Submission 161 National Disability Insurance Agency (ndia) National Disability Insurance Scheme (ndis) Costs Commissioned study

Paying for the NDIS

Question 55

Does the current funding split between the Commonwealth and the States and Territories have implications for the scheme’s sustainability? Does it affect the NDIA’s capacity to deliver disability care to scheme participants at the lowest cost? Are there any changes that could be made to the funding split that would either improve the financial sustainability or the efficiency of the scheme?

The current funding mechanisms approach differs significantly from the arrangements proposed by the Productivity Commission and risks constraining the Scheme to a budget operated rather than insurance based approach. There is also evidence from trial of the complexity and length of time taken to resolve funding arrangements where estimates and cost shares agreed under the Bilaterals are incorrect. This has occurred in both SA and ACT where bilateral estimates and therefore projected cost contributions were premised on population estimates lower than those projected by the Scheme Actuary. The protracted negotiations of cost sharing for revised population estimates, and subsequent media attention, causes significant concern and distress in the community.

Question 56

What proportion of a state or territory’s contribution to the NDIS are in-kind services? Are there risks associated with in-kind service contributions?

The details of in-kind and total contributions agreed in bilateral agreements are:

	16/17		17/18		18/19		19/20
$M	S/T	Cth*	S/T	Cth	S/T	Cth	S/T	Cth
NSW in-kind	452.2	29.9	705.1	84.6
NSW total	1239.6	743.3	2410.5	2006.8
Vic	136.0	7.6	353.4	32.4	696.4	77.9
Vic total	306.6	242.4	917.4	700.6	2051.8	1568.7
QLD	7.4	3.6	42.1	17.8	104.1	55.0
QLD total	136.9	100.2	548.9	409.7	1543.3	1672.8
SA	16.0	1.1	22.565	9.4
SA total	51.1	135.6	265.3	294.3
TAS	16.3	1.1	24.4	3.2	44.4	6.6
TAS total	35.9	45.45	87.92	82.39	202.34	140.4
WA			55.4	26.9	93.7	24.0	148.7	33.9
WA total			363.4	267.9	599.1	445.9	1042.7	689.2
NT	Nil		Nil		Nil
NT total	7.7	12.7	33.1	46.4	81.5	122.3

*Note Commonwealth contributions include full cost of participants over 65 remaining within the NDIS

There are significant risks associated with in-kind service contributions. In-kind services have a distortionary impact on the market in terms of both price and innovation. Further, in-kind services, because they must be utilized first, have the effect of limiting choice and control for participants. Where in-kind supports are not yet best-practice there is the risk that they will not be effective in helping participants achieve the outcomes anticipated by the NDIS.