Inside Story

Is this the NDIS’s robodebt moment?

Are exaggerated fears about the cost of the disability scheme pushing it further from its founding principles?

Mike Steketee 30 July 2021 2406 words

At the beginning: disability advocate John Walsh in February 2011, shown here with Labor ministers Jenny Macklin andBill Shorten when he was working on the Productivity Commission’s report on disability care and support. Alex Ellinghausen

“Ministers agreed Independent Assessments would not proceed.” With this bland statement, buried in the communiqué of a recent meeting of federal and state ministers responsible for the National Disability Insurance Scheme, the Morrison government’s grand plan for reform of the NDIS — aka reining in costs — vanished in a puff of smoke.

There’s no chance of the plan’s being revived this side of the election given how united people with disabilities have become in expressing their outrage with the government. Or, as one of the architects of the scheme, John Walsh, puts it: “I can’t begin to say how angry I am about the way Australian governments collectively have let down people with disabilities.” Until recently, Walsh served on the board of the administering body, the National Disability Insurance Agency.

Yet, unlike most in the disability sector, Walsh agrees with independent assessments of the support NDIS participants receive, if not necessarily in the form the government was planning. The assessments were proposed by the Productivity Commission in its landmark 2011 report recommending the introduction of the NDIS — the inquiry on which Walsh served as associate commissioner. The problem now is that the government has lost the trust of a disability community that suspects its motives at every turn.

To recap, the NDIS, introduced by the Gillard government and supported by all parties in parliament, is the biggest social policy reform since Medicare. It replaced the hotchpotch of federal and state government arrangements described by the Productivity Commission as “underfunded, unfair, fragmented and inefficient.” And it has made a real difference. According to Bruce Bonyhady, head of the Melbourne Disability Institute at Melbourne University and another architect of the NDIS, “it is a scheme that is doing extraordinarily positive things for hundreds of thousands of people with disabilities.” More than 50 per cent of participants were receiving no assistance at all before it started, he adds.

Given that, Walsh’s anger requires some explanation. A quadriplegic who was heading for a career as an astrophysicist before a football accident at the age of twenty, he spent decades working as an actuary on no-fault state government accident compensation schemes. Their underlying principle of social insurance informed the development of the NDIS.

The Productivity Commission proposed much more than a welfare program: people would be given control over their affairs, choosing the supports they needed to live more independently, find employment and generally lead fulfilling lives. Its insurance principles stemmed from the reality that the lottery of life meant that any Australian could face a disability, thus giving us all a stake in managing this risk through the tax system. Treating it as insurance also meant taking a lifetime approach, emphasising early intervention to save higher costs later, and increasing the opportunities, including employment, for people with disabilities and for their carers. In short, its benefits to the broader economy, as well as to individuals, would be substantial.

Walsh’s beef is that this vision has been lost. “I don’t think the NDIS has ever been implemented,” he says. “Perhaps 10 per cent of people are self-managing” — given control of a package of funding to pay for agreed supports — “which is the real opportunity for people to be doing what was intended by the scheme.”

Meanwhile, he says, 40 per cent of NDIS funding is provided for the 7 per cent of people who live in group homes under the Supported Independent Living program, which was transferred from state and territory governments. “Many participants in SIL continue to have little choice or control over their circumstances but nevertheless have 86 per cent of their committed supports — in excess of $300,000 per person per annum — consumed on their behalf,” he told the joint federal parliamentary committee on the NDIS.

A substantial part of the rest of the NDIS budget goes to medical therapy for children. “This has become a much larger part than it was ever designed to be,” he tells me, and the figures bear him out. Of the 468,692 people covered by the NDIS, 193,814 — more than four in ten — are younger than fifteen. Autism (at all ages, although mostly among children) accounts for 146,412 participants compared with the Productivity Commission’s original estimate of about 75,000. Another 53,264 fall into the category of developmental delay. With the NDIS estimated to grow another 30 per cent before it is fully operational, these figures will continue to increase.

