National Disability Services CEO Conference 2015

Location: Hilton Hotel, Sydney

*** Check against delivery ***

These are significant times for the disability sector and I feel a great sense of privilege as well as responsibility having stewardship of disability policy at the Commonwealth level as we progress the largest reform in disability services in Australia’s history.

I am absolutely aware that the NDIS, which is such a significant reform, can only be the result of the very best, collaborative efforts of us all.

The considerable progress achieved already has only been possible by working together and respecting each others’ efforts.

National Disability Services, as a key voice for the sector, has an obviously important role to play in the constructive development of the NDIS over the coming transition period.

And so I read with interest your most recent State of the Disability Sector Report yesterday. My initial response to the report is threefold.

Firstly, I understand that with such a significant reform, for people with disability, their families and for providers of supports, it will take time to get everything right, so the feedback that the NDS collects through the report is very helpful in shaping the future.

Secondly, despite the obligatory negative headline reporting, it is pleasing to see that overall business confidence is holding steady, and 75 per cent of organisations surveyed say they intend to invest in growth.

Thirdly, this report like other aspects of the NDIS, has a range of views expressed.

Some providers find the transition difficult, for others there are already plenty of opportunities, as I will note later in my speech. As a general point the minority notion expressed by some through the Report that the rollout should be slowed to accommodate some service providers is not a proposition that the Government supports. The reality is the NDIS roll out will not be slowed for the sake of some few service providers: the goal here is not to slow delivery but to speed up the supply side of this new market.

I note the report’s “to-do list” containing “20 things NDS would like to see accomplished in 2016” and look forward to receiving the NDS’s suggestions as to how such an ambitious list can be achieved efficiently and effectively within the next twelve months.

I might touch on a few of them as I go through my speech, but in general, as previously noted, I welcome a shared concern for the future of the NDIS, and in hearing from those of you who at the forefront of this endeavor.

I would like to acknowledge the centrality of people with disability and their supporters in effecting changes to successive government policies and community practices in the disability sector, changes that are now manifest in the roll out of the NDIS.

As Minister for Social Services I am primarily responsible for the Australian welfare system. So I am mindful of the report by Patrick McClure that the system is overly-complex with 20 different categories of welfare, about 55 different sub-payment, supplements and various add on payments.

As McClure noted, it is a messy and complicated result of years of payments and systems being layered on top of each other without proper effort to reform the system as a whole.

Remarkably, the other notable feature is that the really important welfare to the most deserving and most in need of assistance was the last thing to occur in the recent history of the welfare system.

In this sense the NDIS is long overdue but equally I hope we can learn from some of the administrative mistakes of the past to ensure that the NDIS is as efficient and effective as it can possibly be.

In presenting to you today I thought it would be useful to begin with a snapshot of the NDIS roll out to date and then touch on three issues of specific importance to the optimal operation of the Scheme.

As the roll out gains momentum, it is becoming apparent how the NDIS will create new markets for goods and services which will benefit scheme participants in so far as their quality of life will be enhanced.

Innovations that will dove tail into the NDIS will also benefit the economy.

A good example of the Scheme’s role in the rise of new markets is highlighted in the National Disability Insurance Agency’s recently released ‘assistive technology strategy’ – the strategy outlines the way technological developments will improve the lives of people with disability.

Some very sophisticated ideas are being advanced to help with everything from daily living to high tech employment aids.

It is hard not to be amazed by the development of prototypes such as that for a thought-controlled wheelchair.

Innovations like this have a great potential for improving people’s lives by enhancing choice and opportunity and could make Australia a world leader and exporter of technology and services aimed at assisting people with disability.

Ultimately, at the Government level, the full economic benefits of the NDIS will all be realised only if the NDIS meets the expectations of participants and this depends on administrative efficiency and long term economic sustainability in the costs of the entire system.

On this point I am pleased to report that the latest analysis of the Scheme – in the NDIS quarterly report on the eight NDIS trial sites to September 30 this year – shows that it the NDIS under the Coalition government is travelling very well.

Nearly 23,000 people have been found eligible to take part so far, nearly 20,000 already have approved plans and, importantly, participant satisfaction levels are high.

Perhaps most critically, total costs to date are within the full scheme funding envelope.

Our Government has fulfilled its election commitment to fully fund the NDIS in every Budget.

