House debates

Tuesday, 3 May 2016


National Disability Insurance Scheme Savings Fund Special Account Bill 2016; Second Reading

12:33 pm

Photo of Jenny MacklinJenny Macklin (Jagajaga, Australian Labor Party, Shadow Minister for Families and Payments) Share this | | Hansard source

I am speaking today on the National Disability Insurance Scheme Savings Fund Special Account Bill 2016. This bill establishes a new savings fund sitting within consolidated revenue, which the government claims is needed to help the Commonwealth meet its funding obligations for the National Disability Insurance Scheme.

There are a number of concerns and unanswered questions with regard to this legislation, which is why Labor will seek to refer the bill to the Senate Community Affairs Legislation Committee for further scrutiny. Labor will not oppose this legislation in the House, in order to promptly facilitate a Senate inquiry. Let us immediately dispense with the delusion that this legislation is about the National Disability Insurance Scheme. It is not about the NDIS. It is all about politics. It is not about funding the NDIS, because Labor has already funded it.

I am sorry to say that this legislation has a much more cynical purpose. This is a smokescreen, an alibi for the cruel cuts that this government has planned in tonight's budget and beyond. The entire case for this legislation rests on the assumption that the Commonwealth has not made the necessary budget decisions to fund the National Disability Insurance Scheme. This is a fib, a falsehood, a fallacy. It is a tired piece of propaganda repeated time and again by those opposite, particularly by the Minister for Social Services and the Treasurer. I intend to go through what is, in fact, the truth.

The former Labor government's 2013 budget set out a 10-year funding plan for the National Disability Insurance Scheme. This included but was not limited to an increase in the Medicare levy. A number of other budget measures were proposed and legislated, and these funds currently sit in consolidated revenue. Together, these measures show that the National Disability Insurance Scheme is funded. Despite their serial dishonesty, deep down, those opposite must know that the NDIS is funded. How could that be?

It is because each and every one of them voted for these budget measures. That is right. The members of the coalition—National and Liberal—sat side-by-side with Labor MPs to legislate all but one of these savings measures. The coalition supported all but one measure proposed by Labor—in fact, some of the legislation giving effect to these measures passed the parliament after the last election, once the coalition had formed government. In opposition, as in government, the coalition supported budget measures specifically intended to fund the National Disability Insurance Scheme.

The figures underpinning these budget measures were, of course, developed by the Treasury—led at the time by the widely respected Martin Parkinson, now the secretary of the Prime Minister's department—and yet the government now claims the scheme is unfunded. If coalition members really did not support the legislative measures identified in the 2013 budget to fund the scheme, why did they vote for them? If the funding from these measures is no longer directed towards funding the National Disability Insurance Scheme, where is it being directed? If the government truly believes the NDIS is unfunded, why has it signed bilateral agreements with state governments committing to the full rollout and the full funding of the National Disability Insurance Scheme?

I am very sorry to say that the answer to these questions is: politics, pure and simple. This government, which proclaims bipartisan support for the NDIS, is more than happy to use the scheme as a pretext for more budget cuts. In his speech introducing this bill, and in a crass attempt to rewrite history, the Minister for Social Services claimed that these measures were 'effectively lost for the purposes of the NDIS'. I have never heard such a pathetic excuse. Seriously, minister, you have lost the money! That is your excuse. This is not a set of car keys; this is billions of dollars specifically intended for people with disability. You cannot just lose it.

Then again, this is the minister who, as state Treasurer, was responsible for a fiscal drive-by on the people of Western Australia. He was the Treasurer of Western Australia during the height of the mining boom, but he left that state with a budget that is now more than $3 billion in deficit, so maybe it is the case that he is actually incompetent. If anyone could misplace billions of dollars, it seems it is the former Treasurer of Western Australia, who is now the Minister for Social Services here. But, of course, the truth is: this government did not lose it. This is not incompetence; it actually is thievery. They did not lose it; they are stealing it. This money is in consolidated revenue. It is there to fund the National Disability Insurance Scheme, as intended, but the government is choosing not to. It is an effective theft of funds that are meant for people with disability.

Another ridiculous argument put forward by the minister is this idea that if savings measures are not locked away in a special account they are 'washed away'. Where on earth they would be washed away to is impossible to know. We are only now just beginning to understand how this minister could possibly have stuffed up the Western Australian economy so badly. He seems to have no idea how budgets work. Has the minister, in fact, set up a special account for his family tax benefit cuts which are supposedly meant to fund the government's phantom childcare package? Of course he has not. He seems to just be making it up as he goes along.

