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Joint Standing Committee on the National Disability Insurance Scheme
17/04/2018
Market readiness for provision of services under the National Disability Insurance Scheme

PRODONOVICH, Ms Caterina (Kitty), Chief Executive Officer, Regional Chambers of Commerce and Industry (WA)

[09:30]

CHAIR: Welcome. Thank you for appearing before the committee today. Can I ask you to make some opening remarks, if you would like to.

Ms Prodonovich : The Regional Chambers of Commerce and Industry of WA is a member-based not-for-profit organisation. Our members are all of the regional chambers of commerce and business associations in regional WA. We have 44 business associations or chambers as members, which represent about 9½ thousand regional businesses, and we cover the whole state outside the metro area—every town and community that you can think of. I'm here today to talk on behalf of those regional business communities. As you know, in a regional area, the business community becomes the whole community, so in regional towns and cities every issue is important to the business association, whatever it is. Plus, the people in those business communities are the people that are completely invested in a community—business owners and people that are involved in everything. They have a really good broad perspective of all the issues. That's why we're here.

CHAIR: Can you say something about your members' interface with the NDIS to date.

Ms Prodonovich : We've had some really valuable feedback from our members. They might be businesses, but they might also be service providers—most of our business associations have NFPs as members as well and they can be quite large employers in the area. There are some general concerns about the transition, if we're talking about market readiness. From the service providers' point of view, there are quite a few issues, but the overriding one has been the very poor communication from NDIS. People feel they really don't know what's going on, and these are people that are in the sector, so they're completely across it. Everyone talks about how, in theory, the concept of it is great, but not knowing all the details because of the poor communication and no-one really knowing when it's going to happen or how it's going to happen has meant there's a lot of confusion for the professionals in the sector.

The other thing that they're concerned about is the market readiness of service providers because they are unsure exactly how it's going to look and they're worried about the costing and the pricing. They are going to have to change their whole model—that's what the NDIS is. Those service providers are going to have to change to having a business model and a lot of them are grappling with that, especially their IT and internal systems. Having to implement a cloud based system that collects all the data and does all the functions that it needs to do and also talks to the national system—that's an issue because of the cost of compliance and the cost of burden. The other thing in regional WA, which is hard for people that haven't spent a lot of time here to understand, is that access to broadband and access to internet is terrible. We're asking people to use a cloud based system; we're asking families and individuals to use a portal and access it that way. In theory, it all makes sense—everyone agrees on that—but in regional WA we have big concerns about that. The other thing, if I can go on, is something that a couple of providers brought up: they're changing awards, from the state award to the federal award, at the same time as they're changing this, so it's adding further complication and the pressure that comes with change. There is also a concern about the way the payments are going to be made—having payments in arrears—and how those providers will sustain themselves and how they'll be able to carry that.

There have been some positive things I'd also like to bring up and not just sit here and talk about the negatives. We do think that there are opportunities for small business down the track. We've spoken to other service providers and we've seen in other states that there is confusion, but, for those entrepreneurial small businesses, there are opportunities for them to be providers. There will be new business opportunities that come out of this. Like with any change, we think the transition is a bit messy and not communicated well, but we think there will be opportunities for businesses.

In regional WA, our biggest concern is just the size of WA and the very small towns—remote communities are a whole other issue—and how they're going to get access to services. Individuals talk to me about having that local coordinator. I understand the three different levels that they can have, but they're worried that they're not going to have that local presence and that local person to talk to. Transport costs have been brought up by every single person. Training—because it's not allowed for, where are we going to find the people from and how are we going to train them? If bigger national providers start delivering the service, the worry in those smaller communities is that they won't even service them. It's the market failure and thin markets that you've referred to in your reference points. That's probably a good place to start.

Senator BROCKMAN: In terms of the scope of market, does your membership extend everywhere outside Perth or is it particular areas?