However, it is critical to watch and minister and control the transition to full scheme with great attention to ensure that it develops both in a timely fashion but also inside estimated budget parameters – this is because the unavoidable reality is that by 2019-20, the already increased Medicare Levy will cover less than 30 per cent of the $11.5 billion the Commonwealth needs to pay its share of the NDIS – and that $11.5 billion is the figure which assumes that (as has been the case so far under the Coalition) the scheme can be delivered inside the early estimates of future budgets.

Combined with other existing disability spending, we have been left with a $5.2 billion funding gap which we will fill but which we must also ensure does not become a larger funding gap that becomes ever harder to fill.

I can assure you that the Coalition Government is working to fund the Scheme in a sustainable way that does not require borrowings that would need to be paid back by future generations of taxpayers.

Meanwhile, we are on track to see the NDIS roll out across regional and rural NSW and Victoria over the coming twelve months, and nationally by mid-2019.

And just last week, the Commonwealth and Tasmania reached agreement on its transition beginning in July next year to full scheme. We are also working constructively with South Australia, Queensland, Western Australia and the Northern Territory to ensure the best transition for all participants.

But already now with transition bilateral so operative between NSW, Vic and ACT and Tasmania – 60 per cent of the Australian population have complete certainty of their role out timetable.

Since this was number one on the 2016 to-do list from the State of the Disability Sector Report, I think it’s a good start.

As I have noted – this transition period will present new and expanded opportunities for providing innovative and personalised services in an open market.

As the NDIS market expands dramatically in the next several years opportunities will abound for coming years, for both existing and new providers.

It is not only a matter of growth, but of the opportunity for significant innovation and reform that can be engineered to meet emerging market demand.

In this sense, the fundamental tenets of the NDIS, of choice and control, mean that it is vital to ensure that the supply side of the market can respond to people’s diverse needs and preferences.

Government funding is the necessary but not sufficient condition to maximising choice and control – without a vibrant expanding and innovative market of supply funding has no translation into choice and control.

While I know NDS’s State of the Sector report has touched on a whole range of issues, I want to focus particularly on three this morning – NDIS pricing of supports, disability workforce expansion and disability employment frameworks.

I know that the pricing of supports is of concern to some of you.

I know also that the NDIA values the strong input and advocacy of NDS on this very important element of the Scheme.

The Agency will be reviewing prices for key supports in the coming months.

In particular, this will include community participation activities, housing and high intensity supports for participants with complex needs as well as servicing in remote and very remote areas.

Again, NDS will be involved in consultations as part of these reviews.

Agency staff have as recently as last week been on the ground in key roll out areas including Western Sydney, the ACT, North East Melbourne, and this week in North Queensland, talking to providers about early transition challenges.

At full scheme, providing high volume supports such as personal care and community participation will represent more than 50 per cent of total Scheme costs.

The Agency will therefore be looking to set prices that encourage efficient and sustainable service models whilst enabling participants to access services that meet their individual needs.

On this point it must be accepted and understood that prices will not remain static.

Rather prices will continue to evolve, taking account of interrelated factors such as provider financial stability, workforce capacity and Scheme sustainability.

And, in the longer term, the Agency will be deregulating prices as we move to the more open market environment envisaged by the Productivity Commission.

It is comforting to see that there are already positive signs of service providers adapting to the NDIS and being innovative in their use of market opportunities.

The Agency reports that in Barwon for example providers are already restructuring, aligning practices with the NDIA model and beginning to thrive.

Leisurenetworks – a historically small not-for-profit provider in the Barwon area has doubled in size since the NDIS began, going from 22 to 65 staff, which is a great employment outcome for Geelong.

New providers have also emerged in Barwon to fill gaps in the market, delivering new community participation programmes to young people in areas where services have not historically been located.

This realtime example of provider growth in Barwon leads on to the issue of workforce expansion and to the fact that, there are huge opportunities for the NDIS workforce.

The Scheme will require an expanded and diverse workforce to meet the needs of Scheme participants.

Workforce development, like the disability market, is a shared responsibility of the Commonwealth, state and territories, and the NDIA.

Obviously, the disability sector itself also has a leading role to play in attracting, training and retaining a diverse workforce.

Retaining experienced workers and attracting new workers to the sector are crucial.

PricewaterhouseCoopers estimated in 2011 that the disability support workforce will likely need to more than double from 73,600 full time equivalent workers at July 2013 to around 162,000 by full scheme implementation in 2020.

A 2014 National Disability Services report for my Department noted:

The State of the Sector report also notes that at the present time, there are opportunities to attract new workers to the sector, especially young people.

