Rebuilding from the Ground Up: A National Disability Insurance Scheme – Speech to the Grattan Institute, Melbourne
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Thank you John [Daley] for your warm welcome, and to the Grattan Institute for having me here today.
I’d like to acknowledge the traditional owners of the land we are meeting on and pay my respects to their elders past and present.
This is a difficult crowd for acknowledgments because we have with us today some extraordinary advocates for people with disability, their families and carers.
I would like to acknowledge each of you for your interest in this important area, but want to make particular mention of:
- Bruce Bonyhady, Chairman of Yooralla,
- Dr Rhonda Galbally, Chair of the National People with Disability & Carer Council (TBC),
- Stella Young from ABC’s Ramp Up, and
- Alan Blackwood and Bronwyn Morkham from the Young People in Nursing Homes Alliance.
It’s a pleasure to be with you, an opportunity not for announcements but to discuss in detail one of the most exciting and – dare I say it – revolutionary changes in social policy that we’ve seen in Australia in a generation.
I want to set out to you today the scale of this change, and its rationale.
I’m speaking of a National Disability Insurance Scheme.
Doing something different is desperately needed in disability.
Disability doesn’t discriminate – it could happen to anyone.
Any one of us could fall off a ladder, or have a stroke.
Any one of us could have a child or a grandchild born with cerebral palsy or Down syndrome.
On average, every 30 minutes someone in Australia is diagnosed with a significant disability.
And today, disability equates to disadvantage.
People with disabilities and their carers are among the most disadvantaged groups in Australian society in terms of social isolation, financial status and personal well-being.
This is the product of a system the Productivity Commission has described – now famously – as “unfair, underfunded, fragmented and inefficient.”
The Productivity Commission estimates that around 410,000 people in Australia have significant and permanent disabilities that require ongoing care and support.
Around 295,000 people are supported today through the current arrangements.
It’s an approach where access to services and support depends more on your postcode or on the cause of your disability than your need.
Where people can wait years to get a suitable wheelchair.
Where carers can’t see a future, and see instead the prospect of years without respite stretching into old age.
Where they don’t know what will happen to their son or daughter when they are too old to care for them.
These are the frustrations of a system that responds to crisis, that drips out support rather than invests in someone’s future.
These are the frustrations of a system in crisis.
PricewaterhouseCoopers has estimated that over the next 20 or so years, the inefficiencies of the system and the collapse of informal care will see disability expenditure skyrocket.
In reality, it is no system at all.
The Framework for Change
This is what struck me in my early days as Minister:
The lack of a system and the terrible consequences of that failure for people with disability, their families and carers.
That people with disability and their carers are “shut out” from opportunities and from independence.
In our first months in government, we started work to build a system where there wasn’t one.
We commenced negotiations with states and territories and signed a new National Disability Agreement, which has seen us doubling funding for disability care and support. We delivered historic increases to the disability support pension and carer payment.
We agreed the first National Disability Strategy, a ten year plan to increase access and support for people with disability across our network of social supports, including in the health, education and employment systems.
We released the first National Carer Strategy, to better recognise and support carers.
We have worked to plug the gaps, with new funding for early intervention for children with disability and in capital infrastructure for supported accommodation.
And we have uncapped access to the Disability Employment Service, and are investing more in education for children with a disability.
Each of these are critical steps to building a system that supports people with disability, their families and carers.
But it’s not enough.
Because to put it bluntly: you can’t build a house with Bandaids.
When we were new arrivals to the Ministerial wing of Parliament House, I was visited by an old friend.
Brian Howe, former Deputy Prime Minister, brought with him Bruce Bonyhady, the chairman of the disability service provider Yooralla and the father of two boys with cerebral palsy.
Brian and Bruce were on a mission, born of a conversation about the need for change in disability care and support, in which Brian had said – “We’re thinking about it the wrong way. Really, it’s an insurance and risk issue.”
This tallied with the thinking of Sydney actuary John Walsh, who had recommended to governments a long term care scheme for catastrophic injuries.
The Insurance Approach
And these are the two central ideas behind a National Disability Insurance Scheme.
One, that disability is for a lifetime – and so we should take a lifelong approach to providing care and support.
Two, that an insurance approach allows us to share the cost of risk across the community.
This is the approach detailed in the Productivity Commission’s report into disability care and support, released by the Prime Minister in August last year, which recommends a National Disability Insurance Scheme.
It’s an incredible piece of work, and I want to publicly acknowledge Patricia Scott and her team, Associate Commissioner John Walsh and the Independent Panel including Bruce Bonyhady and Rhonda Galbally for their enormous contribution.
18 months of work, more than 1,000 submissions and nearly as many pages long, this report details a radical idea to change the system of disability care and support – to turn it on its head.
