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Disability funding is no charity – it’s an investment

Treasurer Joe Hockey warned earlier this week of a “massive blowout” in the National Disability Insurance Scheme (NDIS) if the system wasn’t made more efficient. This follows subtle re-positioning of the…

Everything provided under the NDIS already has to meet the test of being ‘reasonable and necessary’. Image from

Treasurer Joe Hockey warned earlier this week of a “massive blowout” in the National Disability Insurance Scheme (NDIS) if the system wasn’t made more efficient. This follows subtle re-positioning of the government’s stance on the NDIS since the election.

Tony Abbott referred to the scheme as a “trial” rather than a “launch” after the recent COAG meetings. And back in November, a key adviser to the government, the head of the Prime Minister’s Business Advisory Council Mr Maurice Newman, identified the NDIS as a “worthy cause”, but one which it was “reckless” to support in times of economic difficulty.

The “worthy cause” part of his speech is patronising, offensive and anachronistic; the “reckless” part is ill-informed and patently incorrect.

Aside from the fact that the NDIS is set up to provide only “reasonable and necessary” services, Hockey and Newman are missing the bigger picture: investment in disability support now will deliver savings later.

Cost shifting

It’s true that for years, people with disabilities and their families relied on charity to meet basic needs. Government support for disability was chronically underfunded and dysfunctional, resulting in huge inefficiencies.

Appropriate and essential equipment couldn’t be purchased in a timely or cost-efficient manner. And resources were wasted on finding band-aid solutions. As a result, underlying conditions would deteriorate, driving up later treatment and rehabilitation costs.

Cost shifting between the states and the Commonwealth meant one arm of government would avoid a small liability by creating a much larger liability for another arm. Keeping people in rehab hospitals or nursing homes to avoid paying for a bathroom renovation, for instance, costs taxpayers much more overall.

In the past, resources have been wasted on band-aid solutions. John Ott/ Flickr

A system in crisis meant families were often in crisis as well. Sometimes this manifested in families having to “abandon” their loved one with a disability; this is a tragedy for all concerned. Precious respite beds are then taken up for longer term care, creating another spiral of crisis.

There is nothing efficient about leaving people with disability and their families to spiral into crisis, when informal family carers continue to save taxpayers significant costs. People providing informal care are the most vulnerable group in the country, with the lowest levels of well-being and the most prone to poverty, marriage breakup and depression.

But they subsidise taxpayers to the tune of A$33 billion a year by providing informal care. The NDIS, when fully operational, will only reduce this figure by about A$7 billion.

If I was a treasurer concerned about saving money and managing liability, I’d be trying pretty hard not to break this particular golden goose.

Strong foundations

The talk of cost blowouts is ill-judged. Speaking from my experience at the Geelong (Victoria) launch site, the roll-out deliberately targeted people with the most need, who had been waiting longest, for the first plans. Of course the early stages would be more expensive; these early plans were breaking the drought for people with the highest level of unmet need.

In addition, this is a massive change brought in quickly, and systems are being streamlined all the time. To judge and make predictions on the cost of the scheme based on the first few months of implementation makes no sense at all.

I’m an economist. I believe in efficiency. But there was almost nothing about the old approach that was efficient.

NDIS trials are breaking the drought for people with the highest level of unmet need. Image from

The new system is based on insurance principles and contestable markets. Inefficient service providers who don’t meet client need will go out of business. Early investment in support, along with data collection and research in best practise, will build efficiencies and improve outcomes.

I want to pay less taxes too – so I want the government to invest in Australians with a disability so we can increase the number in employment, and reduce the number relying on welfare to survive.

Australia is close to the bottom of the table amongst comparable OECD countries for labour force participation of people with disabilities – and at the very bottom for poverty outcomes. A PwC report in 2011 estimated that increasing employment participation by people with disabilities could add A$50 billion, or 1.4% to GDP by 2050.