I have recently written to the minister asking him to explain this legislation and its myriad inconsistencies. I have asked him to explain what the government has done with the funding from the legislated budget measures, which were supported by coalition members of parliament. I have asked him to explain why there is a need for another special account specifically for the NDIS when one already exists. There already is the DisabilityCare Australia Fund, which the Medicare levy increase funding has been put into. I have asked the minister to clarify if this legislation allows the minister to arbitrarily take funding out of the special account to spend on purposes other than the NDIS. Unsurprisingly, I am still to get a response.

The minister either cannot or will not provide these answers. Therefore, Labor will seek to refer this legislation to a Senate inquiry, because we are determined to get the answers that this minister so far refuses to give. Of course, the government has not bothered to speak to people with disability about this legislation. I have not heard of a single organisation that has been consulted on the bill. They, too, have valid concerns—concerns that this minister has not listened to, because he has not even bothered to ask. An inquiry will allow for proper scrutiny of this bill and will give people with disability and their advocates the opportunity to provide feedback. As I said, Labor will not oppose the bill in this chamber. We do want to see a Senate inquiry conducted as soon as possible. We want answers to all these questions, and it is only in a Senate inquiry that we might have some chance to get them.

But make no mistake whatsoever: the premise for this legislation—that the National Disability Insurance Scheme is unfunded—is wrong. This legislation is just the opening salvo in the coalition's latest attack on the NDIS. The next barrage that we can expect to see will come tonight. No doubt it will be another budget full of broken promises, skewed priorities and cruel cuts. This is the most shameful aspect of the government's approach to the National Disability Insurance Scheme. They are prepared to hold the NDIS to ransom in order to secure more cuts in other areas. That is what they are going to try to do tonight. They will tell another group of Australians that they have to be hurt in order to provide support to people with disability, and they will tell people with disability that they can only be supported if other Australians are hurting, pitting one group of people against another. It is unforgiveable. We saw it in the last budget and we expect to see it again tonight.

I said at the beginning of these remarks that this legislation is not about the National Disability Insurance Scheme. It is not; it really is about fear. I am very sorry to say that this government wants to frighten people with disability and their families and carers by telling them that the National Disability Insurance Scheme is not funded. This coalition government seems to want to say to people with disability that they should fear the future. This government is deliberately and maliciously shrouding the NDIS in uncertainty—and that is disgraceful. It is the lowest use of high office that I can recall. It is a disgraceful way to treat people with disability, who have waited all their lives for this transformational scheme.

The Liberals like to say that the National Disability Insurance Scheme is above politics—and it should be. But why do they insist on constantly trying to tear it down? Are their minds too narrow or their hearts too small to see the fundamental good in this reform? Are they so willing to tear it down just because they did not build it? I say to the minister and to the government: no matter what you throw up tonight, no matter what other attacks you have planned for the National Disability Insurance Scheme, people with disability know that Labor will always stand with them. We built the National Disability Insurance Scheme, and we will never, ever let you destroy it.

12:46 pm

Photo of Jane PrenticeJane Prentice (Ryan, Liberal Party) Share this | | Hansard source

The National Disability Insurance Scheme Savings Fund Special Account Bill 2016 is the second of two bills designed to improve the governance and funding arrangements for the National Disability Insurance Scheme. If ever there were an example of why we need this bill, of why we need to quarantine funds for the NDIS, it would be the words of the previous speaker, the member for Jagajaga. It was the party opposite and the member for Jagajaga this morning who said that $19 billion was a rounding error. These are the people who do not think that to quarantine money for the NDIS is sound fiscal management.

I can assure the member for Jagajaga that I have been consulting with the sector. I have been meeting stakeholders and mentioning this bill, and I can assure her that they are delighted that the coalition government is not only determined to quarantine this money but determined to ensure the success and future financial viability of the National Disability Insurance Scheme. That is how we are doing it. Through this legislation, we can quarantine the money set aside and any additional savings so that future governments know that that money is there, that the people in the scheme, the most vulnerable in our community, know that they are protected into the future from potentially incompetent Labor managers and that that money is set aside to secure their future.