“It is not difficult to get an autism diagnosis,” says Walsh. “It’s a spectrum and there are many children who have signs of being on the spectrum but don’t necessarily need an individual support package to go and see a therapist.” For those in the disability sector, this is a brave statement, guaranteed to bring the wrath of parents on his head. But others agree with him and are prepared to say so. “A large number of children are being diagnosed with autism who don’t actually have it,” paediatrician David Roberts, a former president of the WA branch of the Australian Medical Association, told Inside Story in 2017.

“Over the past ten years,” said Roberts, “I have run across cases in the hundreds where the diagnosis has been made but the assessment has been conducted improperly and where there have been conflicts of interest in the diagnosticians.” Roberts hasn’t changed his view, telling me the rate of diagnoses has increased in the last four years. For a parent with a child on the autism spectrum or with developmental delay, though, an NDIS plan with guaranteed funding is a godsend, given the few government-provided alternatives.

Despite its problems, Bonyhady describes the NDIS as “an oasis in the desert.” An estimated 4.5 million Australians have some form of disability. The scheme was designed to cater for a minority who need the most support, with the Productivity Commission outlining a comprehensive strategy for the remainder, including mainstream services and community support. But funding for most of the lower-level programs, provided mainly by the states, has been withdrawn, so it is hardly surprising that people are prepared to move heaven and earth to get into the NDIS.

This is where the elephant enters the room. According to the latest “financial sustainability” report by actuaries, the scheme will cost a projected $28.1 billion this financial year, which is some $4.4 billion above the Productivity Commission’s 2017 costing for this year. By 2024–25, the actuaries project a cost of almost $41 billion — $12.2 billion more than the commission’s estimate — and by 2029–30, $60.3 billion, or $22.2 billion higher. The main contributors to the escalation are more people than anticipated entering the scheme, fewer leaving and average payments increasing by 12.5 per cent a year.

If the figures look scary, at least to budget-minded people, that’s precisely what the government intended when it released the report a few days before this month’s meeting of state and federal ministers. The idea was to concentrate minds on the need to cut costs.

It didn’t work, with the states and territories rejecting independent assessments and demanding more information about the financial assumptions used. There was some justification for their scepticism. Bonyhady says that up to October last year the government and the administering agency, the NDIA, were saying that the cost projections were in line with the Productivity Commission’s estimates except for two factors not taken into account in its calculations — the subsequent broadening of the definition of developmental delay in children, and the costs of people over sixty-five. While this older age group is not eligible for NDIS assistance, those who reach that age when they are already in the scheme continue to be covered.

Bonyhady says that new estimates were incorporated in this year’s May budget, followed by the actuaries’ report showing further increases. “The numbers just don’t change that quickly. It is very clear that there are now very different assumptions being built into the estimates. These are very complicated calculations, with literally hundreds, if not thousands of assumptions that go into these cost projections. It is impossible to know what to make of these numbers until one sees the detailed models and data.”

The government has stonewalled attempts by Bonyhady and others to see this material. Following the latest ministerial meeting, Linda Reynolds, the federal minister for the NDIS, promised to respond to state and territory ministers’ requests for more information on the costings. Still, the reality is that warnings from the auditors about cost blowouts were made as long as five years ago but have been ignored.

Even if Reynolds ends up convincing the states and territories, the federal government has lost the main weapon in its armoury — independent assessments. Rather than the present system of doctors and other health professionals familiar with the person’s condition helping draw up individual funding plans, the government wanted an allied health professional, unknown to the person, to assess the support he or she needed. This would be done in a session of up to three hours, using a checklist meant to even the playing field of assistance people received. It would overcome the “empathy bias” said to be inflating the plans that participants receive.

Whatever logic applies to such a change, the disability sector quickly saw it as a threat — a cookie-cutter approach with the main aim of saving money. Bonyhady gave it the damning label of “robo-planning,” a reminder of the disastrous robodebt scheme that saw welfare recipients pursued for debts through a faulty computer program that routinely assessed debts where little or no money was owed. His point is that it relied on a single assessment at a preset time using a checklist, when we know that an accurate picture of disability can only be obtained by a multidisciplinary assessment taken in multiple settings.

