Opening Address to National Disability Services’ CEO Conference
Hilton on the Park, Melbourne
8 December 2014
NDS’ ‘State of the Sector’ Report
Let’s get straight down to business. We do have today the release of the ‘State of the Sector’ report, which NDS has commissioned. It’s a good piece of work. I think it’s a helpful and a timely input. And I think it seeks to inject some constructive realism into the NDIS. We have previously had the review of the NDIS Agency, which you might remember had that analogy that likened it to a plane that took off before construction had been completed, with construction continuing mid-air. We now have the NDS ‘State of the Sector’ report, which likens the Scheme to a home renovation construction site of exposed pipes and raw nerves.
But it’s important to note that neither the assessment of the Agency’s capacity, nor this assessment of the sector more broadly, questions for one second the need for the NDIS. It doesn’t question for a second the direction that we’re heading in. And it doesn’t question for a second the commitment of all the players in the NDIS.
So Ken [Baker CEO, NDS], I welcome the report that you’ve commissioned. I do say it’s a helpful contribution and brings a realistic, constructive approach to the Scheme, because I think some of the commentary with the NDIS oscillates between the Pollyanna on the one hand, and the Chicken Little on the other. None of us are served governments, providers, participants, potential participants, carers none of us are served by anything other than a clear-eyed realism in relation to the Scheme.
Abbott Government Commitment
I think it’s worth again, at this time, highlighting that there is no lack of Government commitment to the Scheme. Highlighting again, that there will, at full rollout for the Scheme, be from state and federal governments a $22 billion per annum commitment. And about $11.6 billion of that, or 53%, will be a Commonwealth commitment.
And in what is a tough budgetary environment, there was the full commitment, in the last Budget, and over the forward estimates, to the NDIS. And indeed a bit of extra money went back into the Scheme by virtue of the fact that the previous government wanted to apply an efficiency dividend to package costs. We didn’t think that was reasonable, so we’ve put that additional money back into the Scheme. So there’s huge commitment on the part of governments.
But I do recognise the high level of frustration. There’s frustration for governments, there’s frustration for service providers with the sheer number of moving parts of the Scheme and the number of issues where policy has yet to be resolved. Obviously there’s frustration on the part of some participants particularly future participants, who are wondering when is the Scheme going to come to my area and why can’t the Scheme be switched on nationwide on a single day. We recognise this. You recognise this. But I know that together we are committed to seeing this through.
I thought I might just give a brief update at the outset as to the last quarterly results that we have. You may have seen them, but in case you haven’t, the last quarterly figures include an update on the new trial sites the ACT, the Barkly in the Northern Territory, and also the Perth Hills area in Western Australia which commenced on the first of July. And obviously these trial sites join those in the Hunter, the Barwon, South Australia and Tasmania.
The report shows that at the end of September this year, there were 8,880 people with disabilities in the Scheme, and thus far expenditure has been close on $400 million. Now clearly, there’s a way to go from about 9,000 people to 460,000 people, and from $400 million to $22 billion. But it’s a start.
The average package cost is just about bang on where it should be, and I know average package costs are not the only or the perfect measure, but they are a useful measure in terms of how the Scheme is tracking. And the average length of time for people from application to commencement of services has remained steady since the last quarter at 95 days. And importantly, satisfaction levels for participants are high particularly in Tasmania where the satisfaction rate in the trial site is about 98%.
I think it’s worth pausing, on occasion, to acknowledge and thank the hard working staff of the Agency. They are people for whom what they do is more than a job. They know that when they get up each day, they’re going to be making a contribution to improving someone’s quality of life. So it’s important to recognise, in compressed timeframes and in difficult circumstances, that Agency staff are working incredibly hard and have a tremendous commitment.
Friends, I don’t want you for a second to think that the Government doesn’t know how challenging this period is for providers. That for those of you who are in trial sites, you’ve got to provide the existing services as you move to a new way of doing things. And for those beyond the trial sites, you’ve got to plan for new services and new ways of doing things while you provide your current services.