This bill is further acknowledgement of the importance that the government places on the success of the NDIS and in recognition of the fact that its financial stability is crucial to its future success. The government takes its financial responsibilities for the NDIS very seriously. This bill is testament to the government's determination and commitment to establishing a sound basis for funding of the NDIS. We do not need a Senate inquiry to tell us that. Those with disability, their carers and the individuals and organisations involved in the provision of services within the disability sector depend on adequate funding for the NDIS. Indeed, one of the key questions that is regularly raised with me—as I said, I have been moving around Australia, talking to stakeholder groups—relates to funding arrangements for the NDIS and whether those arrangements will meet the needs of those with disability, particularly as demands on the scheme increase. It is obvious that no scheme, however worthy its objectives, will succeed unless it is adequately funded and those funds are secure.

Accordingly, the government is acutely aware of the need to establish a sound basis upon which the NDIS can be financed. As commitments under the scheme increase, there must be a concurrent increase in the funds available to finance the scheme. At the same time, with the possible exception of the federal opposition, few people remain followers of the magic pudding theory of economic management—that is, the more you spend the more you have left over to keep spending. The economic principles are fairly simple, and I remain puzzled that those opposite still seem unable to come to grips with the simplest of concepts. Money can only come from three places: increased taxes, increased borrowings or savings. Recognition of this and of the critical importance of adequately funding the NDIS is central to the objectives of this bill.

This bill will establish a new ongoing special account, known as the Disability Insurance Scheme Savings Fund Special Account. Over the next 10 years, the fund will be able to receive credits which will be available to fund the continuing operations of the NDIS. This vehicle will allow for money to be quarantined so that the Commonwealth government will have an additional secure source of funds to be directed towards the NDIS. It is not a revolutionary concept, because the Howard government established the Future Fund with the initial objective of financing the superannuation obligations of Commonwealth public servants. What is critical is that it provides a secure mechanism by which funds can be preserved for the benefit of the NDIS.

What continues to appal me, however, is the economic vandalism that drives the opposition. Their single-minded determination to make a political point irrespective of the facts never ceases to amaze me. On 19 April this year, the Leader of the Opposition claimed and, indeed, the member for Jagajaga said it previously:

… the NDIS, the National Disability Insurance Scheme was properly funded when Labor left office and what we did is we increased the Medicare levy.

The truth is that the NDIS was not properly funded when Labor left office in 2013. Any savings Labor claims were to be directed to the NDIS were simply returned to consolidated revenue. They were not set aside to fund the NDIS, which is what we propose to do. Labor did not put those funds aside. Indeed, they re-spent them several times. It is for this reason that the coalition government is required to find an additional $5 billion. We think that is a lot of money. Clearly, those opposite think that $19 billion is a small rounding error. We believe that $5 billion is a significant amount of money that we need to find and quarantine for the successful future of NDIS. Whatever Labor might choose to believe, whatever smoke and mirrors they use, you cannot spend the same dollar twice. You cannot direct the same dollar towards disability funding if it has already been used to help build a surplus.

As I have indicated, the growth of the NDIS and the growth in demands on its resources over time will be the greatest challenge the scheme faces. The level of certainty that a fund of this nature provides will be crucial in maintaining public faith in the capacity of the scheme to fulfil the expectations of those who will be its beneficiaries. At the same time, this government would be derelict in its duty if it failed to maximise the possible sources of revenue for the scheme. We acknowledge the significant financial commitment required for the scheme to reach its maximum potential.

I am delighted to support this bill. It is a significant move towards establishing a stable financial base for the NDIS, which, as I have indicated, is one of the most important social reforms that Australia has seen for many years. I am particularly pleased that the fund will draw from underspends from the NDIS and other portfolio savings. This will mean that money originally intended to be spent on the sector will remain within it and not be lost to some unrelated endeavour. I believe that this is an effective way of rewarding the efforts that are made to find savings in the first place. This bill deserves the support of the House, and I look forward to its passing so that the foundations for a sound financial future of the National Disability Insurance Scheme can be laid.

