Communist Party of Australia

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Issue #1592      May 8, 2013

NDIS up and running

Vigilance required

The promise of the National Disability Insurance Scheme (NDIS) has raised the hopes and spirits of hundreds of thousands of desperate Australians. The announcement last week of an increase in the Medicare levy to partially fund the scheme was widely welcomed. It follows a commitment of $1 billion over four years announced in last year’s budget to support the first stage. The legislation was proclaimed on March 28.

Ageing parents, who care for an adult child twenty-four seven, stressed out over what will become of their child when they die, who need greater assistance during their lifetime, have hope. Younger people, with the necessary transport, training or other support see the prospect of entering the workforce. Others hope to be able to live independently, leave the home and play a part in the community. Some are desperate for respite or key equipment.

These are just some of the people who stand to benefit from the scheme.

There are so many needs and hopes to be met. There is an air of optimism and relief after decades of campaigning by disability organisations, carers and people with disability. At last there is recognition, legislation and now the promise of funding.

Opposition leader Tony Abbott was forced to support the legislation for the levy in the face of its popularity. But the political manoeuvring surrounding the announcement drew attention away from a number of unanswered and important questions, including funding sources, the eligibility criteria for cover under the scheme and why a there is a levy on personal income instead of from central revenue.

The irony of the apparent difficulty in funding the NDIS and the announcement in the same week of an increase in military spending in the Defence White Paper which was released last week, went unnoticed. The first is to improve and extend lives. The second further integrates Australia in the US war machine and future wars, which will only cost lives and leave more people with disabilities.


The Act renames the scheme as DisabilityCare and establishes an Agency to manage it and allocate funding. It will be responsible for the provision of support to people with disability, their families and carers. It does not include the provision of basic income such as the disability support pension.

The Act’s objectives include the provision of the necessary support for those eligible so as to “enable people with disability to exercise choice and control in the pursuit of their goals and the planning and delivery of their supports”; and to “promote the provision of high quality and innovative supports that enable people with disability to maximise independent lifestyles and full inclusion in the mainstream community.”

Participants will develop (with assistance as required) a personal, goal-based plan with the agency. They will be able to decide the type of care and support they receive and choose how they want to manage those supports.

The Act says they will be able to access assistance from local coordinators, should they wish, and early intervention therapies and supports will be offered where they will improve a person’s functioning or slow, or prevent, the progression of their disability over their lifetime.

The scheme has been developed in conjunction with the state and territory governments. So far NSW, Victoria, South Australia, Tasmania and the ACT have signed on. It is set to become fully operational by the financial year 2019-20.

The scheme is being phased in, as from July 1, 2013 with five launch sites:

  • 10,000 people in the Hunter region of NSW
  • 5,000 in the Barwon region of Victoria
  • 5,000 children (0-14 years) in South Australia
  • 1,000 aged 15-24 years in Tasmania
  • 5,000 in the ACT.


There are tight eligibility criteria. These exclude people over 65 years of age who will be expected to survive without additional support in the aged care system which is in crisis.

There are an estimated 992,000 people under the age of 65 with permanent disability who need assistance with mobility, self-care, communication and or cognition. Around 583,000 of these people are expected to qualify for the NDIS. Some will have an individual plan and funded package; others will just be referred to mainstream services and programs.

To be eligible, the impairment must be permanent or long-term episodic, result in a substantially reduced functional capacity to undertake activities of daily living, and have an impact on the individual’s participation in the community or employment.

The key question is the needs assessment process and how the severity of disability will be defined. Will the criteria be tightened to keep within budget? Will it deny people in need, as recent reforms to workers’ compensation have? Or to put it another way: will needs dictate the budget or will the budget dictate who receives support?

Cuts to fund scheme

The government estimates a total of $15 billion per annum is required when the NDIS becomes fully operational. The $7 billion already being spent will be diverted to the scheme. The states will contribute $2.6 billion of the remaining $8 billion.

The federal government expects to raise an additional $5.4 billion – $3.3 billion from the levy which commences on July 1, 2014 and $2.1 billion from what PM Gillard calls “long-term structural saves”.

There are suggestions that some of this will come out of the pockets of people with disability or from mental health. Just as universities were robbed to find additional dollars for state and private schools, one group of people with disability may go short to fund another.

The government has already tightened the eligibility requirements for the disability support pension (DSP), forcing many into the unemployment system without the support they require and there is speculation about further cuts to DSP eligibility or even reductions in the DSP for those under the NDIS.

State governments, already looking at cuts to TAFE, hospitals, public transport to fund Gonski education reforms, may use the NDIS to make even deeper cuts or as an excuse to privatise public assets such as buses, hospitals, etc.

It won’t take long, just a federal election out of the way, before the public are being sold the need for the GST to be increased. By then all the states will be on board, hanging out for the promise of more income. An Abbott government would not hesitate in extending the GST to cover presently excluded items such as education and health. Nor would it be shy about raising it to 15 percent or more.

Insurance model

The NDIS is a first step in a longer-term transition to an insurance scheme fully funded by personal contributions rather than through central government revenue. The NDIS was pushed for by the insurance industry and the model was developed by the neo-liberal Productivity Commission. (See Guardian #1517 & #1518, 07-09-2011 & 14-09-2011, “Disability insurance scheme falls short”.)

The levy is a tax increase on personal incomes, most of it to be paid by workers. It lets corporations off the hook. The same money and more could have been raised by reversing recent cuts to the taxation of company profits or by a genuine tax on super profits of the mining corporations, banks and other financial institutions.

Or as Greens Senator Rachel Siewert points out, “If we got rid of the flaws in the mining tax we could raise $26 billion. If we got rid of fossil fuel subsidies to the big miners, we could raise $13 billion.”

The government has many other options. It could cut military spending which would only eat into the profits of the military industrial complex. It could abolish the $5 billion plus a year private health insurance rebate, a subsidy to the private hospital system.

With measures like these there would be no excuse for such tight eligibility requirements or for an insurance scheme paid for out of the pockets of workers.

Pressure will need to be maintained to ensure that the scheme fulfils its promise to people with disability and a campaign needs to be waged for it to be adequately funded from central revenue with the corporate sector paying its share.   

Next article – Editorial – The coming storm

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