Bill Shorten vows crackdown on dodgy NDIS providers after revelations participants spent funding on drugs

Bill Shorten has vowed to crack down on dodgy NDIS providers after it was revealed many were spending their funding on heroin, ice and cocaine, as well as holidays and cars.

The NDIS Minister turned the attack back on the Opposition during Question Time on Tuesday, as he was probed on whether he had allowed drugs to be trafficked to Australia’s “most vulnerable” using taxpayer money.

Mr Shorten, who came under fire on Monday when Senate estimates uncovered one of his personal speechwriters had received a two-year contract worth $620,000, is under broader pressure to weed out dodgy providers and limit the growth of the ballooning rort.

As Parliament this week debates new legislation that would crack down on the rort, it was revealed during Senate estimates on Monday night about $2 billion of the $40b-a-year scheme was being inappropriately spent.

The scheme’s head of fraud and integrity John Dardo said in just the last week alone, funding had been used for “a $20,000 holiday, a $10,000 holiday… (and) we had a participant that bought a (brand new) car, $73,000”.

Another spent $240,000 a year on personal expenses, including rent.

Mr Dardo admitted there were “absolutely” instances of illicit drugs being bought and sold through the NDIS.

“I have spoken very recently to a participant who would meet the provider at the ATM, the provider would withdraw cash, and provide that cash to the participant for her to source illicit substances ... we’re not talking dozens or hundreds of participants, we’re talking significantly higher,” he said on Monday.

Asked what substances that included, Mr Dardo said: “You name it, it’s on the list”.

Mr Shorten conceded there were issues with fraud but vowed Labor was “fixing” the problem, suggesting the Liberal Party’s “incompetent and naïve” approach to the NDIS during their decade in power had contributed to the widespread rorting.

“We have got about 500-plus investigations of compliance matters under investigation. We have 222 investigations underway. We have 20 prosecutions in the court. We have another 12 matters currently with the DPP (Department of Public Prosecutions) to consider,” Mr Shorten said.

“And clearly, anyone claiming items which are not allowed under the scheme, it is illegal. The one difference between us and those in opposition is we are doing something about fixing up the scheme.”

Mr Dardo said when approached, many participants understood they had done the wrong thing and were willing to repay the money, but some participants “cease contact and refuse to engage”.

Laws being debated by Parliament would change how participants can receive funding and what they can spend that on, as part of a major crackdown on the Federal Government’s second-largest budget expense.

Mr Dardo said the changes being worked through were causing widespread angst among participants who had been told by their providers they could access rent subsidies, alcohol, gift vouchers and other lifestyle expenses through the scheme.

“The participants … have grown accustomed to that as a standard of living, or they have signed leases on the understanding that was the lifestyle they would enjoy. And saying, ‘Sorry, you cannot keep claiming that money to subsidise that type of spend’, you can imagine some of our participants are having their standard of living disrupted,” Mr Dardo said.