12:54 pm

Photo of Lisa ChestersLisa Chesters (Bendigo, Australian Labor Party) Share this | | Hansard source

I rise to echo the comments that have been made on this side of the House and by the member for Jagajaga. We all remember the photo when this legislation was introduced into the previous parliament. I was not here then, but I can remember watching it as it was broadcast live around Australia. It was stark and really demonstrated how genuine people in the Liberal and National parties are about this legislation. For all of their protests that this policy—the establishment of the NDIS—is bipartisan and that they support it, they were not there the day it was tabled in parliament. Every Labor MP was here and a lot of the crossbenchers were here, but not one coalition member was here on that historic day to talk to, to listen to and to celebrate with the families after the legislation was introduced.

Picking up on what the previous speaker said—that it is unnecessary for this to go to a Senate inquiry: if you are so sure of the figures and your argument then you have nothing to fear, and a Senate inquiry will just validate the claims that you have made. But given the concerns that have been raised and the fact that there is such a contradiction between the previous parliament and this parliament it is right that the National Disability Insurance Scheme Savings Fund Special Account Bill 2016 should go to a Senate inquiry so that these questions can be asked and settled.

A 10-year funding plan for the NDIS was set out in the 2013 budget. Regardless of what this government is trying to do to change history, it was set up and included a five per cent increase to the Medicare levy. So, yes, Australians did have an increase in the Medicare levy, and that was supported. I can remember talking to people on the ground who were more than happy to pay an increased Medicare levy. The government seems to think that people fear paying a Medicare levy—that it is a great big tax. People in our community support a well-funded Medicare system. They supported, wholeheartedly, increasing the Medicare levy to fund the NDIS—which was known, back then, as DisabilityCare—because so many people in our community know someone with a disability, have a disability themselves or care for someone with a disability and understand the impact this change—this system—will have on their lives.

Also set out in that 10-year funding plan were several other budget measures to fully fund the scheme. As the member for Jagajaga pointed out, coalition members should remember this because they all voted for the single measures. Perhaps that is the problem: they did not turn up for the debate so they did not realise what they were voting for. Perhaps it was one of those moments where, as it was a Labor government measure that was put forward and because they were not there in the chamber to hear the speeches, they did not understand that they had actually voted for a plan to fund it.

People in our community are sceptical about this government, and they want this inquiry to go ahead. They have a right to be sceptical because of the way this government has taken the hammer and the axe to Medicare and because of the way in which this government has cut billions of dollars from our health system. It is no wonder that people are sceptical about this government's claims when it comes to funding the NDIS.

It is also the form of this government. They are not hiding who they are. When Medicare was first introduced many decades ago—back when it was Medibank—the coalition of the day opposed it. Then, when they were in government, they did everything they could to slow down the rollout of Medicare. Since they were elected we have seen further funding cuts in their 2014 budget, in their 2015 budget and in their MYEFO. They have tried several times to push through a GP tax. They have tried to use different tactics to cut and change how Medicare works.

So we will not take the minister's word for it when he says that there needs to be a change in how we fund the NDIS. We want this legislation to be tested and for people with a disability, their carers and their organisations to be able to ask questions. This inquiry needs to be established to allow proper scrutiny of this bill. It will allow people with a disability and their advocates to provide feedback. This is complex policy, and everybody acknowledges that. So we need to allow people the chance to properly scrutinise this bill and provide their own comments. We need to make sure that the government listens to the concerns of people with a disability and their advocates. That is why it is important that we establish a Senate inquiry to look at this legislation.

There have been countless groups speaking up about the role and purpose of the NDIS and how it will fundamentally change the way disability services are delivered. But we are in a very critical stage of that. If we do not get the funding formula or the rollout right, we could end up with a system that is not true to the spirit of what we wanted. Quite frankly, not a lot of people trust this government and its ability to make sure that the NDIS lives up to expectations.

This is the most significant social form since Medicare. Currently, every state delivers disability care and support services differently. I was disappointed to hear yesterday some of the contributions in the debate around other measures in relation to the NDIS, criticising some states for working it through in a timely fashion. How disability support services are currently delivered in Queensland is entirely different to how they are delivered in Victoria. In my home state, currently it is a mix of block funding to non-government providers and the DHHS. These will be abolished and everybody will be on an individual funding package. Currently, some people in our state are on individual funding packages, and they all have mixed experiences of being on an individual support package. Some have said that it has been great. Others are struggling, particularly if they managing the package themselves in-house within the family, and they are looking for support. So there are lessons from Victoria's experience to help inform the rollout in our country. It is disappointing when you have people from the government get up, point the finger at their state governments and say 'You are slowing this down,' and, 'How dare you be playing politics?' I think that we need to allow the states the genuine space to negotiate and make sure there is a smooth transition. There are a lot of people that work in the disability sector. We need to be mindful and make sure that they are involved in this conversation, because we radically changing their workplace as well.

