Hannah Orban: How the NDIS can be saved without spending any extra money

After what feels like years of bad news about the National Disability Insurance Scheme, finally there’s some good news.

It might be hard to believe — the situation has been looking dire.

Yes, the NDIS is in strife. At nearly $42 billion this financial year, and set to rise to $58b by 2028, the costs of the NDIS are growing too quickly for the scheme as we know it to be sustainable.

This threatens not only the Government’s bottom line but also the certainty of the daily supports that hundreds of thousands of Australians with disability rely on. You can imagine how stressed the disability community feels about the prospect of losing what they need.

Yes, the NDIS has a targeting problem — there are lots of people who need some support but get nothing from it, and there are many people who do get admitted onto the scheme but are then poorly served by it.

This is true for people with disability who get a bucket of NDIS money — sometimes in the hundreds of thousands of dollars a year — but little to no help to plan how best to spend it.

And it’s especially true for people who need early intervention — notably children, and people with psychosocial disability (disability that results from mental illness).

Families get a bucket of money and then have to try to differentiate between therapies for their children, while under pressure from therapy providers.

And people with psychosocial disability often receive funding that is poorly aligned to the evidence about what works best. This risks creating dependency rather than enabling personal recovery.

And yes, the Federal, State, and Territory governments are now stuck in an 18-month long negotiation gridlock about how to fund foundational supports — that is, less-intensive supports for all people with disability, many of whom aren’t eligible for the NDIS.

The original plan was for these supports be rolled out from July 1. But we now know that that is not going to happen. To make matters worse, hospital funding and State GST revenue are also bundled up in the same negotiation.

So, what’s the good news? Governments can fix all these problems with the NDIS. And the better news is that they can do it without spending any extra money.

Grattan Institute’s latest report Saving the NDIS: How to rebalance disability services to get better results, lays out how governments can solve these policy problems, ensuring the NDIS will still be here for future generations of Australians who need it.

The solution is in better spending the money already in the disability services system. By redirecting a small amount of funding from the NDIS — about 10 per cent all up — governments can fund an ambitious program of foundational supports. This would mean that, with the same money, more people with disability could get more services.

Setting up more services is vital for saving the NDIS too. These services are the missing middle of disability supports, helping people who need a bit more than mainstream services, but who don’t need a high cost individualised plan.

Disability services for people with lower intensity support needs, and for children and people with psychosocial disability, would help take pressure off the NDIS in two ways. First, by helping to reduce, prevent, or delay people’s need for more intensive individualised support from the NDIS. Second, diverting people to foundational supports would take pressure off the NDIS because disabled people would have somewhere else to go for the support they need.

NDIS eligibility should be changed so that children with developmental delay and disability are directed to commissioned services that cost less and better serve more children and families for the same funding.

Grattan Institute’s plan factors in the $19b of savings that Government is banking on over the next four years, and goes one better. Our plan would result in a further reduction in NDIS payments of about $12b over the next 10 years, and a further saving of $34b over the same period from not needing to find new money to fund foundational supports.

People with disability must be the focus of NDIS reform. Our analysis shows that the Federal, State, and Territory governments can rein in NDIS costs in ways that will make the NDIS better and fairer — and more sustainable.

Governments should make an urgent course correction. The NDIS is worth saving. It is a vital part of Australia’s social fabric that can still be world leading.

All of these services for the same money — now that’s a good news NDIS story.

Hannah Orban is a co-author of the new Grattan Institute report, Saving the NDIS: How to rebalance disability services to get better results