MARK RILEY: Drastic changes coming to NDIS as unofficial rorting by parents is increasing cost to taxpayers

Julia Gillard was reduced to tears 13 years ago as she presented the legislation funding the National Disability Insurance Scheme to the House of Representatives.

The then-Prime Minister struggled to maintain her composure as she spoke about the thousands of people with disabilities who felt cruelly abandoned by the system.

“Over the past six years, the idea of a national disability insurance scheme has found a place in our nation’s heart,” she said.

“Today we inscribe it in our nation’s finances.”

And now her Labor ministerial successors are metaphorically driven to tears by what that scheme has become.

Particularly what it is doing to the nation’s finances.

It is enough to make a saint weep.

A former head of the Productivity Commission, Gary Banks, was one of the chief proponents of the NDIS.

His 2011 report into disability services persuaded many lawmakers to back it.

Professor Banks cautioned at the time, though, that it wouldn’t be cheap. He estimated it would cost $13 billion a year once fully operational. That seemed like an extraordinary amount of money. But it was conservative. Very conservative.

Twenty years later, the cost of the NDIS has skyrocketed faster than Artemis II.

It is estimated to cost taxpayers more than $50b this financial year.

Professor Banks now regrets recommending the scheme, conceding that it has become the “most wasteful use of resources” within the care economy.

And once people are in scheme, they stay in it.

In 2022-23, the proportion of participants aged between 0 and 14 who left the NDIS was just 1.5 per cent.

“As in the song Hotel California, it seems that many people enter the program but few ever leave,” Professor Banks observed.

The greatest problem is that a well-meaning scheme that was designed to provide essential support for people with moderate to severe physical and intellectual disabilities has become overwhelmed by extraordinary numbers of children with autism.

Health Minister Mark Butler said recently that one in every 10 Australian six-year-old is now on the NDIS. Most have autism. They represent about 40 percent of total NDIS participants, each with support programs costing an average of $32,800 a year.

Many of those children and their families need and deserve that level of support. But a lot don’t.

Much is said and written about the rampant defrauding of the NDIS by criminal outfits and individuals who are delivering phantom services to bogus participants.

But the uncomfortable secret of the scheme is that one of the biggest problems is unofficial rorting by parents of children diagnosed with mild autism spectrum disorders who are abusing the system to secure benefits that simply aren’t justified.

There are three recognised stages of autism. The NDIS only covers the two worst - stages 2 and 3.

Stage 1 covers those exhibiting the mildest symptoms. They used to be described as having “high-functioning autism”.

But the number of children in Australia being diagnosed as stage 1, which isn’t covered by the NDIS, has collapsed in recent years.

At the same time, the number of those diagnosed with the more severe stage 2, which is covered, has exploded.

The only reasonable assumption is that parents have been gaming the system, exaggerating their children’s symptoms in order to secure packages. But that will soon change.

Starting in a few months, most NDIS participants with stage 2 autism will be progressively moved to the new Thriving Kids scheme.

The State-based program will deliver support services at school and at home, tailored to individual needs and jointly funded by the states and the Commonwealth.

It is the biggest change to the NDIS since its inception.

Mr Butler is expected to use a National Press Club address next week to outline other changes that are coming in next month’s Federal Budget as he tries to reduce the NDIS’s annual cost growth from 10 percent to 6 percent within four years.

Some of the changes to eligibility and services will be drastic. They will have to be to keep the system sustainable.

But for those well-intentioned people who designed the NDIS, the fact that it has come to this point must be a crying shame.

Mark Riley is the Seven Network’s political editor