House debates

Thursday, 2 March 2017


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

9:40 am

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

Last time I mapped out the shameful history of this Abbott-Turnbull government to frustrate, denigrate and in part put in jeopardy—or indeed, at the very least, raise serious doubts about—the NDIS, which is the single most important social reform that this country has seen since the establishment of Medicare. Thankfully, despite the government's best efforts, neither the crossbench nor the Australian people have fallen for this shoddy divide-and-conquer trick. In fact, the response to the government's cynical ploy has been swift, decisive and completely appropriate. The inaugural Chair of the NDIS, Mr Bruce Bonyhady, has rightly labelled the government's behaviour as 'deeply cruel'. Jo Briskey, the Executive Director of the lobby group The Parenthood, said she had had no concerns about NDIS funding prior to the government's implied funding threat. She delivered a very clear warning to the government when she said:

I hope that the Turnbull government sees that they have made a mistake here, they have made a misjudgment, that the NDIS should be above party politics, should be above the petty politics that is happening at the moment and every politician in Canberra should be getting behind the future of the NDIS.

Despite the government's best efforts to undermine the NDIS, it is very clear that the Australian people understand just how important this scheme is for our nation.

Sadly, whilst the government has had some opportunities to revisit its strategy, it would seem that it has taken the path of simply doubling down on former Prime Minister Abbott's strategy of locking in concessions for the wealthiest individuals and companies while loading up all the pain on the most vulnerable in our community. I will leave the final words to Kurt Fearnley, who is not only a top Australian Paralympian but a strong advocate of the NDIS. Indeed, his words rang loudly in my community when he said about the NDIS:

I wish the Government would fight for it with as much vigour as fighting for its $50 billion business tax cut, because they believe both are benefits for our community.

Touche, Mr Fearnley. Let us hope the government will listen.

9:42 am

Photo of Steve GeorganasSteve Georganas (Hindmarsh, Australian Labor Party) Share this | | Hansard source

I too rise to speak against the government's National Disability Insurance Scheme Savings Fund Special Account Bill 2016. The member for Jagajaga, a former minister and tireless advocate of people with disability and of disability reform, like so many of us on this side of the House, outlined with great clarity earlier why this bill is nothing more than smoke and mirrors. It is nothing more than a sneaky way of diminishing what the NDIS is. We on this side of the House can see through the government's sneakiness with this legislation and their tactics that will effectively diminish the livelihoods of Australians with disability.

The National Disability Insurance Scheme was designed, funded and introduced by Labor. It is being delivered on time and within the budget. Already thousands of Australians with disability across the nation are having their lives absolutely transformed because of the NDIS. People with disability, their families and carers know that Labor, we on this side of the House, will always protect them. I, like everyone else on this side of the House, including the member for Jagajaga, who is here in the House today, will keep on fighting to protect the National Disability Insurance Scheme from this government's attacks.

I remember very clearly the day in 2013 when the then minister for disability and the Prime Minister, Julia Gillard, finally succeeded in passing the NDIS. I was sitting in the chair at the time. You could feel the collective sigh of the nation. You could feel that at last we had delivered something for people with disabilities to give them dignity and to give them some form of being able to do the things that most people enjoy doing here in Australia. I can still see the scene before me here in this House. There was elation from both sides of the House. Both sides supported the NDIS in the form that it was presented to the parliament and both sides cheered the bill being passed. Basically, members of the coalition, in opposition at the time, put their hands on their hearts and said, 'Me too. We support the NDIS. Me too. We are part of this.' That is what we heard at the time. But they also said that about other bills and other things that were passed in this place, like Gonski, for example. They were saying things like, 'You can vote for us, the Liberals, and get Gonski and the NDIS.' Those are the things they were saying in the lead-up to the 2013 election. When it comes to things like disability support and education, they were saying, 'There is no difference between us.' They said that over and over, but we all know that it is not correct. The Abbott-Turnbull government has turned its back on Gonski by ripping $30 billion from school funding and now we see it again with this unnecessary piece of legislation.

