assessed: the National Commission of Audit's disability related recommendations - fail

The National Commission of Audit today released it recommendations (see http://www.ncoa.gov.au/report/phase-one/recommendations.html). The recommendation relevant to disability follow, with a short commentary.

Recommendation 16: The National Disability Insurance Scheme

The National Disability Insurance Scheme is a worthy scheme with widespread community support. The Commission recommends the Commonwealth continue to support the introduction of the National Disability Insurance Scheme, but that the scheme be implemented in a way which is fiscally sustainable by:

  1. pursuing a slower phasing in of the scheme recognising that this will require the re negotiation of bilateral agreements with the States;
  2. 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;
  3. exercising budget control to ensure long-term financial viability;
  4. 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
  5. simplifying reporting arrangements to ensure transparency in the cost and efficiency of the delivery of disability services between the States.

This recommendation, released on the same day as the NDIS's 3rd quarterly report (see http://www.ndis.gov.au/sites/default/files/documents/report_on_sustainab... or find the link on this page) that shows the NDIS is on track financially, implies that the NDIS is currently not "fiscally sustainable" or "financially viable" hence the Productivity Commission's assessment that the NDIS would lead to longer term savings is wrong. As yet, the NCoA has not explained why the Productivity Commission is wrong ... or the scale of its error.

The NCoA's recommendation for "pursuing a slower phasing in of the scheme" is an immoral call (from the comfort of large salaries and very comfortable accommodations) on the Government to deny for even longer essential service for our most vulnerable citizens. It is a call for increased long term cost to the community ... a recommendation that cannot be argued is itself financially responsible. This must be the result of a rushed and ill-informed process.

This recommendation implies that the Productivity Commission's NDIS design was not "fiscally sustainable" (or "financially viable") or that those who are implementing the NDIS are not doing it properly.

By referring to the not-for-profit sector as "informal", the NCoA annihilated its credibility on disability services. Check their track record: the authors of this recommendation represent the architects of the existing dysfunctional disability service and support sector ... the very systems that the NDIS needs to replace. Apparently the NCoA wants to protect/maintain their dysfunctional disability systems, their recommendation promotes persisting with abysmal outcomes and inequity for all those affected by disability. Given the context, one might assume the NCoA's use of "contracting arrangements" means reducing/contracting the size/scale of the nation's mostly (unprofitable?) disability services. This recommendation reflects the profound lack of understanding that the authors and their like have of disability systems and related economics.

This recommendation also implies/asserts that the people who are now implementing the NDIS are not doing it properly. The Audit Commissioners need to show that their criticism of the NDIS implementation is justified, and describe comprehensively how it can be improved.

We all know the NDIS is not, and will never be, perfect but this recommendation does nothing to improve it ... quite the opposite.

Recommendation 29: The Disability Support Pension

The Disability Support Pension provides support to those who are unable to work, or have limited capacity to work.

The Commission recommends the Disability Support Pension (DSP) be maintained as an essential part of Australia's social safety net but that changes be made to ensure it remains targeted to those in genuine need by:

  1. moving to gradually apply the new disability assessment and participation criteria, introduced in January 2012, to targeted groups of grandfathered Disability Support Pension recipients such as those under the age of 35 and those with some work capacity; and
  2. changing Disability Support Pension arrangements to align with the Commission's recommended changes to the Age Pension by:
    1. transitioning to a new benchmark of 28 per cent of Average Weekly Earnings at the same time as implementation of the Age Pension benchmark changes; and
    2. the Government considering when further changes should be made to the eligibility requirements for the Disability Support Pension, including replacing the current income and assets tests with a single comprehensive means test; including the value of the principal residence above thresholds of $750,000 for coupled pensioners and $500,000 for single pensioners in the new means test; and increasing the income test withdrawal (taper) rate from 50 per cent to 75 per cent.

It is highly desirable that people with a disability participate in the labour force and are employed, but simple-minded schemes to push people off the DSP into work are spectacularly misinformed. Most people with a disability are desperate to work; their motivation is not the problem. Employers are the problem ... and the lack of adequate/appropriate supports.

This NCoA recommendation calls on the Government to repeat the Howard and Gillard Governments' (failed) welfare-to-work schemes ... which did more to demoralise and vilify Australia's most vulnerable citizens than to get DSP recipients into employment.

In both cases, Government told the Australian community that around half the people who receive the Disability Support Pension are indolent bludgers and welfare cheats. But the schemes found fewer than 2% of people should have their welfare cut. Those schemes cannot be considered successful ... and it is extremely unlikely that doing the same again and expecting a different outcome can be judged sane. The Government was warned but chose to ignore the community (see http://a4.org.au/a4/node/779).

It is very clear that DSP recipients are not the problem. The problems are:

  • employers ... who are mostly ignorant of disability (lack knowledge or experience and display strong prejudice); mostly, they do not know and are disinterested in the benefits of including people with a disability in the workforce (see http://jobaccess.gov.au/content/Myths-about-disability); and
  • politicians who vilify the most vulnerable to boost their own popularity; they are not leaders ... they are not serving the country well.

Also, the NCoA's recommendation to increase the so called "taper", the tax on people with a disability who mostly live in poverty (Australia is the worst in the OECD), would mean the lowest paid workers in the country pay one of the nation's highest tax rates. That is a serious disincentive to work.

Rating: 1 out of 10 ... please justify why the NCoA should be allowed to say anything more about disability.

Conclusion

The Government continues to get advice from business lobbyists, "tame" ex-bureaucrats, and a former(?) politician ... none of whom have any demonstrated knowledge or understanding of matters relating to people with disability. Nor would it help to have an economist in the mix since economics has yet to develop credible economic models for disability in the community.

The NCoA's recommendations relating to disability need much more explanation before they should be taken seriously.