Patricia Scott Productivity Commission

1. DISABILITY CARE AND SUPPORT:KEY FINDINGS FROM THE PRODUCTIVITY COMMISSION DRAFT REPORT Patricia Scott Productivity Commission National Disability and Carers Congress May 2011

2. What the Commission was asked to do • Asked by the Commonwealth Government to undertake an inquiry into the feasibility of a National Disability Insurance Scheme • We have undertaken extensive consultation. We will finalise our draft report soon following another round of consultations, hearings and submissions

3. Key problems with the current arrangements • Underfunded • Unfair (the postcode ‘lottery’) • Fragmented • Inefficient

4. Current problems • Individuals and families face an uncertain future • Failures to intervene early • Lack of clear responsibilities • No real choice or power • Unsustainable • Inefficient & poor governance • A maze or ‘confusopoly’ • Poor evidence base

5. Our key conclusion is that Governments need to take action • The funding of necessary and reasonable support services for people with disability should be a core function of government • Family and friends and the wider community will always be crucial • No system can or should ever replace them, but we need better, more certain and fairer arrangements

6. Key messages • Systemic change is feasible and necessary • There should be two schemes • There are practical solutions to complex design issues

7. Wait a minute! • The first thing to note is that the draft report may say things you didn’t expect • There is a lot of detail in the full report • We have independently looked at current arrangements • In the draft we recommended TWO not one scheme

8. Wait another minute!! • But the Productivity Commission is usually about market solutions to problems? • Why can’t the private insurance sector look after this? What about private insurance?

9. The private insurance market is not the answer • The private insurance market does not operate well in the area of long term care and support • The insurance cover you would need could be very substantial and most people would underestimate the risk and the cost • The present cover you can get is not enough for a significant long term disability

10. Worth a look if you have half an hour • To avoid being misinformed about what we have said in the draft go to www.pc.gov.au • For the first time we have a key features document • Why look? • Because press reports and some commentary has been wrong. And the report does contain a lot of detail.

11. Two schemes • One to cover all new catastrophic injuries from all types of accidents, drawing on existing no fault motor vehicle accident insurance schemes – the individual state schemes would form a federated catastrophic injury scheme – the National Injury Insurance Scheme

12. The National Injury Insurance Scheme • It is the smaller of the two schemes • Would cover catastrophic injuries from motor vehicle accidents, medical accidents, criminal injury and general accidents occurring in the community or home • It would provide life time care and support

13. Key features of injury scheme • Build on well-run schemes • Mainly uses existing state revenue sources – CTP premiums etc and a small increase in local rates • Will send useful price signals • Start only with new cases (800 a year – but growing slowly to 20,000) • Preliminary estimates costs $685m a year • Starts in 2013

14. The key features of the NDIS • Universal insurance cover • Everyone covered • Support based on reasonable need • Support focused on the individual and their carers • Certainty of support over the long term • Choice

15. 3 Tiers

16. National Disability Insurance Scheme • Reasonableness tests permeate the report • 360,000 people to receive individualised packages • Costs lie between a: • net $4.6-8.0b (with median of $6.3b or $280 per Australian; 1.85% of all tax revenue; 0.5% of GDP) • gross $10.8-14.2b (with median of $12.5b) • Funded from consolidated revenue according to a strict formula

17. Suggested eligibility criteria for individualised packages • Significant core activity limitations in communication, mobility or self care • Have an intellectual disability • Early intervention groups • Have large identifiable benefits from support that would otherwise not be realised

18. A consumer perspective

19. Choice of • managing your own package (within the rules) • choosing your service providers service, not services • choosing a Disability Support Organisation (DSO) broker and an individual advocate to arrange your services as you require them • or a combination of these

20. What’s in and out? • In: • attendant care; community access; aids and appliances; modifications; supported accommodation; respite; taxi vouchers, supported employment • and early intervention • innovation welcome • Outside the NDIS: • public housing, education, health (except early intervention therapies), income support, open employment • Seeking views especially on the mental health interface: supports for those with psychiatric disabilities??

21. Recommend a doubling of existing funding • The cost estimates are preliminary • We recommend a doubling of funding to $12.5b per year • To be paid from consolidated revenue using a legislated formula into a separate account so there is greater certainty • The cost is significant, but we are a wealthy country • Our national income per year is $1,300 billion • The federal budget is more than $380 billion per annum

22. Costs: significant but manageable • The budget costs, while significant, are manageable and affordable. • In reality, there are high costs in having a failing system, including through: • individuals waiting years for necessary services; • respite becoming emergency supported accommodation; • individuals and families worrying about basic services in the future; • longer and more frequents stays in hospitals; • people giving up paid work, and • lost opportunities for paid employment.

23. Alternative financing options • Private insurance • Social insurance • State & LG taxes (ok for the small injury scheme) • GST • Levy on personal income tax • Earmarked consolidated revenue • We looked at State responsibilities vs Australian Government • For certainty want the Commonwealth to fund the NDIS • The 5 options on existing state funding: • The ‘free ride’ • The GST give up • Write a ‘cheque’ • A razor to Special Purpose Payments (SPPs) • A tax swap (the option we prefer in the draft report)

24. What the report doesn’t say • The report does NOT say there should be an increase in the Medicare Levy • It is one way to go but not the option we favour in the draft report • The Medicare Levy at 1.5% covers only a fraction of present health costs • Do we have a levy for the age pension?

25. Many parties play a role in the NDIS • National Disability Insurance Agency • Federated model • Independent (board & rules) • Proper governance • Specialist service and support providers • Links to other government-funded services • Disability Support Organisations • Mainstream services • Governments • Courts And yes we have heard useful messages about carers and advocates

26. Recommended Timetable for NDIS • The state and federal government have already agreed to consider our final report at the Council of Australian Governments meeting (COAG) • We recommended the following timetable in the draft report • 2011-12 MOU and taskforce • 2013 Intergovernmental agreement & appoint board of NDIA; recruit & train key staff, build some infrastructure; provide information • 2014 Rollout in a region • 2015-2018 A path to full coverage for all significant disability Australia-wide • We have heard feedback from participants that a trial rollout in more than one region may be useful

27. Recommended timetable for NIIS • 2011-12 COAG agreement • 2013 Vehicles and medical • 2015 All catastrophic injuries • 2020 Independent review

28. Our work finishes on 31 July 2011 • The Productivity Commission’s role in this process finishes when we hand our report over to the Commonwealth Government at the end of July • The Government (and the political process) will determine when it releases the report and the outcome

29. Over to you… • I am happy to take questions • You can download the overview, the full report, hearing transcripts and submissions from www.pc.gov.au