The new funding packages will be administered by the Commonwealth through the NDIA. From the launch sites, we know that, after a few minor issues to begin with, this is largely working well. There are lessons that we are learning. People in my part of the world are closely watching what is happening in the Barwon region in Victoria, because we are quite excited that we will be one of the first areas where the NDIS will be rolled out when it starts to be rolled out across the state. In my electorate, from 1 May next year, Greater Bendigo, Loddon, Macedon Ranges and Mount Alexander will receive the rollout, and people are excited to be in the transition phase.

The government are trying to hide how they fund the system and that is making people nervous. Now more than ever we need to be transparent. If the government are saying the money is not there, then what has happened to the money? Taxpayers, people who pay their Medicare levy, say, 'Hang on a minute; I have paid for this.' Is it the fact that we have a problem as not as many people are paying tax these days or that wages are going backwards so there is less growth in the Medicare levy because it relies upon wages? Well, be honest about that and tell us that. What is going on? Where has the money gone? This is why we need to have a Senate inquiry to look at this very factor. If the government did not have anything to hide, they would not fear this going to an inquiry so that stakeholders—whether they people are working in the sector, whether they are people with a disability or whether they are advocates—know exactly how the government are funding the system.

One of the other issues that has been raised in my area is making sure that we have a quality NDIS. With the new NDIS being market based at its heart, there is an issue of how the funding and basic price for services will be determined. Given the issues that we have in other sectors of our community when it comes to market based schemes, we need to make sure that we really test this to make sure that we do not undercut ourselves when the scheme begins. This obviously will have a major bearing on workforce remuneration, funding for training staff, the services and equipment that are provided, and the not-for-profit and government organisations in this space. The national body, the NDIA, has already established a basic price unit for services which is called the efficient price. Stakeholders across Australia believe that this price is currently set too low. These are the early stages where we are working to make sure that, across the sector, we have the system right. The price is based on the modern award, so therefore it does not take into account the different ranges of pay across our different states. It does not take into account simple things like penalty rates. One family member said to me: 'My son doesn't stop having a profound disability on a Saturday or a Sunday. He needs to have carers come in on a Saturday or a Sunday.' Another said, 'My daughter still needs assistance being washed on a Sunday.' These are some of the issues that are coming forward with this new scheme. It is a complex scheme.

We also have varying needs of the people with disabilities that will be covered by this scheme. The very nature of disability means there is diversity and that therefore different care, different equipment and different arrangements are needed. Some people thought this was just about making sure somebody had a wheelchair or a program. That is not true. There are a lot of people that work in this sector. We need to make sure that they are being consulted in this rollout. This is another area that I want to highlight in relation to making sure that we transition all of our disability support services across the country into a quality NDIS. To have a quality NDIS, we need to have a quality workforce and we need to make sure that we have a quality system in place that is open and transparent.

When in government Labor established the funding plan that was set out for 10 years to help with this transition so we could do it in a timely fashion to help those people in our community most in need. Australians have a right to be concerned if this minister is now saying the money has disappeared, given that they have already contributed towards the NDIS through an increased Medicare levy. The NDIS was designed, funded and introduced by Labor and it was being delivered on time and within the budget. Thousands of people across Australia have already had their lives transformed by the NDIS and we want to see that continue. We want to see the 3,400 people with a disability in my electorate have the same opportunity. But we need to make sure that the funding that was allocated continues to be there.

This comes back to priorities. Tonight we will learn a lot about the government's priorities in their budget. We already know that there will be a tax cut for the top end of town. That is about 15 per cent of my electorate, meaning 85 per cent of my electorate will not get a tax cut tonight. We already know where their priorities lie when it comes to taxes. We know where their priorities lie when it comes to the family tax benefit. We know where their priorities lie when it comes to Medicare. We need to know where their priorities are with the NDIS. Whilst we support this bill going through the House, it needs to go to a Senate inquiry so people with a disability and their advocates and carers can sit across from the government and the minister and question him and say: 'You committed. You sat with Labor. You voted with Labor when this was first introduced. Where is the money that is owed to the system?'