Moreover, one of the guiding principles of the NDIS was supposed to be plans tailored to individuals and starting with their goals. “The intention was that people get packages and flexibility in the use of their packages,” says John Walsh. “That cannot happen [under the present system] unless we are prepared to wear the cost of the scheme escalating to $40 billion. I don’t think the government will do that in a hurry.” He points to the experience of injury compensation schemes in Australia and New Zealand, where entitlements without independent assessments threat-ened the sustainability of the schemes, leading ultimately to restrictions on eligibility and benefits.

Bruce Bonyhady argues that participants’ goals are “absolutely critical to the culture of the NDIS.” As he wrote in a submission to the NDIA, “The focus is, and must continue to be, on what people with disability can do and the support required to exercise their full citizenship rather than what they cannot do.”

There are indeed some unfortunate parallels with robodebt. The government has focused increasingly on cutting costs, but enough examples have emerged of the government misdirecting money — from misspent JobKeeper dollars to sports rorts and commuter car parks — to raise the hackles of people with disabilities.

As well, the government has taken a hard-nosed approach to complaints about unfair treatment, again reminiscent of how the government often took robodebt cases to the brink before conceding that the Administrative Appeals Tribunal was unlikely to find in its favour. According to the NDIA’S figures, of the 3721 AAT cases closed by the end of last year, 3641 had been resolved before the hearing. Often the resolution came after people had spent enormous amounts of time and money, says Bonyhady, and in the vast majority of cases the NDIA conceded.

“All of these settlements are subject to confidentiality so they don’t set a precedent,” says Bonyhady. “The NDIA pushes it all the way in the hope that individuals will give up and then, if people push it to the point where they get to the AAT hearing, they literally settle on the steps.” Of the eighty NDIS cases that did go to a hearing, the AAT found against the government in forty-two. Proposals within the government for expanded debt-recovery powers have more echoes of robodebt.

Whether or not the latest actuaries’ figures are anywhere near accurate, there should be no argument about governments funding the NDIS generously. As the Productivity Commission put it in its 2011 report, “were government to be starting with a blank slate in determining its funding priorities, there would be a strong rationale for provision of disability services to be one of its highest spending priorities.” Nor is the current federal government in a strong position to argue that it is spending our money wisely and with restraint.

Rather, the question is whether any government would be prepared to fund a continuing rapid increase given contending demands. In the wake of the royal commission findings, should the government spend less on aged care and more on the NDIS? These choices will have to be made, whether we like it or not.

By giving the states and territories an effective veto power over major decisions, the current structure includes a safeguard against drastic cuts. But the states also are responsible for stumping up almost half the funding for the NDIS, although the increase in their financial contribution is capped at 4 per cent a year, with the federal government obliged to pay for the rest.

The issue of escalating costs will confront Labor if it returns to government any time soon. Shadow disability minister Bill Shorten, who helped create the political momentum for the scheme when the party was last in government, casts doubt on the claims of funding blowouts but nevertheless concedes some cost overruns. He blames it on such things as the $288 million the NDIA spent on consultants and contract staff in 2019, and the $17 million for legal expenses to fight cases in the AAT. But that still leaves a funding gap of billions of dollars.

Meanwhile, Bruce Bonyhady has developed a detailed alternative to the now-abandoned independent assessments and offered to work with the government to implement it. People with disabilities would be given a genuine say in the process, and the starting point would be the goals of individuals. Any questionnaires used for assessments would be tested and feedback sought, and expert reports would be considered. The emphasis would be on multidisciplinary teams conducting assessments, if necessary in multiple settings. Participants would be able to use their funding more flexibly, with a minimum of fixed categories.

The government has yet to respond. •

The publication of this article was supported by a grant from the Judith Neilson Institute for Journalism and Ideas.