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NDIS underspend helps return budget to the brink of surplus

20 September 2019 at 5:22 pm
Luke Michael
The federal government spent $4.6 billion less on the National Disability Insurance Scheme than expected because of delays getting people into the program, new budget figures reveal.

Luke Michael | 20 September 2019 at 5:22 pm


NDIS underspend helps return budget to the brink of surplus
20 September 2019 at 5:22 pm

The federal government spent $4.6 billion less on the National Disability Insurance Scheme than expected because of delays getting people into the program, new budget figures reveal.

Treasurer Josh Frydenberg on Thursday announced the final budget outcome for 2018-19, showing a deficit of $690 million – $13.8 billion less than what the 2018 budget predicted.

This improved financial position ­– which leaves the budget on the brink of surplus for the first time since 2007-08 – was built on the back of underspending in areas including the NDIS.

The government says this underspend is a result of a slower than expected transition of people into the NDIS, but critics argue the money should be spent fixing various problems plaguing the scheme.  

Frydenberg said the NDIS was a “demand driven system”, meaning that a slower uptake of the scheme resulted in less money being spent.   

“This is in part because of the delays in some of the states coming on board, and also because it’s taken a bit more time for the service provider market to develop sufficiently to meet the available demand,” Frydenberg said.

Finance Minister Mathias Cormann assured people that “100 per cent of [NDIS] demand in the community will be met”.

“Essentially at any budget updates you’ve got movements up and down, you’ve got demand that is higher than expected and you have to pay more; sometimes you’ve got demand that is lower than expected,” Cormann said.

But Labor has attacked the underspend, with shadow NDIS minister Bill Shorten accusing the government of “short-changing” Australians with disability.

“It’s a national shame, it’s a disgrace. The fact of the matter is that the Morrison government is balancing its books on the backs of Australians with disabilities and their loved ones,” Shorten said.

“The money is meant to be there and getting out to the people… The reality is the demand is there.

“The reality is that in the last 10 weeks I’ve travelled all over Australia, it’s been a jaw dropping experience to realise that people are waiting 12 months, two years, for a wheelchair.”

An NDIS underspend has been a recent source of frustration for disability groups, after this year’s budget showed payments were expected to decrease by $1.6 billion in 2019-20 because of the slower than expected scheme uptake.

Advocates say any excess funds should be used to fix the scheme’s implementation problems rather than to fill a hole in the budget.

The NDIS rollout has been plagued by issues around participant plans, unrealistic pricing, providers struggling to enter the scheme and a poorly functioning IT system.

Thursday’s revelations were met with further anger from disability advocates on social media.   

Lobby group Every Australian Counts disagreed that the NDIS was a demand driven scheme.

“There are too many gates, hoops, loopholes, potholes, booby traps, dead-end mazes and endless miles of red tape for it ever to be considered ‘demand driven’,” the group said on Twitter.

Paralympian and disability advocate Dylan Alcott also slammed the underspend on Twitter.

“Pretty devastated to read today that [Australia] went into ‘budget surplus’ today due to $4.6b ‘saved’ on NDIS funding due to delays,” Alcott said.

“I see the heartbroken families of people who try and try to get funding but can’t, robbing them to be independent, contributing members of society. Fix it.”

Luke Michael  |  Journalist  |  @luke_michael96

Luke Michael is a journalist at Pro Bono News covering the social sector.

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  • Andrew says:

    So the budget for NDIS payments is $4.6 billion lower than expected and I am supposed to be happy about this? The reasons for lower utilisation of participant’s individual support packages are nothing to celebrate, they are the result of:
    • A cap on staff to review and make decisions
    • Participants waiting 12 months or more for support requests
    • Outsourcing of administration personnel
    • Participants being misinformed by incompetent Local Area Coordinators
    • Lack of information about available supports
    • Lack of services in regional areas
    • Plan reviews every 12 months where budgets are reduced if you have not used the supports
    • Phone appointments for participants instead of face to face
    • Being told that “someone” will ring you, when they never do
    • Incompetent staff at NDIA who know nothing about disability
    • Unacceptable waiting times when requesting a “review of a reviewable decision”
    • The list goes on
    I have been waiting over 24 months for a decision about a bathroom modification that would allow me to use a shower and wash myself properly. Until then, I continue to use a hand bowl and towel. Both my partner and I are at our wits end although I know other people on NDIS are suffering worse. When you realise the people in charge of the NDIS are the same mob that runs Centerlink (Department of Human Services), you can understand why. The NDIS system is broken and needs fixing instead of ripping money out of it to make themselves look good.

    • Peter Batini says:

      I am not certain why there is such surprise expressed at the current reported surplus in the National Disability Insurance Scheme, “ Minister defends $4.6 B surplus”, reported in the West Australian on 19 September 2019. The situation is entirely predictable.
      > In the previous financial year, the budget surplus was reported at $2.8 billion and for the 2018/19 financial year the surplus is now reported at $4.6 billion. The surplus for the 2019/20 financial year is projected to be about $5.0 billion. This surplus will continue to increase and peak at just under $6.0 billion at the end of the 2020/21 financial year.
      > The current surplus is the result of the poor implementation of the national scheme and the current low utilisation rate by people with disabilities is due to the highly bureaucratic processes. The utilisation rate will most likely stabilise towards the mid-point of the next decade with a consequent impact on the surplus. The population of the people with disabilities will continue to age and when combined with the mortality rate will result in a significant surplus in every budget into the foreseeable future.
      > Therefore, there will always be lots of cash in the system. Whether the cash is used for its original intention for the benefit of people with disabilities, or to support the service providers during the implementation phase, or to prop up the surplus in the federal budget is for the nation to decide. Perhaps a combination of all three strategies would be the ideal way to proceed. What a radical idea.

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