1:08 pm

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

It is a pleasure to stand to speak on the National Disability Insurance Scheme Savings Fund Special Account Bill 2016. Firstly, I come to this debate with a little bit of a vested interest. I have discussed this in other debates on the National Disability Insurance Scheme. I am not going to go over those issues again, but there is no-one in this House who wants more than me to see the National Disability Insurance Scheme fully funded and operational to give our kids, our teenagers and all people in our society who are afflicted with disability a better go. It is not only for those people but for their carers as well. I see the mental strain on carers of people with disabilities as one of the most difficult issues that we need to tackle in our society.

I was hoping that I could come into this chamber and that we could have this debate above politics. Unfortunately, we have seen the contributions from the Labor members—the member for Jagajaga and the member for Bendigo—dragging this debate down into a partisan political debate, which is very disappointing.

It may come as a surprise to the member for Bendigo, who gave a wonderful speech about how the NDIS was fully funded and how Labor, as the previous government, increased the Medicare levy by half a per cent. I do not think the member for Bendigo understood the finances of this. We know that when this is fully rolled out we will be giving extra care to 460,000 Australians under this scheme. The estimated cost is $22 billion. That is not a one-off hit; it is $22 billion every year. But the half a per cent increase in the Medicare levy that the member for Bendigo said this was going to be funded by raises only $3.3 billion. Only around 15 per cent is raised by the Medicare levy. This is just typical of what we see from the Labor Party. They come in here and try to lecture the coalition on finances and budgets and claiming that the Medicare levy funds the NDIS when we know it funds only 15 per cent.

We have seen more of that today and we saw it yesterday. We have seen the Gonski reforms that they were going to fund. That was all going to be funded by increases in the tobacco tax—that is what they said. We found out late yesterday that they have made a $19½ billion mistake. Do you know what they call it, Mr Deputy Speaker? 'A rounding error.' These are the people who want to come in here and give lecture the coalition government about how to fund this most important reform.

We have seen it before. Four years ago a Labor Treasurer sat in that seat. He stood up on budget night and he said:

The four years of surpluses I announce tonight are a powerful endorsement … of our policies.

He went on:

This budget delivers a surplus this coming year, on time … after that, strengthening over time.

…   …   …

The surplus years are here.

That is what they said. Now they come in here and have the hide to lecture us when it comes to the accounting of this scheme.

Let's go through some of the numbers to get to that $22 billion. There is existing disability funding which will be redirected to the NDIS, which is estimated at about $1.1 billion. On top of that, there will be a redirection of funding which is currently provided to the states for specialist disability services, and that is another $1.9 billion. That takes us to $3 billion. On top of that, we have the Medicare levy of $3.3 billion, so that takes us to $6 billion. We need $22 billion. Even assuming that the states come up with half of that, the Commonwealth needs another $5 billion worth of funding.

There are only a few ways that money can be raised. Contrary to what members that sit on the other side think, Mr Deputy Speaker, you cannot just turn the printing presses on and print money out. We cannot continue to borrow money. We are going on 10 years of budget deficits. We cannot continue. It is completely unsustainable. Somebody who is on $80,000 will pay about $625 this financial year in interest on the debt—that is on the interest only. In fact, if we did not have the debt that was run up through the reckless and wasteful spending of the previous Labor government, which blew billions of dollars on pink batts, wasted billions on overpriced school halls, had to spend extra billions on their failed water protection policies and sent $900 cheques out to all and sundry, including those who were deceased and those who were living in New Zealand, if we had not had that reckless fiscal financial management the interest that we are now paying on the debt could fund the NDIS in full. But we have that debt to pay. And we know that next year someone on average male full-time earnings will pay from their taxes $700, just on the interest on that debt. It will be more next year and more the year after.

We cannot fund the NDIS from borrowed money. We must fund it in a sustainable way, and there is only one way to do that. That way is from the taxes of the hardworking people, the wealth creators, of this nation. Yet what we see put forward by members of the Labor Party are policies that attack those very wealth creators that we expect to raise the money and the wealth of this country to pay for the NDIS. We want to see and we need more investment. But what do we see the Labor Party proposing? It is proposing a 50 per cent increase in capital gains tax. How will it encourage investment and wealth creation to increase the tax on capital gains by 50 per cent? It is often wrongly said that when people pay their capital gains tax they get a discount of 50 per cent. That is not correct. The previous Howard and Costello government changed the arrangements for capital gains tax where you did not make an adjustment for inflation, because you do not make any capital gains if that is all eaten away by inflation. We changed that in the previous Howard and Costello government. But increasing capital gains tax attacks the wealth creators.

