Wed, 03 Apr - 19:59
Viewed 31 times

Transcript: ABC News With Greg Jennett

GREG JENNETT:

But first, there is also on social media and in mainstream media a debate raging not about the money that’s been spent in last night’s Budget, but about money once allocated and then not spent. We're talking here about the National Disability Insurance Scheme, once allocated $16 and $20 billion for this financial year and for next, but now allocated amounts of $13 and $17 billion. Well, the Social Services Minister, Paul Fletcher, is trying to douse some of the flames around this heated debate. He was with us here in our studio just a few moments ago. 

[Excerpt]

GREG JENNETT:

Paul Fletcher, a bit of confusion at large on the Disability Insurance Scheme. An underspend - do you acknowledge one? And why?

PAUL FLETCHER:

The National Disability Insurance Scheme is a demand-driven program. So what we need to do is make sure the Budget best reflects the total number of participants in the scheme and in turn the amount we expect to spend. Now, the bilateral estimates, which have been in place for some time, see the scheme getting to 460,000 at so-called full scheme. Where we are- where we’ll be as at 30 June 2019 is a little behind where we thought we would be when the bilateral estimates were done, probably at order of- we’re at about 75 per cent of where we thought we’d be.

GREG JENNETT:

You're talking 3 billion below estimates in both of two years, aren't you? 

PAUL FLETCHER:

Well, so, if we just talk about 19/20 for a moment, we have made a variation because of the number of participants being a little lower than was expected when last year's Budget was done. Now, that variation, of that- it’s about 3 billion. Of that, about a billion then goes back to the states, or their contribution is reduced. At the same time, we’re going to spend about 400 million of new spending in two important areas: the administrative cost of the National Disability Insurance Agency, and 

Commonwealth programs supporting people with disability. Because we've taken a little longer than was expected to move people from those programs into the NDIS, then the Commonwealth needs to incur extra spending in 19/20 compared to what was previously [indistinct].

GREG JENNETT:

So, you’re telling us, yes, it’s running a little on the underside. But why then use a word like boost in last night's Budget papers? A $1.6 billion adjustment?

PAUL FLETCHER:

Yeah, let’s go back a step and look at the context. In mid-2016, there were 30,000 participants. There’s now over 250,000 participants; the scheme’s expanded by 700 per cent in that time. We still expect to get to the 460,000 at full scheme. So, there’s been huge growth. The other thing that’s 

happened, I announced over the weekend $850 million of extra spending, and that is across everybody who is a participant now, more spending through their plans on higher prices, for things like personal care workers - the hourly rate for them - or things like what you pay to a physiotherapist, occupational therapist, et cetera. 

GREG JENNETT:

Is that going to work? Because we are hearing that providers like Australian Unity have been contemplating - we're told through back channels - walking away from scheme.  That would be devastating.

PAUL FLETCHER:

So the announcement I made on Saturday was well received across the sector. And it’s important. The issues are linked: how much we pay and the growth of the scheme. Because part of increasing the payment amounts - and that followed an extensive review of pricing that was done within the National Disability Insurance Agency; they’ve got a Pricing Reference Group which includes two independent external experts. The increase in prices, a key motivation for that was to increase the depth of the market in, say, rural and remote areas so there are more providers. As we get more providers - and the number of providers has risen very dramatically as well over the past 3 years – as we get more providers, that assists in getting more people into the scheme. So, it’s all part of the continuing work we're doing, along with things like our new participant pathways, new early childhood, early intervention, the new psychosocial disability pathway and so on.

GREG JENNETT:

Are you sure you’ve addressed all of that, though? Because we’re told by one provider that 

the formulas used to fund them compensate them for their face time consultations with people, but not necessarily for physical paperwork that they have to handle. I mean, the question is, has all of this been thought through and priced accordingly?

PAUL FLETCHER:

Look, it has been very carefully worked through, in fact, within the National Disability Insurance Agency. So, we engaged external consulting assistants to do a major piece of work last year. It’s been worked through, as I say, with this Pricing Reference Group, which includes two independent external experts. And that’s how we’ve arrived at quite significant price increases, up to 15.4 per cent. And so that is designed to put providers in a position where they are receiving high levels of remuneration, and importantly, we’re also increasing what goes into people's plans in line with that. Because if you’re saying you pay more per hour, it is important to give people more money to pay. So, we are covering both sides of the equation there, and we do think - and from the reaction we’ve had from the sector - we are pretty confident in this. We do think this will be important improving the economics of a number of the providers, ensuring their sustainability. But it’s also important in continuing that growth of numbers. As I say, we’re well over 250,000 now, but we need- well, the bilateral estimate was to be about 460,000. I want to make this very clear. 