Additionally, the report records that 18 per cent of community service workers said they were underemployed, which means there are opportunities to expand and develop the existing workforce further.

In partnership with the states, territories and NDIA, the Government is exploring ways to address the workforce issue identified in your report through the Integrated NDIS Market, Sector and Workforce Strategy.

This includes working with the sector, education authorities and professional bodies to ensure that professional education prepares graduates adequately to work in the NDIS.

It also means strengthening the sector’s capacity to provide high quality placements and support ongoing professional development so that the disability sector becomes an attractive choice for allied health professionals.

It is heartening to see some of the great initiatives my state and territory colleagues are taking to boost the NDIS workforce.

Queensland recently announced a QLD NDIS workforce strategy with more than $1 million to strengthen and expand their workforce to meet the increased demand generated by the Scheme.

In September, the NSW Government also announced an initiative to spend $10 million to provide 2000 additional training places in courses such as Disability, Community Services, Auslan and Aged Care.

These are all vital NDIS disciplines so this initiative will be a boon to promoting the supply of skilled workers for the Scheme here in NSW.

Projects like these show how seriously all parties are taking the challenges and building opportunities to ensure that there are enough suitably qualified staff to deliver on the promises of the NDIS.

There will be more than one road ahead for workforce development. The views of people with disability are crucial here.

We need to balance the need for qualified workers in the sector with the importance of these workers having the right values.

In the words of one submission to the consultations on quality safeguards for the NDIS:

This is a very pertinent point and I think it is most important that we don’t, in undue haste, overlook it.

We also need to ensure that people with disability can themselves get jobs and so the final issue I wished to address today is to note that the disability employment framework in present existence in Australia leaves room for great improvement.

We need to match the transformational reform of the NDIS with innovative ways to support people with disability get, and keep, jobs.

Job seekers with disability are currently among the most disadvantaged in the labour market.

They are less likely to have post school qualifications and more likely to be unemployed or not participating in the labour force.

Only 52.9 per cent of working age people with disability are in the workforce or actively looking for work. The comparative figure for Australians without disability is 82 per cent.

Moreover, fewer than one third of people assisted by Disability Employment Services (DES) stay in a job for longer than 26 weeks.

It is critical for the individuals and our society that we address these poor results with new and innovative ideas because while the Government is committing the best part of $1 billion to Disability Employment Services each year, employment outcomes for people with disability remain obstinately low.

Many of you will have come across the statistic showing that Australia is ranked 21st out of 29 OECD countries on its performance for disability employment.

We can and must do better.

The Coalition Government wants a society where employment for people with a disability is a first priority.

We want it for reasons of equity, and for the economic benefits to the individual and the country.

Everyone should have the opportunity to work, and numerous surveys have found that people with disability want to work.

In 2011, an economic modelling study by Deloitte Access Economics ^[1] found that Australia’s GDP would increase by $43 billion over a decade if:

• The labour force participation rate for people with disability increased by 10 percentage points from 54 to 64 per cent, and
• The unemployment rate for people with disability decreased by 0.9 percentage points from 7.8 to 6.9 per cent.

Given the current employment figures and this potential future benefit in mind, the Government is developing a Disability Employment Framework that will provide a new model for disability employment support aimed at turning the present parlous situation around.

The Disability Employment Taskforce in my Department is focussed on better assessment, career planning, individualised funding, market-based service provision and supporting employers to create jobs.

The Government’s recently released Discussion Paper outlines four proposals aimed at engaging employers to:

• Identify and create jobs for people with disability;
• Improve recruitment and job matching strategies;
• Create an enabling work environment; and
• Provide tailored and timely ongoing support.

The Taskforce will continue to consult across the sector and has found a lot of good in the present system, such as the JobAccess website, the Ongoing Support and the Job in Jeopardy elements of DES, which help people with disability retain a job.

Importantly, in their first round of consultations, the Taskforce found a strong desire to see people with disability in employment and strong support – particularly from people with disability themselves – for an individually focussed approach to job placement, based on career planning.

There were however some concerns about client assessment processes, including reports of Employment Service Assessments referring people to the wrong service.

Over regulation was another problem, with red tape often having the counter effect of preventing employers achieve outcomes.

Job matching – matching job seekers with the skills for job vacancies regardless of disability – was seen as critical.

A recurring theme from the first round of consultations was the significance of attitudes, both of the employer and other employees, in the workplace.

Building a disability-positive culture remains an important practical requirement to cracking disability employment barriers.