We have seen also Labor's brilliant scheme to abolish negative gearing. It is an attack on investment and wealth creation also. It is not just housing on which they will abolish negative gearing; it is everything. Anyone who wants to start up a small business and take a risk—exactly what we want if we are to create wealth in this country—and suffers a loss would no longer be able to negatively gear that against wages and salaries. Yet if you are a wealthy investor and you have money from other investment income, you can negatively gear the losses from one business activity or one investment against your other investment income. So they are punishing the very middle class of this country who want to strive and create more wealth.

We saw Labor's attack on the middle class and the workers and the wealth creators with its Road Safety Remuneration Tribunal. What an outrageous scheme, to place those people who are not in a union at a competitive disadvantage to price them out of the market. What an outrage. We know that Labor plans to bring it back. If Labor gets back into office it is going to bring back the Road Safety Remuneration Tribunal, and the 30,000 truckies that are on our roads today are operating in fear that they will be sent to bankruptcy if this mob come to office.

Photo of Trent ZimmermanTrent Zimmerman (North Sydney, Liberal Party) Share this | | Hansard source

They don't care.

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

The member for North Sydney is 100 per cent correct. They do not care. It is all about being perceived to be doing good, not doing good. Then we have them wanting to bring back the wonderful carbon tax.

Photo of Stephen JonesStephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | | Hansard source

Mr Deputy Speaker, a point of order on relevance: as much as I am enjoying the journey of the member, at some point in time he is going to address the bill that is before the House. It beggars belief that any of the matters he has dealt with over the last five minutes go anywhere near the subject matter of the bill before the House.

Photo of Ian GoodenoughIan Goodenough (Moore, Liberal Party) Share this | | Hansard source

There is no point of order. Please continue.

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

The member for down the South Coast, the workers down the South Coast—

Photo of Stephen JonesStephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | | Hansard source


Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

that he represents—this bill is all about how we are going to fund the NDIS. Where is the money going to come from? You may think that you just have to turn the printing presses up or go out and sell more government bonds and put the future generations of this country into greater debt to finance things. That is not how the economy works. That is not how government works. I am going through the things they are proposing, the reasons why and the things that we need to do to create the wealth in this country needed to pay for the NDIS gap that we have, because the Medicare levy at the moment funds only $3.3 billion out of $22 billion.

They plan to bring back their carbon tax under the name of an ETS. That will put up the price of electricity. Higher electricity costs in this country means fewer jobs. It will destroy jobs in this country. It will destroy wealth. There will be pensioners who will struggle to pay their electricity bills in the winter because this mob over here want to put up electricity prices. That is their plan.

The other thing that will destroy wealth creation in this country is our inability to bring back the Building and Construction Commission. We need a construction industry in which people can invest their money and know they will not be victims of union thuggery and extortion. Yet what do we hear from the other side? We hear whinging, because we know that they are the mere puppets of the union movement. That is all they are. They want to do the bidding of the union movement. As the member for North Sydney said, they do not care.

Photo of Gai BrodtmannGai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | | Hansard source

Mr Deputy Speaker, I raise a point of order on relevance. What on earth does this have to do with the NDIS?

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

I am happy to take that interjection. Again, the member for Canberra simply fails to realise that we cannot fund the NDIS by printing money. We cannot fund the NDIS by firing up the printing presses or by borrowing more money. The way we have to fund this NDIS is through the wealth creators of this country. I am glad that you are here and I am glad that you are listening.

Photo of Stephen JonesStephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | | Hansard source

Mr Deputy Speaker, I rise on a point of order. There is a difference between a point of order and an interjection. The member for Canberra has raised a point of order, which you, as yet, have not ruled on. It is the same point of order that I have raised. He really is testing your patience, Mr Deputy Speaker. At some point in time he is going to have to address the bill before the House.

Photo of Ian GoodenoughIan Goodenough (Moore, Liberal Party) Share this | | Hansard source

Please continue, Member for Hughes, but please be relevant.

