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A crackdown on prices and junk therapies will be part of a new federal effort to save billions of dollars on disability services and achieve a controversial target of 8 per cent spending growth without cuts to eligibility for Australians who need support.
The federal government wants to use its buying power to drive down prices from suppliers – such as by negotiating bulk discounts on wheelchair purchases – that are blamed in part for pushing up the cost of the $35 billion National Disability Insurance Scheme (NDIS), which is growing at almost 14 per cent a year.
NDIS Minister Bill Shorten further outlined the ideas he presented to the National Press Club last month.Credit: AAP
The reforms could allow the NDIS, which mainly funds individual support packages, to operate more like the Pharmaceutical Benefits Scheme (PBS) or Medicare Benefits Schedule (MBS), which have clearly outlined services and set prices.
NDIS Minister Bill Shorten outlined the plans in an exclusive interview that included a key assurance that he would not be changing the eligibility for the scheme as part of his plan to meet the long-term 8 per cent spending target, which he insists is not a cap.
The minister also said the state and territory governments were not being asked to spend anything more than already planned to expand the scheme, with no change to their annual spending growth of 4 per cent.
NDIS recipients expressed alarm at the new target when it was announced by Prime Minister Anthony Albanese after a national cabinet meeting on Friday as a measure to stop the scheme swelling to $97 billion in 2033.
Shorten held conference calls with disability groups on Monday and Tuesday to assure them he was not cutting the scheme, which is forecast to double in size to more than one million recipients within a decade.
“The reforms that we’ve identified don’t require eligibility changes, so that’s not part of this program,” he said.
“In terms of better provision of services, yes, that is – because we don’t want people being referred junk therapies, we don’t want people who’ve got packages for one purpose being oversold, or upsold to other services.
“We want to make sure people are getting outcomes for the dollars that are spent.”
As an example, Shorten said the Commonwealth should be negotiating cheaper bulk prices for wheelchairs, rather than each participant paying a retail rate.
He also said it was “the right idea” for the National Disability Insurance Agency to administer the NDIS more like the pharmaceutical and Medicare schemes.
“I think there are lessons in the PBS, MBS, where, when you go to see a doctor, you don’t get to get anything [you want]. You don’t get to self-prescribe drugs which are not on the list. I think the use of the best evidence is important,” he said.
Shorten did not specify the services he thought were failing the scheme’s “reasonable and necessary” test, but he has previously questioned whether sex work or tarot readings were services taxpayers should fund.
The Treasury outlook for the NDIS in the October budget assumed it would grow from $29.9 billion last financial year to $51.8 billion in the 2026 financial year and reach $97 billion in annual costs in 2033.
While it was originally intended to be funded 50:50 between Canberra and the states and territories, last year’s forecast showed the federal government would carry 80 per cent of the cost within a decade.
The forecasts assumed a 13.8 per cent increase in spending each year to June 2026, but the new target will aim to slow growth to 8 per cent a year over the subsequent years. This masthead reported last Friday that government documents show this would save $57 billion over the decade compared to business as usual.
Shorten said better support services in mainstream society – particularly in the mental health and education systems run by state governments – were also essential to bringing down the costs.
The most common primary disabilities of NDIS participants are autism (35 per cent), intellectual disability (17 per cent) and psychosocial disability caused by mental illness (10 per cent). Children are the fastest-growing group of participants, and one in 10 boys aged five to seven are now on the scheme.
“Part of the problem is that, as the scheme has gathered pace in the last nine years, states have folded a range of their services into the scheme as their form of contribution. But that has left some people stranded,” Shorten said.
“If the only option that psychologists or child paediatricians identify is a referral to the NDIS, then you will get referrals to the NDIS.”
While the original NDIS design said the scheme should provide “tier two” supports for an estimated 4 million people with a disability but without individual packages, it has not delivered on that promise.
Shorten suggested that should no longer be the remit of the NDIS. “Ideally, the states and mainstream departments … would fund these services,” he said.
However, asked if states and territories would be asked to pay the cost of the NDIS reforms, Shorten said: “not a cent”.
State and territory spending is forecast to increase by 4 per cent each year while federal outlays will grow much faster, ensuring the commonwealth funds a bigger share of the NDIS under the 8 per cent target.
The ACT Disability Minister Emma Davidson, a Greens MP, called the target a “heartbreaking” decision.
But Shorten said the policy emerged from national cabinet and that “her boss, the chief minister, signed up to it”.
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