This bill aims to establish, as we have heard, a special account, the National Disability Insurance Scheme Savings Fund Special Account. The coalition government's priorities are in question about this, not the former Labor government's plan to fund the NDIS. The NDIS was fully funded. Disability organisations have resoundingly rejected this fund and the government's planned cuts that will go into it. The government refuses to listen to those who are experts in the field, like Peter Davidson from ACOSS, who said:

It is not obvious why this new fund is needed. Its purpose, apart from the generic one of funding the NDIS, is not clear and we don't believe it should be supported in its present form.

I will add my own reflections on this very bad piece of legislation. While this is a game of political trickery being played by the government, sadly it is just another example of the government being intent on hurting our most disadvantaged Australians.

Sadly, the future of the NDIS is no orphan when it comes to the government's callous approach to our community. For example, our lowest paid workers are the latest victims, with the cuts to penalty rates that we saw recently. Thousands of people are finding themselves worse off. The Leader of the Opposition presented a bill to save those workers, but the government is refusing to support it. What does this tell us? It tells us that the government is much more interested in giving the big end of town a $50 billion tax cut and ripping money out of the pockets of the people who need it most. This bill is an example of it. It is smoke and mirrors and full of trickery. Disturbingly, inequality in Australia is at a 75-year high, and we are a First World country so that should not be the case. We should be a beacon for progress and advancement in our region. Instead, the gap is getting bigger and bigger. The last thing we want to see is the gap for people with disabilities getting any bigger, so that they are completely out of touch.

Earlier this week I spoke about the omnibus bill. Think about that bill. I have not seen a piece of legislation that puts every community group in one bill and hurts them. They are hurting people with disabilities, people on support pensions and people on Newstart. Absolutely no other piece of legislation that I have seen attacks every sector of the community, all grouped in one bill. That is what the government is doing. This is another piece of legislation which will be used in the future to water down and diminish the good things that were put in place to ensure that people with disabilities have the ability to do the things that all of us take for granted. As I said, this bill is trickery and smoke and mirrors.

We need to ensure that the NDIS is funded correctly, as was proposed in 2013. It was costed, it was articulated in this House and everyone agreed to it, and now the government wants to see it changed. It makes you wonder what the real purpose is behind this particular bill. I oppose this bill because it is nothing other than a waste of the parliament's time—that is No. 1—because we already have the funding in place in its correct form. It is nothing but a political stunt. The government would have people believe that the previous Labor government did not fully fund the NDIS. Those are the things we have been hearing in the media and around the place. Those are the kinds of things it has been putting out there, but nothing could be further from the truth.

We have seen the real intent of this bill and we referred it to a Senate inquiry in order to better understand what the government was attempting to achieve in establishing this account. The inquiry is yet to report. The submissions provided tell a very clear story, though. The minister's own department proved in the submission they put to the inquiry and in evidence presented to the hearing that the NDIS is fully funded. That supports the fact that, in the 2013-14 budget, Labor clearly set out how the NDIS would be funded for 10 years, well past transition to the full scheme. This included reforms to the private health insurance rebate, reforms to retirement incomes, the phase-out of the net medical expenses tax offset and other long-term savings proposals. The Medicare levy was increased by 0.5 percentage points to two per cent, together with the contributions from state and territory governments around the country. These measures clearly covered the cost of the NDIS for 10 years. Just like the day when the NDIS passed, coalition members should remember this, because they voted for almost every single savings measure to fully fund the NDIS. In fact, some of those measures even passed the parliament after the election of 2013, when the coalition formed government. As I said, this new account is a smokescreen for more cruel cuts by the government that will be seen in the future. Australians will not accept more cruel cuts from the government under the guise of funding the NDIS.

The National Disability Insurance Scheme is already funded. Further, the former Labor government actually set up its own special account, the DisabilityCare Australia Fund. This means that there would be two special accounts that would effectively serve the same purpose—funding the NDIS. Not only is this fund unnecessary, but the government is likely to use the fund to justify more budget cuts under the false guise of filling an NDIS funding hole left by Labor—and that is what it is going to try and put in the picture. It is wrong.