Jessica May, who won the Excellence in Community Accessibility Award at this year’s recent National Disability Awards for her work establishing her firm, Enabled Employment, put it pertinently:

Another very important initiative canvassed in the Discussion Paper is the principle of support throughout a person’s life.

There are several points at which we would benefit from intervention, starting with early childhood and school and extending through to retirement.

The Taskforce has engaged PricewaterhouseCoopers to undertake further work in this area, including a cost-benefit analysis of such interventions.

Ideally, the new Disability Employment Framework will begin in 2018 to coincide with the final stages of the roll out of the NDIS and the end of the current round of DES contracts.

As we work to develop a new Framework, the Government will continue to invest in Disability Employment Services and Australian Disability Enterprises (ADEs).

ADEs are a very important part of the disability landscape. There are 185 Australian Disability Enterprise organisations in Australia providing supported employment assistance to approximately 20,000 people with moderate to severe disability.

Like the rest of the sector, they are facing big changes.

The Coalition Government is investing more than $650 million over three years to June 2018 to provide certainty for ADEs and their supported employees as supported employment transitions into the NDIS.

Meanwhile, as you all know, many ADEs are currently transitioning to new wage arrangements following a Federal Court decision that upheld a challenge to the Business Services Wage Assessment Tool, BSWAT, in relation to two supported employees.

Everyone should understand that this poses viability challenges for the sector. For instance, in work carried out by KPMG for National Disability Services, the accounting firm found that a 40 per cent increase in wages would see 86 per cent of ADEs operating at a loss.

I am today announcing that Disability enterprises which are moving to non-government wage tools can apply for grants from a $9.4 million fund, to help with one-off costs associated with transitioning from BSWAT.

Building on the $141 million fund announced last year, this brings Commonwealth assistance helping organisations transition to new wage assessment tools to $150 million.

The Government’s commitment recognises how critical it is for employees, their families and carers and our society that ADEs are sustainable and can operate into the future without the persistent threat of lawsuits in relation to the wage assessment tool they use.

Work on developing the new wage tool through the Fair Work Commission is going well and I know some of you have been heavily involved in Conciliation conferences.

Due to the diversity of views towards wage tools and ADEs, agreement on a way forward has taken longer than expected.

The Government agrees it is in the best interests of all parties to reach resolution as quickly as possible.

The parties last met in October this year, and Deputy President Booth issued a statement, with agreed shared objectives, including:

• a fair, equitable and non-discriminatory wage outcome to contribute to a living income for employees in supported employment;
• continued opportunity for employment in supported employment settings to build and maintain the self-esteem and sense of purpose of employees;
• sustainable employment opportunities in viable ADEs; and
• to provide security and confidence to employees, parents and carers for the future.

The parties are developing options, including modelling, to endeavour to meet these objectives.

I would also like to announce today that my Department, along with a working group from the Fair Work Commission, is progressing a without-prejudice trial of a modified wages System in ADEs next year.

In the coming weeks, my Department will be inviting around 20 Australian Disability Enterprises to participate in the trial, with around 10 employees from each ADE.

It is essential that we trial a modified SWS to see, in real terms, whether it can be made more suitable for ADEs and what the cost impacts will be.

If you are able to participate in this trial, I want to thank you.

To ensure we are measuring the impacts and evaluating the trial thoroughly, an independent consultant will evaluate the trial.

We want ADEs to be honest about the effects a new wage system would have and to make projections about how it would impact their business model, for example, reducing employee hours.

Alongside the trial, my Department will be working with the sector on other models and options.

By way of conclusion I would also like to update you on the National Disability Strategy.

The Strategy’s first progress report will be released this month. While much has been achieved there is still much to be done.

We are working on the second implementation plan which includes an important focus on improving employment opportunities for people with disability.

We will continue to progress the Strategy because it is the key to ensuring people with disability have access to mainstream services and supports such as health, education and transport which are critical to the success of the NDIS and the broader disability sector.

Today has presented an opportunity to outline the very significant progress that is being made towards changing the disability landscape forever, as well as, detailing the considerable challenges still to be met, including pricing of supports as well as workforce and employment issues.

As you know, I am relatively new to this portfolio but it is one of the most personally fulfilling and most important of my ministerial responsibilities.

All sides of politics, the public and private sectors and Commonwealth, State and Territory Governments are all working together to get this right.

And that is how we will get there – by working together!

Thank you.

¹ Deloitte Access Economics. 2011. The economic benefits of increasing employment for people with disability.