Ms Prodonovich : For the Regional Chambers of Commerce, our members are the business associations themselves. We'll have the Kalgoorlie-Boulder Chamber of Commerce and Industry—I know you're going to Kalgoorlie tomorrow—and we'll have the Broome Chamber of Commerce and Industry. Our members are the actual bodies themselves, and then their members, so it's the whole of regional WA. We have—

Senator BROCKMAN: Are you hearing particular areas where you think things are more settled, where businesses are more comfortable with the transition, for example the larger centres like Bunbury or Albany? Do you feel that they are more—

Ms Prodonovich : No. We've spoken to a lot of service providers in Bunbury—and I do understand that their world is changing dramatically, so there's also concern about that, but they're saying, 'No-one really knows what's going on,' and this is in a big area like the South West, which has a big population and lots of connected communities, towns and cities. They're worried that they don't know what's happening, and they're going to lose staff. They're going to lose employees that they were able to have as part of the old funding. They won't be able to have them, so people will lose jobs. At the same time, in some communities, Kalgoorlie-Boulder for example, they're going through a massive skill shortage. The Kalgoorlie-Boulder chamber had an expo in Perth two weeks ago and they identified 800 to 1,000 jobs that they can't fill. They brought the businesses to Perth and set up speed-dating interviews and employed people on the day. I'm not saying that's happening all around the state, but there are some green shoots. I was in the Pilbara last weekend, and they're starting to see signs of it tightening. So, that's a bit of a worry—the skills market and access to finding people to do the work.

Senator BROCKMAN: What you're talking about there really is the transition of going from the current block funding arrangements to the provision of payments by individuals. They're worried about retaining service provision through that transition.

Ms Prodonovich : Yes. I think everyone agrees that, for a family or for individuals, having choice and control, which is what the NDIS is all about, is how it should be. I've spoken to people in eastern states that have said that, for a family, it can be so much better because they get a choice of the provider they want to use. They're not just locked into programs that are already going. That's the whole idea of the NDIS. But that also applies to someone that is relatively literate and computer literate and can navigate the system. In regional WA, I think we're going to see a whole lot of people that are going to struggle—families and individuals. They're going to be confused and stressed because they don't have an understanding of what they need to do. I think the transition has been messy.

Senator BROCKMAN: On the positive side of things, have you had members approach you seeking help to get ready and take advantage of the opportunities that are coming up? Have you been asked to act as a conduit to the NDIA and to try and—

Ms Prodonovich : No, we haven't, but we have actively said, 'We want to also hear the positive side and what opportunities there are.' I think, because people are still a bit unsure about the dates and what's happening, we haven't had a lot of that yet. But I'm sure other organisations have. We hadn't had an enormous amount of feedback about it at all until we went to them. We went to them seeking advice so we could come here prepared, but there wasn't an enormous amount. But, once we started speaking to people, we got a lot of feedback, as you can imagine.

Senator BROCKMAN: Interesting.

Ms HUSAR: I'll only make the comment that what we're hearing and what we've heard so far this morning is not that different from what we're hearing in other parts around workforce, the development of the workforce and the shortage of people.

Ms Prodonovich : And training.

Ms HUSAR: Training is a big one, as is that they're moving from the block funding model to the individual model, and that's had a lot of money to put back in. It's similar themes that we heard in Cairns.

Senator STEELE-JOHN: I'm wondering whether you can shed some light for me on something which I've observed, which is about the whole conversation about block funding versus funding in arrears and its relationship with choice and control. We often hear as a committee when we deal with this issue in WA that there was in some ways a preference for the WA based NDIS because of the different way that it approached its funding.

Ms Prodonovich : The local coordinator was a big part of that too. There were local coordinators that a family could go to.

CHAIR: The department earlier said that, previously, 20 per cent of the funding was block funding and about 80 per cent individualised in WA.

Ms Prodonovich : That's how it was before.

Senator STEELE-JOHN: So it's really that the problem is occurring in the 20 per cent that is going from block funding. It seems like the NDIS has been coming down the road for a while now as a project. Do you think that in some ways the sector has been slightly caught unawares even though it has been coming and was quite obvious for a while now that it was going to happen? Do you think maybe this tussle over state and federal kind of left everybody a bit confused and not sure how to develop themselves and adapt?

Ms Prodonovich : I don't think it was a tussle. Everyone's known it's been coming, but the communications have been so poor. The feedback we've got is that there hasn't been a clear, stepped-out plan. So they've all known its coming but not exactly when. They're trying to get ready and at the same time delivering and providing services. They're not just sitting there planning that and not actually doing all their work. Plus the change is a big change in their business model. It's going to a business model, and they have to change how they do everything. That's a big mind shift for people.