It is wrong that the NDIS is being used as an excuse for cuts to payments for the most vulnerable people in our society. As we have seen before, the government seeks to pit one group of vulnerable people against another, and that is just plain wrong. The members on the government side should be ashamed of this particular bill and the trickery that is involved in it—that is, if they had any compassion, and that is becoming increasingly questionable, given the cuts that they are heaping on Australians and what is proposed in this bill, through the trickery and smokescreens, into the future.

9:53 am

Photo of Christian PorterChristian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | | Hansard source

I thank all the members for their contributions in the second reading debate on the National Disability Insurance Scheme Savings Fund Special Account Bill 2016. In summarising and making some comment on those contributions, I would note, of course, from the outset, that the government is fully committed to properly, adequately and sustainably funding the National Disability Insurance Scheme. And it is for precisely that reason that the government is bringing forward this bill to establish a new, ongoing special account which will assist the Commonwealth to meet future financial commitments to the NDIS.

The special account will be known as the National Disability Insurance Scheme Savings Fund Special Account, and in this contribution I will simply refer to that as the savings fund. The savings fund 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 financial commitments to the NDIS. It is necessary to be absolutely crystal clear here: a failure to fully support this bill is a failure to support a bill designed to establish a vehicle in which the Commonwealth government can accumulate clearly identified savings and protect those savings for the exclusive use of the future funding of the NDIS.

Failure to support the bill is a failure to support a process that is absolutely necessary for the NDIS. It is absolutely necessary to give certainty and peace of mind to what will eventually be an estimated 460,000 participants in the NDIS. It is further absolutely necessary to also give assurance to all Australian citizens that the NDIS funding gap, which is absolutely real and which arises in the year 2019-20, will not be funded by further taxes or further borrowings. It is absolutely necessary because of the financial failure of the members opposite to address an issue and a challenge that was always going to be confronted by any government when the NDIS reached its full scheme in 2019-20.

The NDIS represents a massive, overdue and greatly supported increase in funding for disability services. It is one of the largest social and economic policy reforms in Australian history. In 2019-20, the NDIS reaches full scheme, with $21.4 billion worth of funding being allocated in that year. The Commonwealth's share of that total funding will be around $11.1 billion per year.

Currently, to fund the NDIS, the Commonwealth is redirecting existing disability-related spending and accessing the DisabilityCare Australia Fund, which are both applied towards the cost of the NDIS in 2019-20. Existing Commonwealth disability funding which is redirected to the NDIS is estimated to be at about $1.1 billion, the Commonwealth's share of the increase in the Medicare levy through the DisabilityCare Australia Fund is estimated to be at about $4.1 billion, and redirecting funding which is presently provided to the states for specialist disability services is estimated to be at $1.8 billion. In total, therefore, the Commonwealth will direct $7 billion from these sources to the NDIS.

Because of the failure of the previous Labor government to specifically set aside funding for the NDIS—

Photo of Ed HusicEd Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | | Hansard source


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

False! Don't mislead the parliament.

Photo of Christian PorterChristian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | | Hansard source

this will leave a funding shortfall of $4.1 billion in 2019-20, growing to over $7 billion in future years. That is a shortfall which this government will meet. Labor claims—as is clear from the interjections of members opposite—that it 'clearly identified' enough savings that were specifically assigned to pay the other half of the Commonwealth funding requirements. That is a very clumsy attempt to rewrite history. And the claim now that there were adequate specific savings set aside to fully fund the NDIS is wrong for three reasons. First, the claim that enough savings to cover the other half of the Commonwealth spending were 'clearly identified' is not a claim that is capable of anything that resembles proper verification. When you look at Labor's actual budget papers, they did not link savings to the NDIS. And that proposition only ever appeared in a 2013-14 budget glossy.

Photo of Chris BowenChris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | | Hansard source

Oh, a budget paper—hidden in the budget!

Photo of Christian PorterChristian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | | Hansard source

That budget glossy—

Opposition members interjecting

Is that right? That budget glossy spoke about—

Mr Bowen interjecting

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The minister will resume his seat for a second. The member for McMahon is warned. I realise there is going to be a robust nature to the debate, but members have had an opportunity to speak during the debate—I am not sure whether the member for McMahon did. But we are now at the summing-up stage, and I suspect we are approaching a division, and, if the member for McMahon feels as strongly as his interjections indicate, I think he would probably want to be here for it.

