Speech by The Hon Dan Tehan MP

The National Disability Insurance Scheme: The Greatest Nation Building Project on Earth

Paul McClintock AO – CEDA National Chair
Melinda Cliento – CEDA CEO
Lyndal Curtis – Chair of Session

Some of you may have seen Q and A last night which focused on the NDIS.

Today I would like to provide an alternative, more positive, perspective on what is happening.

A scheme the size and ambition of the NDIS has never been attempted anywhere in the world and nobody is saying the roll out is not without its challenges.

However, it is already changing lives. In a very small community in remote Australia, there is a family with children who have developmental difficulties. These children had never said a word when the NDIS touched their lives.

Now, thanks to the support provided by the NDIS and delivered via therapists flown in with the Royal Flying Doctors, the children are now talking and their personal development has improved dramatically – and so have the opportunities available to them for the rest of their lives.

In the next seven years, the Government will spend around $4 billion to construct Snowy Hydro 2.0 to provide new, clean, affordable and reliable energy to our market.

In the next ten years, the Government is expected to invest over $75 billion on major infrastructure projects that will keep Australia moving.

In the next ten years, the Government will complete a $90 billion naval ship building program that will see a complete replacement of our submarine and surface capability.

These are nation-building projects that will deliver thousands of jobs and complete key pieces of economic development for our nation.

However, all of them will pale in comparison to the NDIS – which will be nearly three times the size of the ship building program, at an expected cost of about $252 billion over the next decade.

It is a project that will change the face of Australian society on a level never attempted before in history – a true world first.

It is a project that will require an investment of $22 billion at full scheme in 2020-21, growing to $28.6 billion in 2025-26.

In this year’s Budget the Turnbull Government guaranteed funding for the NDIS. It will be funded. Period. Full stop. End of story. This is a bipartisan commitment.

According to the Productivity Commission, it will create one in five of the new jobs created over the next two to three years.

The NDIS is life changing for participants. It is a Scheme that was developed in part because of a market failure in the delivery of support to Australians with disability.

Today, as the Scheme continues to roll out across the country, 160,000 Australians are receiving support through the NDIS.

For 45,000 of them, they are receiving support for the first time in their lives.

When the Scheme is fully rolled out, 460,000 Australians will be receiving supports. To give you an idea of scale, this would mean one in every 55 Australians will be part of the NDIS.

The NDIS is designed to cover all Australians who have an ongoing and significant disability. The Scheme will fund reasonable and necessary supports for people to help them live an ordinary life.

As I mentioned, life before the NDIS for many Australians with disability was one which was underfunded and a mix of State and Commonwealth services.

Previous systems limited the economic, social and personal opportunities for people with disability and their families over their entire lives.

Most people with disability could not access the supports they needed and had little or no control over who provided them.

The NDIS marks a deliberate departure from a welfare-based model, where the costs of providing disability support were viewed through a short to medium-term lens.

Instead, the NDIS takes an insurance approach, which by its very nature is long-term.

Each person’s lifetime support needs are considered to ensure that they get the right supports, and that they get supports when they are needed.

It means that people receive supports early, rather than waiting until they reach crisis point before getting help.

As of late last year, 30 per cent of participants were receiving early intervention supports.

By investing in people early and focusing strongly on improving participants’ outcomes, the NDIS maximises opportunities and minimises costs over a person’s lifetime.

Take for example the participant who received funding for home modifications.

A ceiling mounted hoist system was installed in their home.

Previously, two personal attendants were required for two hours a day to help this person get in and out of bed.

Now only one attendant is needed.

The cost of the hoist has quickly been recouped through lower attendant care costs.

The Scheme also empowers participants to choose how their supports are delivered and who delivers them.

While these changes are hugely significant in a social policy context, they reflect principles that most of us would find obvious – individuals are best placed to make their own choices about their lives.

This new funding model should, over time, lead to better outcomes and better wellbeing for participants.

The NDIS represents a major social change in Australia.

We are already seeing that people with disability are receiving better support than previously.

Just like those children I mentioned at the start of this speech, living in remote areas and receiving support for the first time.

