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Communist Party of Australia

We acknowledge the Sovereignty of the First Nations’ Peoples.

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Issue #1517      7 September 2011

Disability insurance scheme falls short

The reality for many people with long-term disabilities and their carers is a nightmare – lack of support services, inadequate income to purchase basic needs and little or no respite. The Productivity Commission’s (PC) proposals for a National Disability Insurance Scheme (NDIS) have raised the hopes of many. In its report, Disability Care and Support, the PC says an NDIS would give all Australians full coverage for the cost of long-term disability care and support.

“Cruel lottery”

As PM Julia Gillard points out about the present situation: “It’s under-funded and it’s fragmented … and access to services is a very cruel lottery: it depends on where you live; it depends on the kind of disability you have; and it depends on how you got that disability – a very cruel lottery with too many Australians missing out on the basic services that they need.” It also depends on your personal wealth, availability of family to care for you, and the generosity of other volunteers and charities.

No one could deny the need for a radical overhaul of the present system (or more accurately lack of a system). The provision of universal coverage for the costs associated with serious disability is long overdue and should be supported. The NDIS would no doubt be an improvement for many disabled and their carers, but is it up to the task?

As the saying goes, the devil is in the detail, and the details of the PC’s scheme unfortunately have all the hallmarks of a neo-liberal agenda. It is a market-based scheme, centred around “choice”, “efficient prices”, “competitive risks” for providers and “fee for service” (fee paid by the NDIS). It relies heavily on the for-profit private and non-government sectors.

Eligibility for payments is restricted to people with serious disabilities that are deemed permanent or likely to be permanent. According to the PC, around half of those currently on the disability support pension would qualify for access to its provisions.

The NDIS would pay for a wide range of products and services, including assistance with integration into the community and entry into the workforce.

The PC claims that changes to the present funding model will make the scheme more “person-centred” and “service-centred”. Block funding currently provided to centres and other service providers will be replaced by a fee-for-service model, with the NDIS paying a nationally determined “efficient price” for each service. To the extent that it provides for planning and development of individual packages according to needs, it is centred on the individual. But the funding model with its one-price-for-all is far more likely to result in a one-size-fits-all service. The fees are service-centred.

National Disability Insurance Agency

Overall responsibility for coordination of the system would be in the hands of a new bureaucracy, the National Disability Insurance Agency. Its responsibilities include:

  • determining “efficient prices” for services
  • assessing needs and determining individual plans and budgets
  • authorising funding of services and supports
  • central purchasing of some goods and services

There are strong parallels with the case-fix model being used in hospitals, where funding is set at an “efficient price” per procedure and “performance” is a measure of cost-cutting and speed of patient turnover.

The PC claims the NDIS will create a “greater incentive for employers to offer better wages and conditions”. But logic would suggest that private operators seeking to maximise profits would have an incentive to cut wages and conditions.

There will be new “disability support organisations” (DSOs) that offer people brokering, management and other services so that they can “exercise choice” in selecting service providers. DSOs will assemble free “packages” of “supports” from specialist and mainstream providers. (There is also an option to cash out the value of the package and for the disabled person or other responsible person to pay providers directly.)

Together with local area coordinators they will match specific people to community groups, such as Scouts or Rotary, that are receptive to the inclusion of people with disabilities.

There will be publicly available measures of performance of service providers. A model has still to be determined. It sounds a bit like the MySchool and MyHospital websites with crude, number-based measurements of performance.

Public sector jobs & wages threatened

The NDIS involves a federal takeover from the states in managing the disability system but states will have “the potential to continue as service providers – but on a competitively neutral basis with other providers.” (Emphasis added) There is no suggestion that the government should fund equal pay in the low paid non-government community sector to create a “level playing field” in wages and working conditions. Rather, it could result in a race to the bottom.

The future of unionised and higher paid public sector workers will largely hang on the level at which “efficient prices” are set. If they are not high enough (very cost-cutting likely), states will be under pressure to slash salaries and working conditions of its community sector employees to the level of those in the private-for-profit and charitable sectors. Or they will simply sack community workers and withdraw from the area.

The scheme looks set to open up new profit-generating opportunities for the large private operators. There are fears in the non-government sector that it could squeeze out the small community organisations. There are other suggestions that as lower-cost providers, they might play an increased role as the state withdraws.

The NDIS is in effect market-based and designed to create competition between providers. In the corporate sector, the disabled will be the losers as a consequence of the inherent conflict of interest between profits and quality of service. And, of course, for workers in the sector, there are all the resultant pressures on jobs, wages and working conditions.

The scheme cuts out at pension age (at present 65) with recipients having to transfer to whatever arrangements are in place under the government’s policy for aged care. (See Guardian No 1514, 17-08-2011 Dumping aged care as community service)

Some of the concepts put forward in the PC’s report are highly desirable and if properly implemented would bring about fundamental improvements, in particular the principle of universal coverage and free access to a broad range of valuable services and equipment.

Unfortunately, the market-based approach of the PC undermines these admirable aims. While the government rightly takes responsibility for funding, the main thrust of the NDIS is tragically to move away from government responsibility for the provision of services to the private and church sector – privatisation by stealth.

Part 2, the funding of the NDIS, government commitment and the role of the finance sector in its development.  

Next article – Time to end ABN workers being ripped off

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