Photo of Christian PorterChristian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | | Hansard source

Thank you for your protection, Mr Speaker. The claim that enough savings were available to cover that half of the Commonwealth's spending and that they were clearly identified is simply not true. Before we were interrupted, we were speaking about a budget glossy which made a claim that would have amounted to an extra $2.4 billion of savings in 2019-20, and it labelled that $2.4 billion as 'other long-term savings'. These other long-term savings have never been properly identified in any meaningful way. They certainly were never identified in any budget paper that linked them in any way to the NDIS. In Senate estimates, when asked whether these measures could be listed in detail, the Treasury response was: 'The short answer is no.'

The second reason why the claims of the members opposite are false is that of course the golden rule of public finances is that, where a genuine budget saving is made, it can only be spent once. It can either be spent on deficit reduction or on some other specific purpose. Labor announced its supposed NDIS funding in the 2013-14 budget, but many of the savings measures that it now points to had actually been announced long before that budget and assigned to other purposes, with no mention of the NDIS whatsoever. In order words, Labor grabbed a handful of often previously announced and allocated savings and, after the fact, tried to pretend that they were exclusively assigned to the NDIS to make it look like it was fully funded.

In fact, the final speaker from members opposite made note of one of those savings as the private health insurance reforms, and that is worth some critical investigation. Savings from the private health insurance reforms which are now claimed to have been set aside for the NDIS—indeed, in the last speech from members opposite—would have been estimated to account for $1.1 billion worth of funding in 2019-20. Those were first announced in a media release on 20 October 2012 and included in the 2012-13 Labor MYEFO. Prior to the budget, they were committed to and supposedly funded the NDIS.

These private health insurance savings which are now claimed as NDIS savings were first described as partially offsetting the dental health reform package announced on 29 August 2012. Then, in the same 2012-13 MYEFO, Wayne Swan, the member for Lilley, said of these and other MYEFO savings that they were being used 'to return the budget to surplus in 2013 and beyond' and said:

The Government has made substantial targeted savings, ensuring that Australia's public finances remain strong.

There is no mention whatsoever in the 2012-13 Labor MYEFO that savings from private health insurance reforms would help pay for the NDIS. So the 2012-13 MYEFO had $1.1 billion in savings that are now claimed as being for the NDIS but in the budget paper were either dedicated to pay partly for dental health reforms or deficit reduction. So, first, Labor claimed that this measure would pay for dental health initiatives and, simultaneously, Labor claimed that it would help reduce the deficit and then later Labor claimed that it would pay for the NDIS. So, if there is a golden rule of budgets that you can only spend a dollar once, Labor sees no problem with spending those dollars from private health insurance reforms three times over.

Savings from changes to retirement incomes is another head of savings which has been mentioned. They are now claimed to have been set aside for the NDIS and estimated to account for $0.9 billion of funding in 2019-20. They were first announced by the member for Lilley on 5 April 2013, prior to the budget that committed to and supposedly funded the NDIS. These changes to retirement incomes were described upon announcement in the relevant media release in the following terms:

Australians are living longer and in this context the superannuation system needs to be fair and it needs to be sustainable.

There was no mention of the NDIS in that media release and there was no mention of linking the savings to the NDIS in the 2013-14 budget papers that later sets out these measures. The budget papers and the media release clearly suggest that the savings were designed to allow for a sustainable superannuation system and so contribute to budget repair. Also notable is the fact that one of those measures was never passed by Labor and was not proceeded with after the 2013 election, because the complexity and compliance costs associated with the initiative were extreme and made the proposed saving largely undeliverable.

So, when savings measures were announced, Labor were still committed in those days to a surplus and so committed the funds to reducing the deficit, not merely to more spending. And when the savings were announced Labor did not mention the NDIS at all. Savings Labor now claim they made up to help fund the NDIS went into consolidated revenue and were never set aside to fund the NDIS. They were instead directed at an attempt to get back to surplus and ended up being washed away by Labor's increasing cumulative budget deficits.