More than 90 per cent of parents or carers of children up to school age say the NDIS has helped with their child’s development and access to school services.

As I said, the Scheme represents significant social change for Australia. But the investment and the way in which it will help Australians with disability mean that the NDIS is a vehicle for profound economic development.

By taking an investment approach, the NDIS does not just benefit participants, it also reduces the cost of other government programs.

Addressing participants’ needs early reduces the need for acute or crisis care, and reduces the number of people needlessly in hospital because there is nowhere else for them to go.

It is estimated that this could reduce costs on the health system by up to $300 million each year.

The NDIS will also contribute to savings in other government programs which will help offset the increased spending on the Scheme.

Social security payments will be lower and business and individual tax payments will be higher because of the boost in employment to service the Scheme, and by supporting participants and their carers to work and earn more.

Modelling of government expenditure over a 40-year period highlights the scope for substantial fiscal savings in the long-term.

For example, on a net present value basis, introducing the NDIS at a cost of $310 billion over 40 years could more than halve expenditure compared to reacting to problems as they emerge at a cost of $680 billion.

The opportunities to leverage the Scheme to boost Australia’s workforce are immense.

They fall into two categories.

First, the Scheme is assisting participants and their carers to more fully participate in all aspects of life – including work.

Secondly, it is a huge employment generator in its own right, particularly for young entry-level workers.

People with disability and their carers have much lower levels of work than other Australians.

Only 53 per cent of working age Australians with disability participate in the workforce, compared to 83 per cent without disability.

The NDIS will improve work outcomes for Scheme participants in different ways.

Some will be assisted to enter the workforce, while for others, the supports they receive will expand their job options.

The supports may help them work more hours or enable them to get a job that more fully utilises their skills and abilities.

Employment outcomes are likely to improve gradually, with the largest potential centered around young adults about to leave school.

The potential to change peoples’ lives is astonishing.

Let me cite some research from the US which shows the scope for improvement.

A trial of supports for autism students in their last year of school was combined with a very intensive job program.

The employment rate was measured a year after the trial.

The trial saw a jump in the employment rate from under 10 per cent for comparable people not provided with supports to just under 90 per cent for those receiving the supports.

The scope for GDP growth from increasing workforce participation and productivity of people with disability is substantial.

If the level of employment, hours of work and productivity for people with disability in Australia was 80 per cent of the levels recorded in the leading eight OECD countries, GDP in 2050 would be $50 billion higher.

There would be an additional 370,000 people with disability in employment.

That is just the economic value of employment, but we all know the value of a job extends far beyond that.

There are countless benefits of employment beyond a wage. Humans have always worked. Work provides meaning to our lives. It gives people self-respect and purpose.

The Turnbull Government believes that people with disability have the same right as every Australian to enjoy the benefits of employment.

The introduction of the NDIS should also allow some carers to re-join the workforce or increase their hours of work.

The Scheme will give carers the opportunity to re-join the workforce or increase their hours of work with benefits of greater than $1 billion a year.

The Government is developing a range of programs to assist carers enter and re-enter the workforce.

Notably, we are trialling projects under the innovative Try, Test and Learn Fund, which will target about $3.7 million in funding to assist young carers transition from school to work.

Further funding is expected to be targeted at trials for carers aged 16 to 64 years in the near future.

The Scheme will also require a workforce to deliver the supports.

This is the second employment impact that I identified earlier.

Projections are that the disability care workforce will need to grow by 60,000 to 90,000 full-time equivalent workers to deliver the extra supports provided by the NDIS.

This will account for one in five new jobs created in Australia by 2020-21.

The additional workers required to provide services to participants span all regions of Australia and include professional health and allied health services jobs.

I mentioned at the outset that the total disability workforce for the NDIS will exceed that of the NBN and Snowy Scheme combined, and the contribution of the NDIS to jobs growth is already apparent.

Service industries – including disability – accounted for almost 79 per cent of new employment over the 12 months to February 2018.

Specifically, the Health Care and Social Assistance industry recorded the largest increase in employment over this period, increasing by over 150,000 people or 10 per cent.