Senator STEELE-JOHN: It is. I've encountered that too, and I think that what sometimes doesn't get lost but makes this more difficult in WA—and I speak more as a person as a disability than as a politician when I say this—is that, because we conceive of ourselves in WA as having always done this really well and the rest of the country having done it, quite frankly, so poorly, we kind of forget that how we were doing it in WA still was not delivering for the people who have the services at the end of the day for the people with disabilities.

Ms Prodonovich : And that has been the feedback too. The current system has great strengths that they talk about, but they also have talked about the things they weren't able to achieve. Regional WA is difficult to service; we know that. But we get frustrated as an organisation when there's a national approach to something. We always feel that in those smaller regional communities they're the people that get penalised the most.

Senator STEELE-JOHN: They don't understand the geography. My observation is that it is an issue for both service providers in terms of the delivery of their services, and, on the other end, participants in terms of accessing those services. If a service, for instance, is in Mandurah, the reality is that you need to go to Bunbury to actually get that service, and there's not really a conceptualisation of the lack of public transport provisions.

Ms Prodonovich : And that's virtually metro to metro.

Senator STEELE-JOHN: Absolutely. That's the most metro part of WA.

Ms Prodonovich : If you're in Newman or you're in Tom Price—we had some feedback from the Wheatbelt saying there's now going to be two planners, and I think they're going to be based in Midland and maybe Merredin. The Wheatbelt is a region that has 44 shires: really spread out, tiny communities all the way through. How practically is that going to work, especially when transport and transport fees aren't included? That's been brought up a lot.

Senator STEELE-JOHN: I take you to the issue of the challenges of telecommunications in relation to the region. Could you go a bit deeper on the challenges that have been reported to you and how that is more uncertain as well?

Ms Prodonovich : Yes. Access to broadband and phone as well has probably been the No. 1 issue for our members forever, but in the last 10 years it's been a massive issue. If we're looking at a broader economic perspective, there are more and more solutions to delivering services in the regions that come via online accessibility. Whether it's health, education, disability services or businesses—we look at all the farming practices and how much they're doing via technology now—to people in regional WA more of those solutions will come via the internet. Everyone gets that, but, when you're actually in those places, reliable access to broadband—we're not even talking about costs, just reliable access—is totally inadequate. We know so many businesses in regional WA that set up offices in Perth just so they can download stuff and have access to broadband. If we're looking at an online capability to actually address health, education and disability services, the platform's not there. It's not cutting it.

Senator STEELE-JOHN: Absolutely.

If we've gone from a system where we have 80 per cent individualised funding and 20 per cent block to now transitioning to 100 per cent individualised, does it surprise you as a businessperson that that 20 per cent difference is causing not disarray but such concern? It almost seems like there is a third element here. You've got on paper 80-20, but in reality have you heard of any experiences where people felt like they could rely on a larger portion of their 80 per cent coming that way even though it was technically individualised funding?

Ms Prodonovich : No, I haven't heard that.

Senator STEELE-JOHN: It just seems surprising that a 20 per cent funding shift would cause the problems that it has. Do you know what I mean?

Ms Prodonovich : I think it's really been the poor communications. I know I've said it so many times, but the message we're getting over and over is that we've just not been told what is happening. Often, if there is a void of information, people will fill it with something. You know that. If there's not good, practical, relevant information, they'll fill it with something else.

CHAIR: It may also be that it's not simply the 80-20 ratio in isolation but the concomitant move from payment in advance to payment in arrears. Twenty per cent could be in addition to the payment in advance and therefore have a significant different in terms of the business plan of the organisation.

Ms Prodonovich : You're right. There is a concern that the smaller providers won't be able to keep going—

CHAIR: because of cash flow issues.

Ms Prodonovich : Yes. It's not to pay people, so they can't carry that or absorb it either.

Senator STEELE-JOHN: All right. That's all.

CHAIR: Thank you very much for coming along today and discussing with us. It's very useful to get that perspective of regional and more remote rural areas here in Western Australia.

Ms Prodonovich : And you're in Kalgoorlie tomorrow? Have a good day tomorrow.

CHAIR: We're in Kalgoorlie tomorrow, yes. I'm sure we'll get more of that perspective there.

Ms Prodonovich : You will. Thanks for having us along.

Proceedings suspended from 09:49 to 10:20