We’re familiar with insurance for our cars or our homes, where the risk of something happening is shared.
We join together to insure ourselves for health needs through Medicare.
And in most states now, the risk of injury from a motor vehicle accident is covered with no-fault insurance schemes. The Productivity Commission recommends we extend these arrangements for catastrophic injury across the country, through a National Injury Insurance Scheme.
Outside existing no-fault schemes today however, there is no universal insurance against the risk of disability through accident or disease, or for those born with a disability.
A National Disability Insurance Scheme would insure all Australians for the cost of care and support in the event of significant and permanent disability.
The risk of disability is universal – it could happen to anyone, at any time.
To spread the risk across the community requires a small investment from all of us for a significant return – the reassurance of support in the event of something happening to us, or to a loved one.
Like Medicare, an NDIS would provide universal coverage to Australians. Like Medicare too, it will be built by a Labor Government.
But unlike Medicare, which meets the immediate health needs of Australians, an NDIS needs to achieve something different.
- It needs to look beyond immediate need, across the course of a person’s life.
- It must consider a person’s living circumstances in working out the right care and support for them.
- It demands a funding pool based on actuarial assessment of need rather than on historical budget allocations.
- And it must manage costs over the course of a person’s lifetime, within an independent insurance framework.
Significant and permanent disability is the challenge of a lifetime.
And yet the way we currently provide care and support to people with disability doesn’t reflect that. Instead, it considers support as a year by year proposition, moving from one Budget cycle to the next.
When you’re balancing an annual budget, a big outlay for intensive early intervention therapies or for home modifications can take a big whack out of your budget.
Providing some respite or some attendant care is a much cheaper option.
But what you miss out on is the opportunity to invest to improve a person’s life – and save in the long run, with smart investments – investments in people.
Home modifications might be expensive upfront – anyone who’s renovated a home can tell you that.
But if they afford a person with a significant disability the opportunity of greater independence, or if they mean that a parent carer can continue to care for their loved one, it’s a good investment.
Insurance principles allow us to see that with expert knowledge, a sufficient funding pool and good information – you can make a positive investment over the course of a person’s life.
You create a system incentive to deliver better outcomes for people.
Rather than forcing people to compete for services, you’re forcing the system to deliver the best possible outcomes for people with disability, their families and carers.
For scheme administrators, an insurance approach demands a long-term understanding of the liabilities of the scheme, and the impact of different ways of providing support.
With good data, administrators can build a picture from an individual, across a system. We learn the most effective ways to help people achieve better outcomes and to act early, rather than wait for a crisis to hit.
We learn the most efficient ways of working. The Productivity Commission argued in their report that the economic benefits of an NDIS would outweigh its costs, because an insurance approach encourages independence for people with disability.
The approach supports choice for people with disability, their families and carers, puts people in control of the care and support they receive, based on their need.
It’s not a rolled gold service – instead, it responds to peoples’ needs over their lifetimes, by providing reasonable and necessary support.
And it does not mean replacing the care of parents and family.
The support of families, friendship groups and in communities is critical to improving the lives of people with disability.
Social isolation is one of the big causes of disadvantage for people with disability, their families and carers. And the care of a loved one will always mean more than formal, attendant care.
But our current system doesn’t support long term, sustainable care, and it doesn’t encourage community support. Instead it exploits the love of family carers, too often leaving them exhausted and alone.
The flexibility of an insurance approach – a concern to drive the best outcomes for people with disability and their carers – recognises family and community supports, and seeks to make those sustainable over the long term.
We are talking about building a system that by its very nature does all we can to avoid crisis.
About building a smart system.
About building the most significant social reform in Australia since the introduction of Medicare.
The challenges of change
But like any well-oiled machine, the success of the system is the product of its component parts.
The wheels and the cogs have to work together.
We are working with state and territory governments. They are critical partners in change, as the primary funders and deliverers of disability care and support.
But governments alone are not the keepers of knowledge in building this system.
We must rely on the advice of experts in commercial insurance and in implementation.
And of experts in the lived experience – people with disability, their families and carers, disability care workers, service providers, representative organisations and advocates.
And we must face the reality that this has never been done before.
The Productivity Commission has recommended that the launch of a National Disability Insurance Scheme occur from the middle of 2014, involving the introduction of this new approach in selected regions around the country.
People with disability who have significant and ongoing care and support needs, would be assessed and would work with a local area coordinator or case manager, their families and carers, to make a plan for their lifetime care and support needs.
The Productivity Commission identified that the launch will be essential to test the operation of the scheme, and to learn how best to manage the transition for people with disability, their families, carers and for providers.
Because our best knowledge works in theory, but we are responsible for ensuring it works too in practice.