Some of the increase needed in the workforce will occur organically.

For example, there are some workers who have the required skills and are motivated to provide services to people with disability.

We would expect former carers freed up by the NDIS to be among these.

However, not all of the required growth in providers and workforce will occur naturally.

Government, business and the community will all contribute to boosting the workforce.

A key first step is to provide potential workers with information about the sector.

People need to know

  • what types of jobs are available
  • where the jobs are
  • why working in the sector is rewarding, and
  • how they can obtain the skills needed.

I am sure Government, industry, and the community will work together to provide the information needed for people to pursue work in the sector.

The NDIS will offer significant opportunities for entry-level jobs.

An array of Government employment programs can be leveraged to help meet the workforce needs for the Scheme.

Once people have started working in the NDIS, it may provide the basis for a career in the sector.

For other workers, it can be a stepping stone towards other employment opportunities.

Since the beginning of the NDIS, nearly 11,000 people have been placed in employment with NDIS providers through Jobactive.

More than 1,400 people have been placed into work for businesses servicing the NDIS from the Disability Employment Services program.

In describing the economic impact of the NDIS, I have focussed so far on jobs, for participants, their carers and those employed by the Scheme.

The Scheme doesn’t just lead to more jobs for workers, it also boosts businesses willing to provide services to participants.

Some existing businesses are ready for the opportunity to provide the services demanded by the NDIS, such as physiotherapists and providers of home-based aged care who already provide similar services to different customers.

There are also businesses which are ready to diversify and provide innovative, person-centred services, and we are looking at ways to set and expand businesses to provide the range of needed services across the country.

Numbers of providers continue to grow.

There were 14,271 approved providers of services at the end of March, up 64 per cent since June 2017.

There are also opportunities for businesses to provide assistive technology products to help improve the lives of people with disability.

Over $300 million has been spent on assistive technology under the NDIS to date, and this is expected to grow to over $1 billion by 2020.

In the Budget this year we announced a $64.3 million Jobs and Market Fund and Broader Communication activities where there will be a focus on prioritising opportunities for growing jobs and the NDIS market.

Work to support the development of an e-marketplace and information and initiatives to support job seekers in remote and Indigenous communities are among projects we expect to see under the Fund.

A key signal to the market is pricing.

The challenge for government is to ensure that costs do not blow out, but that prices are sufficient for services to be provided.

While the long-term goal is price deregulation, during the early stages of the Scheme, prices are being controlled.

This carries the risk that prices could be set too high – with resulting fiscal implications – or too low – impacting on service delivery.

To address the risk of pricing errors, there are regular reviews built into the system.

There is currently a review being undertaken on how specialist disability accommodation pricing is determined.

There is also scope for reviews to be undertaken when problems are arising.

A recent example of this is the Independent Pricing Review undertaken last year.

The recommendations from that Review are being implemented, and those changes should improve provider margins by 2 to 4 per cent on average, with even higher margin improvements in rural, remote and very remote areas.

Much of Australia can be considered to be economically resilient.

Most urban and regional centres have experienced growth in population and jobs.

However, there are areas that are struggling to adjust – mainly in rural and regional areas.

There is likely to be demand for NDIS funded services in almost all towns and suburbs across Australia.

This includes areas that have limited job opportunities and areas where there are inter-generational poor employment outcomes.

The rollout of the NDIS can contribute to regional resilience just by funding services.

The Scheme will assist people with disability, their families, and carers to increasingly participate in their communities both socially and economically.

Some of the links to regional resilience are straightforward.

If Scheme participants, their family or carers are able to work more, or set up businesses, it will contribute to the economic base of the community.

Some of the less tangible benefits will also be important.

Civic participation is a major contributor to building strong and resilient communities.

Supporting people with disability, their families, and carers to play a greater role in their communities, can improve community resilience.

In conclusion, the NDIS is a ground-breaking piece of social policy. It will, and is, transforming the lives of people with disabilities across the country.

It is also delivering profound economic change, creating new markets, new employment and new investment.

It is the greatest nation-building project we will see in our lifetime.