Minister Bill Shorten warns that cleaning up NDIS may take three years

Clearing the rorters and criminals out of the NDIS might take two or three years, Bill Shorten warned after revelations that it had been used to funnel money into illicit drugs, luxury cars and holidays.

The NDIS Minister has pointed to hundreds of compliance investigations, 20 prosecutions and 12 more cases on the way to show the Federal Government is serious about cracking down on misuse of taxpayer funds.

“The reality is that there was a remarkable degree of naivety by the previous administration that when you’ve got a large pot of government money, they didn’t invest in the back office systems to be able to scrutinise payments,” he said.

“I think the next two to three years, we will see significant improvement but we’re seeing improvements right now.”

The head of the NDIA’s integrity and fraud taskforce John Dardo told Senate estimates that there was a significant problem with the scheme being used to funnel money into drugs and the Government was not simply able prosecute or audit its way out.

Liberal senator Maria Kovacic asked what kind of drugs were involved: “Heroin, cocaine, speed, ice, everything?”

“You name it, it is on the list,” Mr Dardo replied.

“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.

“These are providers that are going out of their way to put people in harm’s way. They have commoditised those participants and their plans.”

Mr Dardo estimated that about 5 per cent of the scheme’s $42 billion budget — or more than $2 billion a year — was not being spent on genuine needs.

Mr Shorten has previously said that figure could be as high as 10 per cent.

“It is true that there are some service providers in particular who’ve seen the attraction of government money and they’re more focused on their own wealth and gain than they are about the people in the scheme,” he said on Wednesday.

But he highlighted that he had poached Mr Dardo from the tax office specifically because he wanted someone to beef up the NDIS’s capacity to deal with fraud and crime.

“What is in the best interest of people with disability? If that’s the question we can always answer, we will eliminate the rorts and we’ll deliver better outcomes for the scheme and the taxpayer,” Mr Shorten said.