NDIS funding: The National Commission of Audit report

Released on 1 May 2014, the National Commission of Audit report at section 7.2 discusses the NDIS.

The Report includes projections of annual costs of $22.1 billion in the 2019-2020 year, for support of 450,000 persons. However early package costs have been $46,000 per person, rather than the $35,000 per person as had been projected. The Commonwealth has accepted responsibility for any cost overruns in the launch/transition phases.

The Commission in cautious language appears to support:

  • a slower rollout of the scheme, so as to minimise the financial risks; and
  • a less complex governance arrangement
  • shifting of some financial responsibility away from the independent board
  • consolidation of the Board and the Advisory Committee into a single advisory committtee
  • making the NDIA into a statutory agency, with a CEO reporting directly to the relevant Commonwealth Minister
  • contracting out of NDIA functions to organisations already working in the disability sector

The Commission notes that any delay in implementation of the proposed National Injury Insurance Scheme (NIIS) will shift some costs to the NDIS.

The relevant recommendation, 16, reads as follows:

The National Disability Insurance Scheme is a worthy scheme with widespread community support. The Commission recommends the Commonwealth continue to support the introduction of the National Disability Insurance Scheme, but that the scheme be implemented in a way which is fiscally sustainable by:

    • pursuing a slower phasing in of the scheme recognising that this will require the re negotiation of bilateral agreements with the States;
    • amending governance arrangements to make the National Disability Insurance Agency a prescribed agency under the Financial Management and Accountability Act 1997, with the Chief Executive Officer directly accountable to the Minister;
    • exercising budget control to ensure long-term financial viability;
    • implementing contracting arrangements with the informal (not-for-profit) sector or other disability services bodies, including those operating in existing State schemes, to ensure contestability in the delivery of services to people with disabilities; and
    • simplifying reporting arrangements to ensure transparency in the cost and efficiency of the delivery of disability services between the States.

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