Commission Of Audit Targets NDIS

The long awaited Commission of Audit has recommended the slowdown of the National Disability Insurance Scheme roll-out along with many other major welfare changes in a bid to make multi-billion dollar savings.

Among its initial 64 recommendations the Commission calls for increasing the retirement age to 70, a $15 co-contribution fee for a doctor's visit, a means test on aged care funding and carers, abolishing the Family Tax Benefit Band and many other changes in a bid to make savings of between $20-$30 billion in the 2017-18.

The Commission of Audit report says the National Disability Insurance Scheme is a worthy scheme with widespread community support and recommends the Commonwealth continues to support its introduction but that the scheme be implemented in a way which is fiscally sustainable.

It calls on the Government to pursue a slower phasing in of the scheme saying that this will require the renegotiation of bilateral agreements with the States.

It said this could be done by:

1. amending governance arrangements to make the National Disability Insurance Agency a prescribed agency under the Financial Management and Accountability Act 1997, with the Chief Executive Officer directly accountable to the Minister;
2. exercising budget control to ensure long-term financial viability;
3. implementing contracting arrangements with the informal (not-for-profit) sector or other disability services bodies, including those operating in existing State schemes, to ensure contestability in the delivery of services to people with disabilities; and
4. simplifying reporting arrangements to ensure transparency in the cost and efficiency of the delivery of disability services between the States.

Commission chair Tony Shepherd said that without change the budget deficits would place a significant burden on future generations to bring the budget under control.

“The Commission recognises the unfairness of saddling today’s children with our debts. With an ageing population there will be fewer people of working age to look after the retired. They should not inherit our debt as well as the burden of looking after us,” Shepherd said.

“If we don’t fix the budget, Australia will have little or no buffer to meet future economic and financial shocks. History has shown that a strong budget is an essential foundation for a strong economy.

“The choices are to continue to believe in luck and hope that we can achieve past record levels of growth and productivity or hope that the global economy will recover or some other miracle will save the day.

“Or, we can accept the evidence. We can make the decision to move carefully, incrementally and fairly to put our fiscal policy back on its traditional sustainable path while our economy is still in reasonable shape. This will strengthen our fiscal position and give us the flexibility and reserves to future proof the economy,” he said.

Shepherd said the Commission was not asked to examine the revenue side of the budget.

“The Commission reviewed and recommended rationalisation of many of the 900 Commonwealth bodies. Similarly on grants programs it recommended far tighter controls and monitoring and assessment of outcomes,” he said.

“Governments should not make promises that cannot be afforded over the long-term. Households understand they must live within their means. Governments must do so too.

“There is a common purpose. We must all re-assess our expectations of government for the overall good. National interest and not special interest must prevail.”

In a joint release, Federal Treasurer Joe Hockey and Finance Minister Mathias Cormann said the Government could not keep spending more than it raised in revenue.

“That is why we asked the National Commission of Audit to identify opportunities for structural reforms to help ensure the Government can live within its means,” they said.

“Specifically, the National Commission of Audit was asked to provide advice on how best to ensure Government spending is as efficient and as well targeted as possible.

“The National Commission of Audit report is not a report by the Government but a report to the Government.

“It is one important input to the Government’s considerations for the upcoming Budget.

“While the Government will not be providing an immediate response to each recommendation, our response to the National Commission of Audit Report will be our first Budget on 13 May…

“We will continue to review and consider the recommendations and advice as we continue to pursue the necessary structural reforms of the Budget and Government spending programs.”

• Over the past 40 years government spending, adjusted for inflation, has increased from around $6,000 per person per year to over $15,000 per person today;

• Under the Commission’s ‘business as usual’ fiscal scenario Australia faces 16 consecutive years of budget deficits with net debt rising from $190 billion today to $440 billion by 2023-24;

• One of the major reasons is that Commonwealth spending will increase by $280 billion over the next 10 years with 70 per cent of this increase coming from the 15 largest programs;

• Spending on most of these programs will increase faster than the growth in the economy and faster than the Commonwealth receives taxes. Aged pension, aged care, health, education, child care and paid parental leave, overseas aid and disability are the fastest growing programs.

To view Phase One of the National Commission of Audit report and recommendations, click here.