GREG JENNET:

[Interrupts] By when? When do you hit 460?

PAUL FLETCHER:

We expect to be there 2021/22; in the 2021/22 financial year. And I want to make this point, that in the Budget, the numbers we’ve got for 20/21- ’19, ’20, ’21, are $22 billion. The number we’ve got for 2021/22 is $23.6 billion. Those numbers are based upon getting to that bilateral estimate, the 460,000. We are very focused on continuing to get to where we expect it to get to. We are running a little behind, so we’ve made an adjustment in 19/20. And also, as you’ve pointed out earlier, we’ve made an adjustment in 18/19. But we are very focused on continuing to grow the number of participants in the NDIS.

GREG JENNET:

Alright, an adjustment. Can we just move on from the NDIS? Also broadly in your Social Services, looks like Government doing catch-up on these energy supplement payments. Is it now your intention to pick up all of these categories that Labor's been talking about this morning: ABSTUDY, Austudy, Double Orphan Pension, Newstart-  I could go on, there’s 11 of them. Is the Government adopting this?

PAUL FLETCHER:

Well, let's put aside who or who may not be claiming the credit for this. 

GREG JENNET:

[Interrupts] Or why they were missed in the first place?

PAUL FLETCHER:

It is a Government decision, and the decision we have taken is that we will provide the energy assistance payment, which is $75 one off payment for a single, $125 for a couple to be paid before 30 June this year, and that will extend across about 5 million people, in fact, including Newstart, including Youth Allowance, other, as well as age pension, disability support pension.

GREG JENNET:

When was that decision made?

PAUL FLETCHER:

We’ve made that decision in the last few days, and we’ve done that-

GREG JENNET:

[Interrupts] When did the Budget go to print? I mean, was this pre-Budget or post-Budget?

PAUL FLETCHER:

Well, we’ve made the decision in the last few days and it’s reflected in the legislation that was introduced in House of Reps this morning; it has now passed the House of Reps and will now go to the Senate. So, 5 million people will benefit, a cost of $360 million. And that money, very importantly, spent in 2018/19. One other very important number of course, surplus, $7.1 billion 2019 [indistinct]-

GREG JENNET:

[Interrupts] Got it, yep. I’ve got the surplus. I’m intrigued by the 360, 5 million, because the earlier number we were given was in the 280s.

PAUL FLETCHER:

[Talks over] Sure, and so we- yes, we’ve made a decision to increase the categories of people who are included.

GREG JENNET:

[Interrupts] Why? When did the penny drop for you on this?

PAUL FLETCHER:

Because of a recognition, that of course, the cost of energy need to be faced by a wide range of people …

GREG JENNET:

[Talks over] A recognition that cut in on, what, Sunday afternoon? Monday?

PAUL FLETCHER:

… including all of those 5 million people. So that’s the decision we’ve taken. Very importantly, spent in 18/19; surplus, 7.1 billion in 19/20. Any suggestion that this impacts the surplus is quite wrong. And I make the point that the incremental spend of $80 million or so in the context of overall government spending in 18/19 approaching $500 billion, it’s a [indistinct].

GREG JENNET:

[Interrupts] Sure, but it doesn't instil confidence when the boast or the claim is careful, methodical, sound economic judgement and suddenly we bundle in all sorts of recipients for an extra $80 million?

PAUL FLETCHER:

Greg, we have considered the arguments that there was a case for a broader group of people to receive 

the payment than had been originally been intended. We’ve made that decision; that’s in the legislation. It’s passed the House of Reps. I’m confident, or I certainly hope it’ll pass the Senate. I expect it’ll pass the Senate. And so that is good news for 5 million Australians - $75 for singles, $125 for couples in an energy assistance payment to assist people to cope with the cost of energy, to be paid before 30 June this year, as long as you are eligible to receive a payment, whichever category of payment it is you get on 2 April this year. 

GREG JENNET:

Well, it certainly does look like it’ll get through and I reckon you might here the word backflip tossed into the mix as it does that through the Parliament today. Paul Fletcher, for clearing up both issues or attempting to, thanks for joining us today. 

PAUL FLETCHER:

Thanks, Greg.