Introduction

1.1        The Australian Greens have concerns about the National Disability Insurance Scheme Savings Fund Special Account Bill 2016 (the bill).

1.2        While the Australian Greens are wholly supportive of a well-funded National Disability Insurance Scheme (NDIS), we do not want to see the most vulnerable in our society further disadvantaged through cuts to the Social Services portfolio to fund the NDIS. It is unacceptable to take from one group of vulnerable people to fund another group of vulnerable people and in this instance within a group of vulnerable people. The Government is trying to push through its agenda of cutting income support under the guise of funding the NDIS.

1.3        We question whether there is a need for this special account and we also have concerns about the discretion the bill provides to the Minister for Social Services (the Minister). The review into the operation of the special account, if established, needs to happen sooner.

The need for a special account

1.4        The majority committee report notes that the necessity for this special account was questioned in a number of submissions.

1.5        The Children and Young People with Disability Australia (CYDA) submission said:

Because the NDIS will support the realisation of Australia's human rights obligations, it is critical to recognise the Scheme as a core area of government spending. This was acknowledged by the Productivity Commission Inquiry into Disability Care and Support, which recommended that the "costs of supporting people with significant disability from year to year through the NDIS should be viewed as a core funding responsibility of government and met from claims on general government revenue."

The need for a 'special account' in addition to the DisabilityCare Australia Fund to hold funds for the NDIS is therefore unclear. It is CYDA's understanding that this is not a typical funding arrangement for other areas of government such as health or education. Current special accounts cover a broad range of policy area but are typically created for more specific programs.[1]

1.6        The Australian Greens are not convinced that this separate account is required. The funding for the NDIS should not be dependent on cuts in other areas of Government spending.

The Minister's level of discretion

1.7        Submitters and witnesses to the inquiry indicated concern about the level of discretion assigned to the Minister in managing the proposed special account. These concerns were touched on in the majority committee report.

1.8        The Australian Council of Social Service (ACOSS) said in its submission to the inquiry:

The Minister for Social Services will be solely responsible for policy and management of the fund, which gives greater control to the Commonwealth and removes independence from the management of part of the Scheme's funding base. This has rightly caused concern amongst the disability sector, as a core part of the NDIS is the independent management of Commonwealth and State government funds by the NDIA.[2]

1.9        Young People In Nursing Homes National Alliance said in its submission:

A related problem with the fund as described in the Bill is that it casts the NDIS as a program of the Minister rather than a truly independent scheme. The Bill thus makes the scheme vulnerable to the political ebb and flow future governments may confront. This is one of the key reasons the Productivity Commission recommended an insurance model that would be free of the budget related political tussles that plagued the old disability system[.][3]

1.10      As CYDA said in its submission:

The creation of the NDIS Savings Fund controlled by the Minister therefore substantially alters the existing arrangements regarding the role of the NDIA Board and the shared responsibility arrangements between the jurisdictions.[4]

1.11      The Australian Greens are concerned that if this bill is passed in its current form that the Commonwealth, and specifically the Minister, would have more control over the NDIS than was originally intended.

Recommendation 1

The Australian Greens recommend that if the bill proceeds that it be amended to allow additional oversight of the proposed special account by the Council of Australian Governments Disability Reform Council. 

Funding the special account

1.12      As mentioned in the majority committee report, the 2016–17 Federal Budget outlined $2.3 billion of savings which could be credited to the special account. Approximately $1.6 billion of the savings identified are to come from cuts to income support payments, if they pass the Parliament.[5]

1.13      One of the savings earmarked for the special account in the 2016–17 Federal Budget, specifically cutting the backdating of the Carers Allowance for new claims, passed the Parliament in the Budget Savings (Omnibus) Bill 2016.

