The NDIS encapsulates what is wrong with modern Australia

The National Disability Insurance Scheme began as a well-intentioned plan to help the most helpless Australians. It morphed into a sprawling welfare state that facilitated cynical exploitation of the vulnerable and the public purse.

Health Minister Mark Butler acknowledged many of the problems and proposed solutions on Wednesday.

His plan is a good start. But many of the underlying problems will persist, including no financial threshold for assistance and no requirement for recipients to chip in for regular life tasks, from driving lessons to kitchen cleaning.

Mr Butler intends to make it harder to get into what is widely known as a “golden ticket” to free service. The 739,000 enrolees at the end of last financial year will be cut back to 600,000 by the end of the decade, he promised. Without action the numbers “on the NDIS” will hit 900,000 by 2030.

The free market for NDIS suppliers — even child psychologists are advertising for NDIS clients on the radio these days — will be shut down. Too many tales of dodgy cleaning-and-assistance firms in high-unemployment suburbs have emerged to allow the system to continue.

“It won’t be this free-for-all market that has developed over the past 10 years and is serving nobodies’ interest,” he told the National Press Club on Wednesday.

Holidays on the NDIS

One service frequently abused, and an example of the scheme’s overgenerosity, are short-term accommodation allowances.

Designed to give disabled people’s families time off from caring duties, some enterprising businesses realised they could be used for holidays, cruises and other travel. NDIS businesses took out ads suggesting the scheme would cover “all inclusive” holidays.

Could they be shut down for such blatant abuse? No. All the government could do was refer them to the competition regulator for false advertising.

Mr Butler is aware of the problems, which existed before the Labor Party took power, and is taking action.

About 90 per cent of payments, which could top $50 billion this financial year, will be paid to providers registered with the government. They will have to meet government performance standards. It may be a rare case where more bureaucracy saves money.

Payments will be made digitally, allowing the money to be tracked by the government. Why this hasn’t already happened in the scheme’s 13 years is unclear. But it should become harder for disability entrepreneurs to hide their incomes from the tax man.

The ‘honeypot’

Fiscal reality is forcing change. The cost is out of control. Without change, in a few years the NDIS budget will surpass defence spending.

Facing indefinite deficits, the government had to put aside its natural affinity for welfare and restrict access to what even Mr Butler accepts is a “honeypot”.

Serious reform, though, is conceptually and ideologically beyond the Labor Government. Mr Butler said means testing — restricting access to the wealthy — was unnecessary because anyone on the scheme most of their life would earn little.

That’s true, but ignores the reality that disabled people have always been cared by their families. The richer their parents are, the better care they receive.

Even a requirement to make a modest financial contribution was ruled out. Instead, the services are entirely free for recipients, creating an incentive to take more than needed.

“The scheme was premised on universal access,” Mr Butler said.

Which is true, and why it is a financial, social and political failure.

The NDIS has become a symbol of what is wrong with modern Australia: government has become the first resort for any problem, rather than a backup for intractable challenges.