The NDIS makes cold, hard dollar sense. Thinking about it as some sort of welfare to be cut in bad times allows old-fashioned prejudice against people with disabilities to trump efficiency and money-saving investment.

Client-led planning

There is nothing about the principles behind the NDIS, the legislation or the rules that need to be made more efficient. Indeed, the very idea of enabling choice in the hands of the individual, along with contestable private markets, is a core liberal ideology.

The enabling bureaucracy must operate efficiently and effectively. To this end, my advice from a launch site is to avoid a tendency to over control the processes.

For example, insisting on additional “independent” assessment of equipment needs, over and above the advice of specialists already involved with the person, is an unnecessary duplication of process. And trying to tie families down six months in advance about whether a period of personal care will be provided before or after 8pm to allocate bureaucratic line items is a little overzealous.

Planning should be flexible and client-led with coordination available from an advocate of the client’s choice, then reviewed and approved by the National Disability Insurance Agency.

Only people with a significant and permanent disability are eligible for the NDIS. Image from

Inevitably there are teething issues, but these are being reviewed and worked through right now. The vision, embodied in the legislation and rules, is sound, efficient and cost-effective.

In no way should entitlements be capped, wound back or limited from what is intended in the legislation. After all, only people with significant and permanent disability are eligible – this is already a strict entry requirement.

Everything provided under the NDIS already has to meet the test that it is “reasonable and necessary”. It can’t be wound back without, by definition, denying those reasonable and necessary supports.

The NDIS was absent from the election campaign, neutralised by strongly articulated bi-partisan agreement. Hockey’s comments are not about efficiency and cost, they are about politics – and it is the intent behind the politicking that is worrying.

Join the conversation

13 Comments sorted by

  1. Jena Zelezny

    research for second PhD in Humanities and Social Sciences (Performance Studies/Theatre & Drama/Dramatic Literature/Visual Arts) at La Trobe University

    Thank you Elizabeth - a great article. i particularly appreciate your last two paragraphs. Neutralizing the NDIS does not protect or bracket off what is framed as bi-partisan agreement, it forces disability (in its many and complex forms) and its status as an important political issue, into invisibility.

    The country can and should support this legislation in full, as was intended.

  2. Natasha turnbull


    Even NIDS is an investment as the advocates claimed, the point is that it still needs to be an investment done in a smart way.

    Given a 33% cost blowout in NIDS trial sites since they were started only a few months ago, the government is right to be concerned and is right to take a prudent and targeted approach. Otherwise the public would become resentful. NIDS would be unsustainable for long term.

    Just look at Labor's shameful NBN - a cost blowout would be from $43 billion to $73 billion.

    1. Jena Zelezny

      research for second PhD in Humanities and Social Sciences (Performance Studies/Theatre & Drama/Dramatic Literature/Visual Arts) at La Trobe University

      In reply to Natasha turnbull

      NIDS is an investment in the potential of human beings. There is no cost structure rationalisation that will validate what constitutes a backdown or a cowardly reneging of the legislation.

      Howard poured money into sports so that there would be a few medals to display after the Sydney Olympics. Is this really a contribution to the nation? There are people, crippled by pain, who could contribute to science, humanities, education et al. Those people need and deserve assistance not dried bones from the table.

      The present government has the obligation to support the legislation.
      That the "public would become resentful" is wild speculation without basis.

    2. Jena Zelezny

      research for second PhD in Humanities and Social Sciences (Performance Studies/Theatre & Drama/Dramatic Literature/Visual Arts) at La Trobe University

      In reply to Natasha turnbull

      Furthermore, the integrity of this comments page obliges you, as a self-acclaimed 'student' to register your credentials.

    3. Suzy Gneist
      Suzy Gneist is a Friend of The Conversation.

      Multi-tasker at Graphic Design & Montville Coffee

      In reply to Natasha turnbull

      It's reasonable that a long neglected issue would attract a higher initial investment over an implementation period to improve the standard. This investment would most likely reduce over time as needs are met - why would 'the public' be resentful of this? The public includes carers and the disabled, you are making assumptions based on your view which most likely includes neither of these perspectives.