1.14      As the Australian Council of Social Service (ACOSS) said in its submission to the inquiry:

A proportion of its funding will be derived from moving up to 90,000 Disability Support Pensioners from the Disability Support Pension (DSP) onto Newstart Allowance after subjecting them to medical reviews. ACOSS strongly opposes linking savings in the area of social security for people with a disability to funding of the NDIS, not least because it creates a false economy. Moving people from DSP onto Newstart will result in them losing $175 per week and plunge them into poverty.[6]

1.15      As PWdWA said in its submission:

Our biggest concern with this legislation is that it is focused on finding savings within the Social Services portfolio to put aside money for the NDIS. The explanatory memorandum clearly states in its first dot point that credits to the account will come from portfolio savings identified by the Minister for Social Services. It also clearly states that the sole responsibility for the policy and management of the account will be in the hands of the Minister for Social Services.[7]

1.16      While the view outlined in the majority committee report is that 'the proposed legislation does not reflect or establish a link between savings in any particular portfolio area and funding for the NDIS',[8] the Australian Greens disagree with this assertion and note that there is no mechanism in the legislation to prevent current proposed cuts or future proposed cuts from the Social Services portfolio being channelled into the account.

1.17      It also appears that there is no mechanism in the legislation to ensure future monies are taken from portfolios that earn money or are in surplus. As PWdWA said:

This special savings account seems to be trying to make the Social Services portfolio stay within some budgeted range without affecting other areas like increasing corporate taxation. This shows a callous disregard for the social safety net we have in Australia and a lack of understanding of the point of taxation to support our social safety net.[9]

1.18      Additionally, there is no explanation of what will happen if proposed savings earmarked for the fund are not passed by the Parliament. CYDA said:

This was the case in the amended Budget Savings (Omnibus) Act 2016, which maintained access to the Energy Supplement for new Newstart recipients. The lack of clarity around what processes are in place if identified savings are not passed again indicates that funding for the NDIS will be precarious.[10]

1.19      There is also concern that re-directing savings from within the NDIS is rash. Given there have been underspends in mental health packages, Community Mental Health Australia said in its submission:

... until there is a definitive understanding of and information available on why there has been an underspend, redirecting this funding elsewhere – as could occur through this Bill – from mental health to other areas would be premature and have potentially negative consequences. Any decision made on this must be informed by sound data, information and understanding. Otherwise stated, NDIS psychosocial disability related underspends must be quarantined and redirected for the benefit of increased understanding of the NDIS and mental health.[11]

1.20      The 'established and known government processes'[12] for making savings decisions and     the fact that the budget savings are pooled prior to being re-allocated do not adequately  address the concerns raised in the submissions to the inquiry.

1.21      The Australian Greens are deeply concerned that the Government's harsh agenda of continuously cutting income support can be furthered in the name of funding the NDIS. Taking money away from those who can least afford it to fund a scheme as necessary as the NDIS is harsh and unfair. The review of 90,000 DSP recipients over three years to top up funding for the NDIS is particularly cruel as a portion of these recipients are placed onto the lower Newstart payment and forced further into poverty as a consequence.

Recommendation 2

The Australian Greens recommend that if the bill proceeds it be amended to include strict guidelines on where future monies for the special account can come from. 

Review of the fund's operation

1.22      In its submission to the inquiry, ACOSS said:

The Bill provides for a review of the operation of the fund before 2027. Waiting for up to ten years before reviewing what appears to be a key part of the NDIS to ensure it complies with the NDIS Act is too long and could lead to perverse outcomes.[13]

1.23      The Australian Greens are concerned that the review into the operation of the special account could be put off for up to 10 years. There is a need for regular review and oversight to ensure that the special account, if established, is working as it should. If this bill is successful, the Australian Greens want to see the review of the fund undertaken within five years.

1.24      We are also concerned that there is no requirement for the review's report to be tabled in the Houses of Parliament or even published publicly.[14]

Recommendation 3

The Australian Greens recommend the bill be amended to provide the review of the operation of the special account take place before 2022, and that the report of the review be published and tabled in both Houses of Parliament. 

Recommendation 4

The Australian Greens do not support the bill in its current form. 

Senator Rachel Siewert

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