We know that more funding is needed to progress to launch – it’s a critical cog in this machine.
It’s true that disability care and support has been chronically underfunded for decades.
It’s also true that the cost of launching and building an NDIS is significant.
The Productivity Commission estimated that the additional cost of an NDIS at maturity would be in the range of $6.5 to $8 billion per annum in today’s dollars. The Australian Government Actuary is validating this estimate, working with state, territory and Commonwealth treasuries.
And we still feel the reverberations of a global financial crisis, company tax receipts are down and families, as well as state and Commonwealth governments, are feeling the pinch.
So finding money in this environment is a difficult task, and doesn’t always sit easily with our desire to create real change for people with disabilities, their families and carers.
But it’s also not the only task at hand. An NDIS is not, as some would have you believe, only about more funding.
The change that is required is not only about “more”.
To launch an NDIS, we have to build a machine from the ground up, each piece working seamlessly with the others – we can’t just add more oil to the engine.
Over the past eight months, we have been working with the states and territories to lay the foundations for launch of a National Disability Insurance Scheme.
We are working to lay these foundations by mid-2013 – a year ahead of the timetable set out by the Productivity Commission.
Considering critical questions, such as who is eligible for support and what an entitlement to reasonable and necessary support looks like.
National quality standards, to ensure that when a person in Brisbane receives care and support they can be assured of the same quality as a person in Perth.
Assessment tools, to measure the needs of people with disability and their carers.
Working out packages of support – what constitutes reasonable and necessary, particularly when people with disability have a wide range of needs.
The business systems needed for an independent insurance framework, so that we can build a system picture of what works for people with disability and their carers and manage costs over time.
These foundations are the essential parts without which the machine can’t function.
Each element affects the total design of a scheme and they must work seamlessly together – how people engage with the system, how peoples’ needs are identified and supported.
Currently, every state and territory has different arrangements in place, and so building an NDIS will require starting not from one point, but from eight different points.
Within each state and territory are different providers of disability services, and different funding arrangements for those providers. Some have been practicing individual funding for some time, while others have just begun the transition to this person-centred approach.
In moving to an NDIS, each of those providers will need to be supported to change to a new way of working.
It’s a significant business transition, particularly for some very small organisations and it’s critical we make that transition smoothly, so that people with disability are supported through the change.
And it’s important that we support organisations to make the transition, because diversity of services is critical to giving people with disability choice. Without strong service providers there are no choices available to families.
We have to support a workforce transition too. Not only will we need many more workers in disability care and support, but they will be working in a different way and in some cases, doing different jobs. We need to ensure that our disability workforce has the rights and protections in place for a safe, and a good job.
For many, this will be the first time people with disability and their carers have choice over the care and support they receive. For some, daily transactions like buying groceries would be new -so the management of funds for essential care and support is a very big step.
We need to ensure that there are safeguards in place to support people to exercise choice and control; to support people to make informed choices.
We need to support families and carers to make the transition, and we need to make sure that their role is supported and nurtured through a scheme.
And we will all need to change the way we think.
For government, taking an insurance approach requires handing the reigns to experts to manage the scheme through an independent authority – not something that comes easily to Ministers.
Ministerial oversight of governance and scheme operation is essential to ensure that we meet our responsibilities for public expenditure. That must be reflected in scheme governance arrangements.
To operate well however, an insurance scheme must be independently managed, and must not be subject to the vagaries of politics, electoral and budget cycles.
We want to move away from a system in which people with disability, their families and carers are forced to ask for everything in the hope that they’ll get something.
At the moment people are forced to accept anything – for fear that they’ll get nothing.
We want to build a system that understands and responds to need.
But it will take a while for people to trust that. It will take a while to move our collective mindsets beyond today.
Thinking to tomorrow – for people who have woken up each morning to deal with today – is the opportunity presented by an NDIS.
We have come a long way since Brian and Bruce walked into my office.
We’ve come this far because of the courage of people with disability, their families and carers who have told their stories, have brought into the light what has been hidden for decades.
These stories that drive us to make a change, that have propelled disability to the front pages of our newspapers.
It is the determination and the unity of the disability community that has turned this awakening to action.
As we work, I am acutely conscious of how long people with disability have waited.
All too often, disability is a story of waiting – for a wheelchair, or at the end of a phone to find a place in respite.
I think people with disability have waited long enough.
It doesn’t take away from the scale and the complexity of the work we have to do.
It doesn’t take away from the tight fiscal environment in which we are working.
But we must put people first – making sure we are on the ground, making a difference for people with disability, their families and carers.
The work of activists and advocates is to herald the call.
The work of academics and experts is to develop the ideas, the approach.
And it is the work of all of us to make it happen.