictions and we’ll continue to negotiate with those other jurisdictions. We want a National Disability Insurance Scheme for the whole country.

NATASHA MITCHELL: Let’s forget the kind of political game…

JENNY MACKLIN: …No, I’m not being political about it.

NATASHA MITCHELL: But for example, I mean, do you have an idea of an alternative plan for a person living with a disability who happens to be in a state who perhaps does not commit to their funding of the NDIS?There’s always a risk that a person will become discriminated against simply because of their postcode and that their state hasn’t signed up?

JENNY MACKLIN: Well of course that’s what we have now, as others have called it, it really is a lottery and does depend on where you live, and how you got your disability and that’s exactly what we’re seeking to fix. I think the good thing is that we have seen from every jurisdiction, and of course this isn’t about politics, because we’ve got New South Wales and Victoria agree to start the scheme.We want to continue to negotiate and I think people with disability in Queensland will continue to press Campbell Newman to say they want him to sign up to the National Disability Insurance Scheme.So I think the pressure will come from people with disability and from carers to say to Queensland, for example, we want you in.

NATASHA MITCHELL: Well it’s a time of cut, cut, cut in Queensland. John Walsh, what do you think will happen tomorrow at COAG?

JOHN WALSH: I wish I knew.I know that all parties want an outcome.I heard Minister Constance in New South Wales say the other night that New South Wales is determined to come out with an outcome. I think there’s goodwill on both sides.Certainly I pay tribute to what New South Wales have done in recent years in really enhancing the lives of people with disability, I think they’ve done the very best that they can.There are limited funds available to the states…

NATASHA MITCHELL: …You’re being generous here because I know that you have a great sense of frustration about this given how much of yourself you’ve put into this process.

JOHN WALSH: There’s a long way to go.

NATASHA MITCHELL: What about Queensland and WA?

JOHN WALSH: I think that really is a matter for political negotiation. what happens between Queensland and WA and the Commonwealth. and I’d rather not comment on it other than to endorse that the postcode lottery is something that we want to try and get over.Notwithstanding that I pay tribute to what WA have done over many years in introducing local area coordination.

NATASHA MITCHELL: When you say there’s a lot to be done, what do you think would be the key first step that you’d like to see agreement on?

JOHN WALSH: Well funding is clearly an important one, but there are many fundamental principles of scheme design around IT, around the insurance model, which really has received very little attention to date and hasn’t really received the investment that’s going to be required to make it work properly. So that whole governance model.The building of capacity for people with disability, their choice and control, their supported decision making, is something that’s a massive job.Many people with disabilities have never made a choice or a decision in their lives, so to expect them to go out and all of a sudden be able to manage funds is a big ask, they need a lot of help.

NATASHA MITCHELL: Yes, I’ve wondered about that too and I will put that finally to you Minister, how you see the model working for people in terms of how they manage, well in effectively what becomes a kind of business, a business with staff, a staff that will meet their service needs?

JENNY MACKLIN: That’s right and that’s why we do need to have a period of transition because it’s both for people with disability, it’s also for carers, it’s also for the service providers that we are expecting them to learn how to do things differently.So we just announced on Monday what we called, money for a practical design fund.So this is really relatively small amounts of money for a large number of organisations and groups to help bring about that change in capacity if you like, because that is absolutely critical to making sure that what we create in the National Disability Insurance Scheme is completely different from what we have now.

NATASHA MITCHELL: Well look I thank you both for joining us to discuss this ahead of COAG. I know there are many, many, many Australian families and individuals who are waiting, waiting, waiting for an outcome here. So Jenny Macklin, Federal Minister for Disability Reform thank you for your time.


NATASHA MITCHELL: And John Walsh, Partner in Price Waterhouse Coopers, thank you very much for coming in to discuss this too.

JOHN WALSH: Thanks Natasha.