  3. Stephen Duckett
    Stephen Duckett is a Friend of The Conversation.

    Director, Health Program at Grattan Institute

    There are many reasons why the NDIS can be supported: an investment (as argued above and by the Productivity Commission), equity (compare the services of those injured in Victoria in a traffic accident vs falling off a ladder somewhere), and ethical (treating people with dignity). The existing legislation was passed with bi-partisan support and with an expectation about how many people would be eligible (some modifications from PC report but all this was clear upfront), and the expected cost of the…

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  4. Lorna Jarrett

    PhD, science educator and science advocate

    I'm confused. We DON'T need independent assessment of refugee health or climate change, but we DO need it for equipment needs of disabled people?

  5. R. Ambrose Raven


    Why do all these organisations have such difficulty recognising the evil and malevolent nature of many politicians, given their extensive experience? I appreciate they will have their share of hidebound party supporters who will white-ant anyone who seeks to challenge "their" Party, but that reality needs to be recognised so that the organisation as a whole can effectively fight for its legitimate needs.

    Unfortunately, the Abbott Government is one infused with Mad Hatter's Tea Party ideology and the virulent, malignant Thatcherism/Blairism. As with the unsubtle focus on "highly-paid" (i.e. unionised) workers as a barely veiled justification for destroying the car industry (which unlike the superannuation industry returns a lot more than it costs the taxpayer), such as Abbott, Hockey and Newman absolutely believe that the wealth of society is for those who own it (the 0.1%), not those who created it and deserve to share it.

  6. R. Ambrose Raven


    Governmental failure due to the distorted values of those at the top manifests itself in every field. Consider disability services. An ABC “The Drum” contributor wrote:
    “Just as we saw with the First Disability Services Act 1986, the name and conversations that led to it were held in high esteem and raised hope among those with disability all over Australia. The Government of the day moved after this point to introduce a number of recommendations and policies, including the CSTDA and Commonwealth…

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    1. Janeen Harris


      In reply to R. Ambrose Raven

      If disabled people handed a compact to both sides of government, the politicians would spend 6 months discussing it, at great tax payer expense, set up a commission to discuss it again, then file it away and do nothing. Cheaper by far just to give people the aides and equipment they need.

  7. Michael Gardner

    Advanced Trainee in Child and Adolescent Psychiatry

    The sort of ideology that leads to people viewing initiatives such as the NDIS as indulgences strike me as possessing similarities to those who complain about funding of public transportation, or profess anti-vaccination views on the basis that 'everyone else does it, so I don't have to'.

    The notion of 'user-pays' is seductive when one does not utilise services but quickly changes, in my experience, when the use of those services becomes desirable or essential to one's well-being. By then, it's a bit late.

    Thank you for bringing attention to the plight of the NDIS with this excellent piece.

    1. Natasha Layton

      Occupational Therapist

      In reply to Michael Gardner

      The following comments come from myself, as someone who specializes in assistive technology (equipment), and Lynne Foreman, a proud member of Every Australian Counts, and the first participant to go through the planning process at the Barwon NDIS launch site. Pre NDIS (in 2010) Lynne's life was one where she 'gave up having washes to go out' (Ref:Equipping Inclusion Studies 2010: Melbourne, Deakin University). Now with an individualised package, Lynne can shower every day, get to hydrotherapy, run…

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  8. Paul Prociv

    ex medical academic; botanical engineer at University of Queensland

    Ultimately, we all have to pay for disability support, be it through rates and taxes, insurance premiums, or simply the extra funding demand on immediate carers. However, with the present unwieldy system, based on litigation aimed at finding someone to blame, a huge and totally avoidable cost component is that of lawyer and court expenses which, in the end, seem otherwise pointless. If New Zealand can get around this, why can’t we?