Minister Shorten interview on ABC Afternoon Briefing with Greg Jennett


GREG JENNETT, HOST ABC AFTERNOON BRIEFING: As we mentioned at the beginning of our coverage, NDIS participants are making contact expressing some misgivings about savings on that budget, a budget which currently runs at above $44 billion a year. NDIS Minister Bill Shorten joins us now. Minister, thanks for coming back. I know it's been hectic between the great hall, the parliament itself and now upstairs here to the press gallery. That you're seeking to contain growth in NDIS costs isn't any real surprise. After all, you struck a deal with the States in conjunction with your review. But that limit on growth doesn't start, does it, until 2026. And you've got $5.8 billion in savings in just the next two years before we get to 2026. Participants follow this. Some seem surprised by what's been plugged into last night's budget. Explain to them what practical changes lie ahead as you pursue those cumulative savings over four years of $14.4 billion.

BILL SHORTEN, MINISTER FOR THE NDIS, AND GOVERNMENT SERVICES: Two practical changes, but just let me put a little bit of context to reassure participants. The Scheme 's here to stay under Labor. We want to make sure every dollar gets through to the participants for whom the Scheme  was designed. We've also said for the last two years, we want it to be sustainable for future generations. The Scheme  is growing at nearly 20%. That's just not realistic. Now, I think a lot of that, the very high part of that growth rate is due to overcharging under service, not a focus on outcomes. We believe with two practical changes, we can head towards growth at 8% rather than nearly 20%. Something's got to be done. The do nothing option is not an option. So, two practical changes. One, at the moment we're seeing an outbreak of intraplan inflation. I'm sorry, the NDIS has more jargon than-

JENNETT: - you can explain that-

SHORTEN: - than a moonshot. But intraplan inflation means that you get a plan for a period of time, say, for twelve months. What's happening is some participants are being encouraged to spend all their money within four or five months. And then there's an automatic top up. That's not on. What we - Some plans do need to change and be increased because perhaps the electric wheelchair is broken or the initial plan didn't assess the needs properly. But this sort of automatic top up, which is being fuelled by an element of the planning industry saying “spend your money and you'll just get more” that's got to stop automatically.

JENNETT: So, you are turning that off?

SHORTEN: The automatic assumption that if you spend all your money, you can just be topped up. That's just not realistic. It's not the way the world works and it doesn't serve the best interests of people with disability because it puts a premium on - So, we think that will-  we don't think, we've forecast that that will deliver significant improvements in the next four years starting from this next year.

JENNETT: That will…People will feel that from the 1st of July.

SHORTEN: Not really. When you think about it. If we're spending, we've budgeted and again, this is just a real short distance. We're saying it was $42 billion this year and we're saying it'll be $46 billion, billion dollars plus next year. That's not a cut of money. What we're saying is it shouldn't be $48 billion. Like there's a difference between a cut and just not spending as much.

JENNETT: Yeah, we're using the word carefully here. It's a saving against the most recent budget forecast.

SHORTEN: If growth's up here, we want growth to be here, but it'd still be well above the status quo.

JENNETT: All right, take us to the second element.

SHORTEN: The second change is a proposal made by the, the twelve month review we did into the whole Scheme . And what they say is that the way the Scheme had been constructed over the last number of years is its plans. People get an individual package, it's built bottom up. So, item by item. So, you might have a whole lot of items in your Scheme. And what that lead, that's leading to a focus on increasing the price of the inputs. What we want to do is hire trained assessors and we want to look at a person's total needs. And instead of constructing a plan brick by brick, we look at a person's overall needs and give them a budget. We estimate that's actually going to save money. I use a simple analogy. If you were building a house and the builder can charge you for every brick, every window sill, every tap, that's a pretty cumbersome way to work out your budget. Far better to sit down with the builder and say, this is the house we want. And the builder says, I think I can build it for this. If you. If you have a whole lot of ingredients from the bottom up, you just create a whole lot of extra opportunity to see cost blowouts.

JENNETT: Of the $14.4 billion in savings over four years can you describe to us the relative weight of measure one, which is cutting off intra plan inflation, and measure two that you just summarised for us there using the brick by brick analogy.

SHORTEN: 95% of our savings over the next four years will come from these two measures.

JENNETT: And the relative weight of each of them? Does intra plan inflation -

SHORTEN: Roughly, more than roughly two thirds of the savings of that of that number I just gave is intra plan inflation. One third will be by changing the way we set budgets to begin with.

JENNETT: Imagine you can't say that no one will be worse off under their plans because of these changes. Can you say that?