Third, it is necessary to note that any serious hypothecation of savings in an area of the size and significance of the NDIS requires a specific fund to be created to protect those savings from any other uses, such as deficit reduction. This is precisely what stops the funds being washed away by growing deficits that were not predicted at the time that the savings were made. In fact, it is notable on this point that, at the time the NDIS appeared in the federal budget in 2012-13, the member for Lilley predicted a surplus of $1.5 billion in 2012-13, which in fact turned into a deficit of $18.8 billion.

Labor did set up a specific fund, the DisabilityCare Australia Fund, to fund the NDIS. It is notable, however, that only the additional Medicare levy proceeds were invested into that fund. No other savings Labor made were ever set aside in the DCAF for future use on the NDIS. At the time of passing the legislation to increase the Medicare levy and establish the DCAF, supported by the coalition, the member for Lilley gave the impression, of course, that this locked in NDIS funding, claiming:

With the increased Medicare levy's passage through the Senate, the lasting future of DisabilityCare Australia will be left in no doubt.

How can it possibly be the case that you can claim to have clearly identified sources of funding when one of the biggest sources of revenue, representing billions of dollars, is described simply and without any further identification as 'other long-term savings'? Labor cannot and will not identify what they are. How can Labor bank billions of dollars of savings that were previously allocated to other purposes such as budget repair and other specific expenditure?

In the real world, the end result has been that the coalition will have to find billions of dollars worth of real and clearly identified savings and place them in a protected account which can only be used for the purposes of funding the NDIS. This savings fund is the mechanism for securing and protecting that funding shortfall and does not require borrowings for the NDIS that would need to be paid back by future generations. It is proof of the responsible and sustainable way that this government follows through on its NDIS commitment. Effectively, the government will, over successive years, put aside savings that are clearly identified, quantified, defined and protected, so that the annual funding gap from the 2019-20 NDIS is met within existing funding. By clearly identifying savings in the savings fund, we will provide an enduring response to the concerns raised by the disability sector in relation to how future governments will fund the shortfall for the NDIS.

In fact, the government has already announced more than $5 billion in savings over the forward estimates that, once realised will be credited to the savings fund when established. Whilst this will ensure the $4.1 billion funding gap in 2019-20 will be met, further deposits will of course need to be made over coming financial years to ensure that we will fill Labor's NDIS funding gap—because it grows to over $7 billion each and every year.

The bill gives the government the flexibility to identify savings from any portfolio, not just the Social Services portfolio. That approach will ensure that many areas of government can contribute to supporting people with a disability. In bringing forward this bill to create the National Disability Insurance Scheme Savings Fund Special Account, the government is producing a robust and enduring solution to meet the Commonwealth's funding commitments for the NDIS.

It is important here to recall the original recommendations of the Productivity Commission. The Productivity Commission itself recommended:

The Australian Government should direct payments from consolidated revenue into a 'National Disability Insurance Premium Fund'—

using 'a legislated formula to achieve transparency and certainty'. Interestingly, at the time of the Productivity Commission inquiry, the Australian Council of Social Service also noted:

… there must be a clear "fund" specifically for the proposed disability scheme.

The government urges passage of the National Disability Insurance Scheme Savings Fund Special Account Bill 2016, as recommended by the Senate Community Affairs Legislation Committee. In coming to this position, the committee noted:

The committee is of the view that this legislation presents a significant step toward ensuring that NDIS funding is both adequate and sustainable.

It is critical that the Commonwealth manages its funding in a way that is transparent and quantifiable and meets the Commonwealth funding commitments to ensure the NDIS is fully funded. The government is of course 100 per cent committed to delivering and funding the NDIS in full. We have supported the NDIS from day one and this savings fund demonstrates that ongoing commitment. I commend the bill to the House.

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The original question was that this bill be now read a second time. To this, the honourable member for Jagajaga has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be agreed to.

10:19 am

Photo of Tony SmithTony Smith (Speaker) Share this | | Hansard source

The question is this bill be now read a second time.

Bill read a second time.