Senate Estimates Community Affairs Committee Outcome Five – Opening Statement

E & OE

I thought Estimates provided an opportunity for me to give a brief update on the third quarterly report of the NDIS. We’ve now had three full quarters.

I think colleagues will remember that in the first quarter of the operation of the NDIS, that average package costs were $46,300, which was nearly 30% higher than the budgeted average package cost of $35,000.

I was at pains in November last year, I think it was at the National Press Club, to make clear that you do have to be careful in extrapolating one quarter’s results to full scheme. But nevertheless, that’s no reason for the Scheme not to, out of an abundant sense of prudence, to interrogate the results of the first quarter.

In the second quarter, the average package cost fell to $40,600, which was still 15% higher than anticipated.

Following the release of this data I did express concerns to the Board regarding the potential impact of these average package costs being higher than anticipated on an ongoing basis. And it’s fair to say that that’s a concern that was also shared by the Board.

In response the Agency put in place a number of measures to address that situation, which has helped bring average package costs down to within the budgeted average at $34,000.

The third quarter report also shows that 5,400 participants have an approved plan. In the first and second quarter, approved participant rates were around half of what was anticipated in the bilateral agreements. As of the third quarter, we are nearly at 80% of the bilateral target of 6,861 approved participants.

I do want to place on record my admiration for the staff of the Agency for the incredible effort they’ve put in, not only in getting the trial sites up and running, but also for keeping a weather eye to the sustainability of the Scheme and to delivering the Scheme within the funding envelope that’s been agreed between all jurisdictions.

I think colleagues will also recall the Scheme Actuary’s advice that higher costs for supporting people in large residences in the Barwon and Hunter trial sites hadn’t been factored into the bilateral agreements signed by the previous administration, which could – and I emphasise could – result in an extra $100million in costs over the trial. That’s an issue for the trials, not for full scheme.

Colleagues will also recall that previously the Scheme Actuary advised that it’s likely participant numbers and costs for the trial sites could show a difference of over $390 million between the bilateral agreements for 2013-14 to 2015-16 and the Actuary’s higher estimate of participant numbers.

I recognise, and I think we all do, that change of this significance and importance isn’t easy, and that we do need to learn as we go. Which is why the trial sites are so important.

But I do want to just emphasise again in the wake of the Budget, and I think the Budget demonstrates this in an unequivocal fashion, that the Government is 100% committed to the full rollout of the NDIS.

I should also update the Committee that we are forging ahead with three new NDIS trial sites, which will be commencing in a little under a month in the Perth Hills region in Western Australia, in the Barkly region in the Northern Territory, and the Scheme’s first all-of-jurisdiction rollout in the ACT. Also from 1 July 2014 the Hunter trial will extend to the Lake Macquarie area and in South Australia the age cohort will increase to 13 years of age.

Also good news, the Prime Minister opened the national headquarters for the NDIS in Geelong recently and signed an agreement with the Northern Territory for the NDIS trial site. An agreement has also been signed with Western Australia for a trial site to commence there for 1 July, and rollout details are imminently to be finalised with the ACT.

These clearly are not the actions of a government that is intent on doing anything other than rolling the NDIS out in full.

I should, just in conclusion, make reference to the fact that the Board of the Agency published an independent capability review of the NDIA between the last Estimates and this Estimates.

That review did raise some issues that came about as a result of the decision by the previous administration to bring forward the commencement of trial sites by a year from the timeframe that the Productivity Commission envisaged.

In response to the capability review, the Board of the Agency have commissioned KPMG to provide advice on a variety of elements of the capability review, including whether the current schedule is consistent with a successful full scheme rollout. The Board will be providing advice to all governments on this matter.

Just in conclusion, this Government – as with all Australian governments and indeed all oppositions in all Parliaments – is determined to lay firm foundations so that the Scheme is the best it can be for participants now and into the future.

I should also commend the work of the Joint Parliamentary Committee on the NDIS which is proving to be very valuable for the Agency.

A copy of the third quarter report is available online at http://www.ndis.gov.au/document/754.