Photo of Trent ZimmermanTrent Zimmerman (North Sydney, Liberal Party) Share this | | Hansard source

On the point of order, Mr Deputy Speaker: he is being relevant because he is talking about the economic conditions that are going to be vital to be able to support a scheme like the NDIS. I think it is entirely in order for him to be talking about the government's economic strategy necessary for those preconditions.

Photo of Ian GoodenoughIan Goodenough (Moore, Liberal Party) Share this | | Hansard source

Please continue, Member for Hughes.

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

It simply shows how completely out of touch you guys are. You do not understand the basics—that the government itself does not have the money. The only way that we in this chamber get money to spend is through the wealth creation of the hard working people of Australia. You seem to think that there is some magic pudding out there that we can use to fund all this. We can have all the goodwill we want in the world, but it is the wealth creators of this nation who will create the funds— (Time expired)

1:24 pm

Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | | Hansard source

I rise to add my voice in support of the National Disability Insurance Scheme Savings Funds Special Account Bill 2016. I want to start off by picking up on a point that the member for Hughes made. We had the member for Jagajaga in here yesterday talking, predicting and being a clairvoyant. Today we have had her out at the doors talking about rounding errors. She is putting her accounting expertise out there for everyone to see. I have to say: nowhere have I ever seen $19 billion referred to as a rounding error. That puts us in the position where we have the Labor Party lecturing us on how we should fund things, and they cannot even get a rounding error definition correct. I think $19 billion for a rounding error is just horrific.

During my preparations for this speech I came across—as I am sure others in this House have—the National Commission of Audit report into the National Disability Insurance Scheme. This document, which dates back to 2014, makes some points about the uncertainties and financial pitfalls associated with the NDIS that are very relevant to this debate. Under the heading 'Drivers', the report states:

The Commonwealth’s contribution to the NDIS is expected to escalate rapidly in the forward estimates as the number of clients covered increases with the expansion of the scheme. There is some uncertainty over the actual number of clients, since the NDIS is effectively a demand driven programme. Initial estimates were based on the PC Report, but there is the potential for actual numbers to be higher. In particular, it is possible that eligibility within the broad mental health disability area may be much higher than forecast.

Around half the people currently eligible for the Disability Support Pension are likely to be in the NDIS. This suggests that there are likely to be many people who attempt to test their eligibility for the NDIS.

The report continues:

Care and support costs account for over 90 per cent of the total costs of the NDIS. Any difference between the actual and estimated average package costs will have significant financial impacts. Care and support costs are expected to be highly volatile in the early stages.

Data from the first quarter of the NDIS shows that average package costs are well above the original forecast ($46,000 compared to $35,000) … However, given the early stages of implementation it is difficult to read too much into these early estimates. It may be the case that package costs have so far been tailored to people with greater disability and therefore higher needs.

The report then goes into an examination of issues around the NDIS. It says:

The NDIS is a new scheme with associated uncertainty associated around costs and participant numbers. Most of the financial risk associated with this uncertainty will be borne by the Commonwealth. Under agreements with the States and Territories, the Commonwealth will meet 100 per cent of cost overruns during the launch and transition stages and at least 75 per cent, and up to 100 per cent, in the full scheme.

The initial roll-out of the NDIS includes both a launch and a transition phase. During this latter component, scheme numbers are forecast to increase from just over 30,000 in 2015-16 to over 450,000 in 2018-19 ... This represents a significant scaling up of operations, which poses a number of risks, including for the capacity of the new agency. It also increases the likelihood of any workforce pressures being amplified, thus potentially leading to wage pressures within the scheme. These pressures are likely to be exacerbated by increased demand for staff with similar skills in other areas such as aged care.

Next, the report moves into uncertainties around the extent of demand that the NDIS will generate. The report says:

Around 90 per cent of NDIS costs are expected to result from the provision of care and support packages. This means that a small 10 per cent increase in customer numbers and/or package costs can translate into large increases in overall expenditure.

Analysis conducted by the Australian Government Actuary has confirmed that there are uncertainties around all cost elements of the NDIS, e.g. populations, severity distributions and average costs …. .

Preliminary performance data is currently showing that the number of people registering interest in participating in the scheme is 50 per cent more than the expected number of participants for the period 1 July to 30 September 2013. Plan costs are also currently exceeding modelled average costs by around 30 per cent … Since this data on costs is only based on the first quarter of operations—

Photo of Bruce ScottBruce Scott (Maranoa, Deputy-Speaker) Share this | | Hansard source

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.