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Aug 6, 2012

NDIS redux; more blame and shame

Cartoon: By Pickering

Not so long ago the National Disability Insurance Scheme was mentioned here with the emphasis being on the political grandstanding and costs involved. The concept is popular here as most people feel that something should be done for at least the profoundly disabled. The states already provide more than $6 million in this area, there is undoubtedly a federal contribution, and private charities do their bit as well, although this is rarely mentioned.

The Productivity Commission first raised the idea some time ago, and it has gathered momentum since the declining figures of the government in the polls have leant some urgency to finding some popular big spending scheme for Gillard to hang her hat on. It is little more than a month ago that the carbon tax was touted as about to become so wildly popular that Gillard could hold an early election and decimate the opposition. This has not come to fruition.

Costs are the biggest problem; they have escalated dramatically even as it is spoken about. The reality given the government’s involvement is likely to be much worse.

Mike O’Connor of the Courier Mail has an insightful piece on the issue:

… The PM has cajoled most of the states into accepting a "trial" of the NDIS. She did this for one reason and one reason only, and it oozes political pragmatism. She needed to do something to pull the Government out of its death spiral and the disabled and the emotive images they conjure, in tandem with their undeniable need of assistance, fitted perfectly into this political strategy. …

… The real political bastardry in play here is the cynicism of the Gillard ploy.

She knows that in four years - when the trial phase is ended and the $1 billion her Government has committed to fund it has been spent - she won't be PM, Labor will be in opposition and it will have ceased to be her problem. The trial sites won't even be operational until next July and the next federal election must be held by November 30. In the meantime, Gillard can claim political credit for having championed the cause of the disabled and can hope against hope that it might help propel her across the electoral finish line. …

… The Productivity Commission says it will take four years to create a fully operational national scheme for a total cost of $19 billion, with the final year alone costing $6.5 billion. Already these figures are being adjusted upwards. Labor now puts the final-year cost at $7.5 billion. Once it is up and running, it is estimated the scheme will cost $14.5 billion a year, including the $6.5 billion the states are already spending. So someone has to find an extra $8 billion a year.

Place this against the likelihood of falling prices for our mineral exports and the consensus that the best of the mining boom is behind us, and that additional $8 billion might just as well be $80 billion. …
One aspect that is not factored in, is the likely escalation due to easing of the requirements to be met by those who wish to be beneficiaries of it. When unemployment rises, there is a strong urge by governments to get the figures down by whatever means are available. Moving a substantial number of these people into welfare schemes that do not reflect badly on politicians, such as ‘early retirement’ or disability payments is a big temptation.

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