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Wednesday, 31 August 2016
Page: 104

Mr PORTER (PearceMinister for Social Services) (12:44): I move:

That the bill be now read a second time.

This bill will establish a new ongoing special account that will assist the Commonwealth to meet future financial commitments to the National Disability Insurance Scheme. The special account will be known as the National Disability Insurance Scheme Savings Fund Special Account and was, indeed, announced in the 2016-17 budget by the National Disability Insurance Scheme Savings Fund measure.

The National Disability Insurance Scheme (known as the NDIS) is one of the largest social and economic policy reforms in Australian history. The NDIS supports Australians who are born with, or acquire, a permanent and significant disability before the age of 65 to lead a more independent and inclusive life.

The NDIS provides this support by assisting people with disabilities to meet the costs associated with their conditions. Importantly, the scheme empowers people with disabilities to make their own decisions about how they are supported.

NDIS trials are well underway across Australia. At the completion of the trials at the end of June 2016, there were around 30,000 people with disability participating in the scheme. On 1 July 2016, the NDIS commenced its transition phase, beginning a large-scale, staggered expansion that will see it fully rolled out in every state and territory, with the exception at this stage of Western Australia. The target for that expansion is 30 June 2019.

By 2019-20, we estimate the NDIS will be supporting around 460,000 Australians with disability. At that time, the NDIS will be injecting $22 billion each year into the Australian economy.

The NDIS provides the support directly to each eligible person, rather than to a service provider to then deliver the required support. As a result, the NDIS will also change structurally the landscape of the disability sector. New opportunities will be created by empowering people with disability. A new source of demand will be created within the wider economy for disability support services. As the scheme grows, it will create a national market for care and support based on empowerment, choice and control—a market that drives innovation and creates greater efficiencies and effectiveness in service delivery.

The Productivity Commission concluded that, over time, the economic benefits of the NDIS will outweigh its costs and will add close to one per cent to GDP. The NDIS therefore is not merely good for people with disability, it is good for the Australian economy and it will drive jobs growth over the long term.

In 2019-20, the NDIS reaches 'full scheme'. At that point, there will be $22 billion worth of allocated funding. The Commonwealth's share of the total funding will be around $11.2 billion per year, commencing in that year 2019-20. At that time, eligible people with disability who are currently receiving support through Commonwealth and state disability programs will be receiving support through the NDIS.

The government is fully committed to properly, adequately and sustainably funding the NDIS. It is for these reasons that the government is bringing forward the National Disability Insurance Scheme Savings Fund Special Account. The special account will give a clear line-of-sight of the funding set aside by government for the NDIS.

It is critical that the Commonwealth manages its funding in a way that is transparent and quantifiable, and meets the Commonwealth's funding commitments to ensure the NDIS is fully funded.

The government is 100 per cent committed to delivering and funding the NDIS in full. We have supported the NDIS from day one and this special account demonstrates in clear terms that ongoing commitment.

In addition to this special account, the Commonwealth is redirecting existing disability-related spending and the DisabilityCare Australia Fund toward the cost of the NDIS full rollout. In 2019-20:

existing Commonwealth disability funding redirected to the NDIS is estimated to be $1.1 billion;

the Commonwealth share of the increase in the Medicare Levy through the DisabilityCare Australia Fund is estimated to be $3.9 billion; and

redirected funding, which is currently provided to the states for specialist disability services, is estimated to be $1.8 billion.

In total, the Commonwealth will direct $6.8 billion from these sources to the NDIS. Because of the failure of the previous Labor government to specifically set aside funding for the NDIS, this will leave a funding shortfall of $4.4 billion from full scheme rollout in 2019-20 onwards, which this government will meet.

While the Medicare levy is an important contribution to the NDIS, it only provides a portion of the Commonwealth's annual new contributions to the NDIS at full scheme.

It falls to this government to set aside the remainder, which equates to $4.4 billion funding shortfall in 2019-20, which shortfall grows quickly to over $5 billion in future years.

This special account is the mechanism for securing that funding shortfall. It is proof of the responsible and sustainable way that this government follows through on its NDIS promises.

The National Disability Insurance Scheme Savings Fund Special Account, which will be created by this bill, will be in the form of a special account. The special account will be administered by the Department of Social Services, with its funding sitting within the Consolidated Revenue Fund. This will ensure that savings deposited into the special account are not returned to the Consolidated Revenue Fund itself and effectively lost for NDIS purposes.

The special account will allow the government, over future budgets, to identify savings from existing programs and set aside those savings to assist in meeting the Commonwealth's future financial commitments to the NDIS. Effectively, the Commonwealth will, over successive years, put aside savings that are clearly identified, quantified and defined so that the annual funding gap from 2019-20 is met within existing funding.

By clearly identifying savings in the special account, it will provide an enduring response to the concerns raised by the disability sector in relation to how the government will fund the shortfall for the NDIS. The previous government had identified some savings to assist in meeting the funding requirements of the NDIS from 2019-20. However, what savings were made were not set aside to meet future NDIS costs and were effectively lost for NDIS purposes.

The special account provides a sustainable way to meet the funding gap from 2019-20 onwards that does not require borrowings for the NDIS that would need to be paid back by future generations.

This bill gives the Commonwealth the flexibility to identify savings from any portfolio, not merely the Social Services portfolio. That approach will ensure that many areas of government contribute to supporting people with disability.

There will be an upper limit on the balance of the special account—it will only hold enough money to fund the future value of the Commonwealth's NDIS commitment. Over the next few years, savings can accumulate in the special account to meet future funding commitments. From 2019-20, when the NDIS reaches full scheme, if the balance of the special account becomes greater than required, the excess will be returned to the Consolidated Revenue Fund.

Further, a review of the special account will be conducted in 2026-27.

Identification of savings to be deposited into the special account will be a decision of government. Those savings to be credited to the special account will be committed over a 10-year period. The quantum of individual savings will be consistent with the Budget Process Operational Rules. The Minister for Social Services will be the responsible minister, with responsibility for the policy and management of the special account.

The government will establish the special account with an opening balance of $343.7 million in 2016-17, from the Consolidated Revenue Fund and savings identified in the National Disability Insurance Scheme Savings Fund measure announced in the 2016-17 Budget.

The government will make further deposits into the special account over the coming financial years.

In bringing this bill forward to create the National Disability Insurance Scheme Savings Fund Special Account, the government is providing a robust and enduring solution to meeting the Commonwealth's funding commitments for the NDIS.

I commend the bill to the House.

Debate adjourned.