SHORTEN: These plans- if we did nothing, a person's plan could go up or down. So, no one can guarantee that there's never any change. That's not the way the Scheme works. But these plans will just stop artificial inflation. Where, I mean, the vast majority of service providers are excellent, but there are some service providers who are having a lend. We want to move the whole Scheme and this is what people with disability have told us to base it on outcomes for people, not the inputs, which of course then can be some people will just increase the price of.

JENNETT: Do you acknowledge a degree of surprise among participants here. So, associated with your bill and the review were promises for co design and for consultation. And yet these two measures you're describing to us today, Bill, do appear on our reckoning to have taken participants by surprise. How would they have known?

SHORTEN: Well, first of all, I understand why people with disability are anxious when there's any discussion of change, because whatever the imperfections of the NDIS, it's a lot better than what there was beforehand. So, I can understand as soon as people hear change, they don't hear the word change for them. They say, oh, what do I lose? The reality is that we're budgeting for the Scheme  to increase in expenditure, to increase in growth, to increase in numbers. But the Scheme is growing too quickly and there are features of the Scheme which are not helping people with disability or the taxpayer. I ask myself one question. Does our change help people with disability? Yes. Now, setting up the needs base, changing the way we do budget setting, that doesn't come in until we've done co design. What we're doing is just creating the legal basis to have the conversation about co design. So, that'll be done with co design. In terms of this automatic top up intraplan inflation, that's been something which has been forced on us by the fact that there are some people out there, service providers, saying to people, spend your money and we can just top it up. We just want to shut down a loophole before it becomes a giant gaping wound.

JENNETT: Does this mean that these $14.4 billion alone won't get you where you want to be, which is 8% growth in funding by 2026. You're running at 20. Is there more pain on the way for people, participants, or the Scheme  more broadly as you bridge that gap from 20 down to eight? This isn't going to get you there, is it?

SHORTEN: No. I love political journalism and you're asking obviously the right questions. But the first round of questions was that we're going too hard. And this question is, are you going hard enough? And that's, you know, that's. I'm a [inaudible].

JENNETT: Well, really, might you have to go harder again to meet your own goals?

SHORTEN: Well, we've got other reforms. We have other reforms, but in the-for these next few years, this is key stuff. We're also doing the crackdown on fraud. There was provisions in last night's budget to improve our scrutiny of people who are not doing the right thing. Unethical behaviour, illegal behaviour. So, that's there. We also said last night that we're going to develop with the states a system of foundational supports, that is, supports for people with disability who don't qualify to be on the NDIS but still need some support. That's all going to take time. This is the analogy I would use is remember those scenes of the big shipping tanker which was caught in the in the Suez Canal, and it took a lot of effort to sort of move it around a bit. That's what we're trying to do to the Scheme, just get it on track. As for how it affects individual participants, I'm absolutely committed. The Scheme is going to increase in numbers and we're increasing the investment in it. But I do think that it doesn't have to grow at 20%, I think that’s over the top and we need to bring it to a more reasonable growth level.

JENNETT: All right. And just to round out our understanding or appreciation of where these measures in last night's budget came from, where their genesis was, you do cite in the budget papers a review by the official actuary for the NDIS. That came forward, I think, in early December to you, and lo and behold, that found that you were running $14.4 billion. So, is what – you were running over by 14.4 billion - Is what's been published in this budget purely matching up against that number? As you get further estimates from the actuary, you may have to find more to match those.

SHORTEN: I think what's been driving some of the intraplan inflation, that's why I said people just seeking to top up is, I think some support coordinators- you know it’s the squirrel theory you know load up on the old acorns. And some plan managers who advise people in the Scheme have seen that we're fair to about reforming the Scheme. So, I think it's led to a premature rush for the exit to try and get a little bit more because people are worried that somehow they won't get that. I just say to people, we want to have a more accountable Scheme . The Scheme  is going to be ongoing. So, what we're seeing is a spike in this growth that was an unintended consequence as soon as you talk about reform, between when you start talking about it and when you can legislate it and do the co design, there are some people who say, oh, I better get as much as I can. Now, in case I don't, you know, it's a sort of squirrel theory for winter, load up on the old acorns. But we'll work it through with people. No one should be perturbed, because what this is doing is if we do nothing, as some perhaps in the extreme elements of the disability sector or some service providers say, the Scheme  will eventually not be there. So, we've got to do something to just make it a bit trimmer and. But we are, it's still demand driven, still focusing on people, and this is all being owned by the sector itself.

JENNETT: Understood, Bill Shorten, and we appreciate you fronting up to explain it. It is responsive to some audience feedback.

SHORTEN: I want to reassure participants. That's great. The more I can talk about it, the better.

JENNETT: Good on you. Bill Shorten, NDIS Minister joining us.