And there are significant issues that are yet to be resolved. Housing has already been mentioned. That is important, because supported accommodation was at the heart of the rationale for the NDIS in the first place. Who is going to support and where are my family members going to live, who have a disability, when we’re no longer around to look after them. But it’s also important that we make sure, in working out what the model is for the NDIS contribution to supported accommodation, that that does not allow states to walk away from their prime responsibility for public and social housing. We have to make sure we get the interface right. It is being worked on. It’s one of the most challenging aspects of the Scheme, and I can understand the frustration while that is still being resolved.
Mental health is something that came into the concept of the Scheme later in the piece. The Productivity Commission’s interim report didn’t envisage a role for the Scheme with mental health. But the final report did. Mental health will be part of the NDIS, but again, the NDIS is not going to be the prime delivery mechanism for mental health support in the nation. So we need to make sure we make out the boundaries and the interfaces well for what are the ongoing state responsibilities, the Commonwealth responsibilities which has been a more recent feature of the health portfolio nationally, and what will be those areas that the NDIS is responsible for. Again, these are not straightforward things to work through, and I do appreciate the frustration of some providers while that happens.
Pricing, I take as read. And that’s something where the Agency and NDS are going to have to continue to work closely and hard together.
The interfaces more broadly between the Scheme and mainstream services again they’re being nutted out, and if not for the trial sites, that would be an even harder process. And again that comes back to the reason and the rationale and the purpose of the trial sites to work out some of these issues before we move to full national rollout. And I don’t think many providers here would want us to move to full national rollout until we’ve worked out the path in those areas.
And ADEs I’ll say a little more about those in a bit we are in transition in a policy sense.
And that raises when you have issues like some of the ones that I’ve just canvassed who is responsible? Is it the federal minister? Is it the state ministers? Is it the Disability Reform Council? Is it the Board of the Agency? Is it the management of the Agency? Or is it the Department of Social Services?
It’s fair to say that the governance arrangements that are there are not necessarily the most elegant. They’re not necessarily what you might come up with if you were starting with a blank sheet of paper today. So I think that is also a challenge in this transition phase, and we need to ensure greater clarity in terms of responsibility in these areas. And I seek your advice, as well, as to whether you think there needs to be any refurbishment in these arrangements.
Upcoming bilateral negotiations
But where the rubber is really going to hit the road over the next six months is in the bilateral negotiations between the Commonwealth and the states for transition to full Scheme. At the moment, we have very detailed bilateral arrangements bilateral agreements between the Commonwealth and jurisdictions for the trial sites. There are heads of agreements higher level intergovernmental agreements in relation to full Scheme which essentially have end dates.
What we will be doing over the next six months is working out how we get from where we are with the trial sites today to full rollout. Now the Commonwealth cannot dictate what full Scheme transition will look like. This is a shared venture of all Australian governments, which I think is sometimes a little lost in some of the commentary. This is a shared venture of all Australian governments. For better or for worse, the NDIS is a creation of COAG, ultimately answerable through a COAG Ministerial Council to COAG.
And each jurisdiction may want full Scheme rollout in their particular jurisdiction to look a little different. One jurisdiction might decide that they want to focus state-wide on waiting lists. Another jurisdiction may decide that they want to rollout by geographic area for all cohorts. Another jurisdiction may decide that they want to rollout on the basis of age cohorts state-wide. This is to be worked through, and this cannot be other than by negotiation between the Commonwealth and the jurisdictions.
We have six months in which we’ve got to do it, and the way that this will proceed is that the Department of Social Services, with the Department of Prime Minister and Cabinet, will be negotiating with the jurisdictions, with the NDIS Agency as technical advisers.
I think it’s important that we make sure that there is also the avenue and the opportunity for input, while these negotiations are taking place, for providers through NDS to be consulted, to provide a reality check as negotiators from central agencies and disability departments are talking to each other. So I’m keen to talk further with NDS about that.
That’s the challenge of the next six months. But I just want you to know that the issues that are on your mind have been heard. We are aware, and we do want to work with you through those. And recognising that in no way, when you raise these issues, is it reflecting on your commitment to the NDIS.
Australian Disability Enterprises (ADEs)
One of the other big challenges facing part of the sector has been Australian Disability Enterprises since there was the Federal Court decision of a few years back. As you know, there are some people who do not think ADEs should exist. I want to make it clear, as I’ve made it clear to you before, I am not one of them.
