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Parliamentary report captures concerns about NDIS market

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A major new report from a Federal Parliamentary inquiry calls for the immediate development of an NDIS market stewardship strategy, the establishment of a disability sector assistance fund and the transfer of responsibility for NDIS price-setting to an agency that is independent of the NDIA.The Joint Standing Committee on the NDIS, which crosses party lines, has produced a report on NDIS market readiness that is highly critical of the flawed approach to NDIS transition and the lack of market stewardship.The committee says a market stewardship strategy must clearly articulate the roles, responsibilities and activities of all parties responsible for NDIS market stewardship. It quotes NDS, stating: "We need clarity about the roles of different government agencies involved in market stewardship – the role of the National Disability Insurance Agency, the role of the new quality and safeguards commission, the role of the Department of Social Services, the role of state governments."Waiting until the market fails is not acceptable. Effective stewardship must identify emerging risks and intervene early.Citing NDS's State of the Disability Sector Report, it points to “a critical shortage of disability support workers” and highlights the impact of inadequate pricing: “Because of the NDIS pricing structure, service providers are unable to offer training and professional development to their staff. The committee is also concerned that staff supervision and mentoring have also been reduced, which is potentially compromising the quality of care offered to participants. The committee is of the view that these issues are directly related to NDIS pricing.”The committee says it was troubled to hear of the inability of many service providers to operate at even modest profit levels and that inadequate pricing was resulting in providers discontinuing services to some participants. The report echoes the view of many service providers that NDIS pricing should reflect the additional administration costs associated with operating in the difficult NDIS environment. As NDS pointed out to the committee, 75 per cent of the sample of providers analysed by the Independent Pricing Review could not deliver supports profitably at NDIS prices. This is a major contributor to the risk of NDIS market failure.The report states: "The committee agrees with the view that while price setting is held within the NDIA, there is an inherent risk for price setting to be used to offset budget pressures. In this context, an independent body is best placed to monitor and analyse market trends, and make recommendations about pricing of disability supports."Following the Productivity Commission’s 2017 report on NDIS costs, the committee recommends transferring price-setting powers to the NDIS Quality and Safeguards Commission, and that this should occur by mid-2020.Other important pricing recommendations relate to the pricing of supports to participants with high and complex needs and the urgent need to release information on provider of last resort arrangements.The report raises significant concerns about workforce pressures: “The committee is concerned that there are currently virtually no incentives to choose a career in the disability support sector. Submitters who have worked for a very long time in the sector described how working conditions have dramatically deteriorated under the NDIS. In short, they reported a rise in underemployment and insecure work arrangements, inadequate wages and no prospect of professional development opportunities. Under these conditions, it is hard to imagine how to retain highly experienced and qualified workers and attract new workers, including young people entering the workforce.” The committee draws on NDS's Workforce Wizard data and Annual Market Survey results, but is critical of the lack of data available from government agencies. It recommends that the Australian Bureau of Statistics regularly collect and publish data on the disability workforce. It also wants the Department of Social Services to develop and publicly release a national strategy to develop the workforce.

The Joint Standing Committee has produced a significant report that captures critical concerns about the implementation of the NDIS and the risk of market failure expressed by NDS and the disability sector. In due course, the Government and the NDIA will need to respond to the report. NDS urges the Government and the Agency to produce a timely and constructive response.NDS's 2018 State of the Disability Sector Report will be launched at the CEO Meeting on 19 to 20 November. We have invited the new Social Services Minister, Paul Fletcher, and the Shadow Minister, Linda Burney, to speak at the conference.

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