National Disability Insurance Scheme

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TONY JONES: To discuss the Government’s proposed disability insurance scheme, Community Services Minister Jenny Macklin joined me just a short time ago from our Melbourne studio.

Jenny Macklin, thanks for joining us.

JENNY MACKLIN: My pleasure.

TONY JONES: Now, if the scheme is ever put in place and fully funded, what practical difference will it make to disabled people and their carers?

JENNY MACKLIN: The way that people with disability and their carers describe it to me is that it means, first of all, that they’ll be more in control of what it is that they get every day, that they in fact will be able to determine the pattern of support that they need and get, that they too will, of course, then be able to choose the people who might be caring for them if they’re people from outside.

We won’t have the sort of, the way they describe it, the lottery of sometimes getting a wheelchair reasonably quickly, other times having to wait months and months and months, or, as one person told me recently, having to raise money themselves to get a wheelchair more quickly than they can get it now.

TONY JONES: Now, do you liken this reform to the introduction of Medicare, as some in the disability community are doing?

JENNY MACKLIN: I do, for two reasons. One, because, if you think about it, we do have some very fundamental social policy platforms in Australia.

The pension system, of course, is one of the most fundamental for income support. Medicare is really the other major platform for people who are in need of health care.

One of the big areas that really hasn’t seen fundamental reform – and I’m talking about over a 30 or 40-year period – is the disabilities sector. So we still have a welfare-based sector, a charity-ridden sector, one that really these days very much responds to crisis rather than being based on people’s needs and responding to those needs in a timely way.

So I do think that it is fundamental in the way that the introduction of Medicare was.

It’s also because it is an insurance approach that we’re talking about, and of course the best way of explaining that to people is to use Medicare as an example. Medicare is our national, or public, insurance system, where we all join together and pay to make sure that if you or anyone else gets sick, you know you’ll be able to get cared for.

The same is going to apply now for disability. We do want people to know that if they get a disability, either because of the way they were born or because they have a terrible accident or get an illness that leaves them with a disability, they will get the care that they need.

TONY JONES: Now the Productivity Commission has exposed the massive funding shortfall in this area. It’s so inadequate according to the Commission, it needs to be doubled, and that’s an extra $6.5 billion.

Yet the reform is actually going to move at a glacial pace. So, what’s the soonest that $6.5 billion funding gap could be bridged?

JENNY MACKLIN: Well the Productivity Commission report recommends, as has been made public today, that it will take until 2017-’18 to put all of the building blocks in place before we could expect to have an insurance scheme for disability care and support. And when you think about it, that makes sense.

They’ve gone through the things that would need to be done, the things that an insurance approach needs. Of course that – you need a pricing system, you need a way of making sure that quality standards can be measured and checked, you need to make sure that you’ve got a workforce.

Imagine if we had that money today, we certainly wouldn’t have the workforce ready and able to do the jobs that would then be needed. We also need, of course, common assessment tools, tools that will enable people’s needs to be measured.

All of this work needs to be done, and that’s why we have announced today the $10 million which the Productivity Commission recommended that we put in straightaway to start this technical work to make sure that we can begin the process of introducing an insurance approach.

TONY JONES: It took less than three years for the Whitlam Government to introduce Medibank, yet for a scheme that only covers 410,000 people, it’s going to take five or six or seven years.

Why’s that? I mean, why is it so complex when a system that dealt with an entire population was able to be brought in in two and a half years?

JENNY MACKLIN: It’s really – I just remind you again that this is the recommendations from the Productivity Commission, this is not the Government saying that that’s how long it will take. That’s the first thing. I think if you go …

TONY JONES: Well I understand that point, but the thing that people are puzzled by is if there is a $6.5 billion funding gap now, wouldn’t it be possible to bridge that gap and worry about the complexities of an insurance scheme over time?

JENNY MACKLIN: But this is all about introducing an insurance scheme.

The Commonwealth has in fact over the last three years doubled the amount of money that we’re putting into state-based disability services and introduced a much better indexation system for that money.

So we’re certainly addressing some of the needs, nowhere near all of the needs. We’re adding supported accommodation beds, and so the list goes on.

But what we know is that if we are to change the whole approach, change the thinking about how we deliver support to people with disability and their carers, an insurance-based approach is going to be much more successful.

The Productivity Commission does recommend what they’re now calling “launch sites” from 2014. In the earlier report they called them “trials”.

So this really will be a way in which we can start to implement an insurance approach in some parts of Australia. And of course, between now and 2014, we’ll do the work that will enable us to really figure out how that can best be done.

TONY JONES: And the next thing to figure out and the most important thing really is how to pay for it, how to pay for that missing $6.5 billion. Medicare is funded by an income tax levy. That’s one of the recommendations of the Commission. That’s a way to do it. What do you favour?

JENNY MACKLIN: Well of course the Productivity Commission recommended a range of different options: tax swaps …

TONY JONES: Yes, but that was their second one. The first one was straight out of government revenue. The second one was, well, if you can’t afford that, make a new tax, a levy.

JENNY MACKLIN: And another was tax swaps with the states. So, these are all different options that not only the Commonwealth Government has in front of us, but of course the states as well. And these are matters that we will need to consider ourselves. We’ve only had the report for a little over a week.

TONY JONES: What position do you think will be the right way to go to fund this?

JENNY MACKLIN: Well, I don’t agree with you. I think this is really something that we do need to sit down and work through with the states and territories.

Remember, disability services are the responsibility of the states and territories. We have to do this with them.

We know that there are very, very significant differences between the service systems across the jurisdictions, so that’s why the Prime Minister has today said that she will recommend to the Council of Australian Governments that we establish a new select council, chaired by the federal Treasurer and myself, with state and territory Disability ministers, but also their treasurers, so that we can work out the most effective and efficient way to fund a new national disability system.

TONY JONES: Yes, and the other key question is: who will run the reformed system? The Commission wants the Federal Government to run it as a single funder, but already today the West Australian Premier, Colin Barnett, has come out and said he won’t sign up to a federal takeover, as he calls it, of disability services. Do you have any premiers on side?

JENNY MACKLIN: In fact we’ve had the Victorian Government and the NSW Government out, even before the report was released, asking for the trials to be done in their states, because I think they recognise that the disability systems in their states – and to be fair to them, it’s not just a Victoria and NSW problem, it is a problem in each of the states and territories, that we have a disability system that is broken.

And that is the case in WA as well.

And I’m sure people with disability and their families are telling Mr Barnett that right now: that things in WA are nowhere near good enough. And what I would say to him is that we want to join together with the states and territories to introduce a national disability insurance scheme.

We know we have to do it together and that’s why we will proceed in the way the Prime Minister has announced today through the Council of Australian Governments.

TONY JONES: Jenny Macklin, we’ll have to leave you there. We thank you very much for coming in to join us.

JENNY MACKLIN: Thank you, Tony.