There has to be a continuum of employment opportunities for people with disability from supported employment through ADEs, through to open employment. There has to be an environment that is right for the individual.
I have been doing my darndest to try to provide as much certainty as I can in what is a difficult environment for ADEs. I supported the application to the Human Rights Commission for a three year exemption from the application of the Disability Discrimination Act to the BSWAT. The Human Rights Commission decided to give one year rather than three. That’s not ideal, but we will work through that.
In August I announced on the Gold Coast $173 million to help work up a new wage assessment tool, and to also provide support for ADEs in relation to transition costs.
And thirdly, I have been trying to legislate through the Senate the Business Services Wage Assessment Tool Payment Scheme. It was announced I think more than a year ago. And we have had some difficulty getting that Scheme through. The purpose of the BSWAT Payment Scheme is to provide a bit of certainty for people who were previously assessed under the BSWAT, and to provide some certainty for providers.
There is the representative action afoot, and we wanted to provide a simple, straightforward and guaranteed arrangement that would provide an alternative for people to this. Representative actions can go for years, with no guarantee of the outcome. The Payment Scheme that we want to legislate would guarantee payment for people who had previously been assessed under the BSWAT.
There has been difficulty getting that through. And you know I am not one who looks for partisan opportunity in this portfolio, and I’m not doing so now. But it is very disappointing that the Opposition voted against setting up the Business Services Wage Assessment Tool Payment Scheme. Their rationale for doing so was that they thought that people should be able to take part in both the representative action and the legislated Payment Scheme. And that if someone, subsequent to receiving payment through the Payment Scheme, was successful in the representative action, that the government should then seek to clawback money from those people so that they were effectively not double-dipping.
I don’t think people should double-dip, which is why with our Payment Scheme you would have the option of the Payment Scheme or the representative action. But I don’t think it’s real world to expect that in five years’ time, if the representative action was successful it’s not realistic for government to seek to recoup money from vulnerable individuals five years down the track. I just don’t think that’s fair, I don’t think it’s reasonable and I’m not going to have a bar of it. And I am going to be putting up again my proposal for the Business Services Wage Assessment Tool payment arrangements.
This needs to be established, but I just want to make clear to you the reason why it has not come to pass. I am determined to put that back into the Senate. Some of the crossbenchers supported us, some didn’t. Those crossbenchers who didn’t I think are just endeavouring to avail themselves of more information. But certainly for the Opposition, they know this area well, I think they should have supported the Scheme so that it could have been up and running today.
Just a little bit more on ADEs. You’ll recall when I was in Opposition, I indicated that I had some issues with the ADE Performance Indicators. Those Indicators which were voluntary, supposedly, but they were in the contract. There was uncertainty as to what their real status was. I think you, like me, believe that something is either in a contract or it’s not. I asked the Department to take a look at that. The Department came back, having commissioned some advice, and the consultants said that all is well. I’m still not convinced, so I’ve asked the Department to go away and look at this area again, because there is no doubt that some of the Performance Indicators for ADEs are not real world for particular operations. And there needs to be clarity as to whether something is really in the contract and needs to be observed, or if it doesn’t. So I’ll come back to you on that.
Another area of concern for ADEs obviously is future funding arrangements as we seek to transition to the NDIS, to what is a more competitive environment. I want to say to you, rest assured that no decision has been taken as yet about transitional arrangements. Rest assured, I am fully aware of the special circumstances of ADEs and the particular challenges ADEs are facing at the moment. And while there is some work we may want to do with you, I can tell you that we are not going to be undertaking a wholesale tender of ADE operations.
Friends, I wanted to spend a bit of time on ADEs, a bit longer than I might usually in this forum, because of the number of challenges facing ADEs at the moment. So I hope that I’ve been able to give you a little more certainty in terms of the future, in terms of what we might look to do in the transition to the NDIS, and also what we are seeking to do in relation to the issue of the Business Services Wage Assessment Tool.
Thank you so much again for having me here today. It’s more than a pleasure, it’s a real honour to be able to work with you on the issues before us and to seek to deliver a better deal for Australians with disability. Thank you again for your commitment. Thank you again for your passion. And I know as I said of the staff of the NDIS Agency, that for them what they do is more than a job I know that for all of you as well what you do is more than a job.
Thanks very much.