How regional providers set the bar for a stronger NDIS funding model

The National Disability Insurance Scheme (NDIS) has an image problem. A perception one, and a fiscal one. It is Australia’s second fastest growing budget expense, and before the Federal Government announced an overhaul, the scheme was set to cost $100 billion by the next decade. Rapid growth and cases of fraud have given the impression the scheme is routinely rorted at scale, but this doesn’t reflect the reality of operations of reputable not-for-profit providers.

We now know at least 160,000 participants are set to be removed by the end of the decade. Reform was necessary, but the scale and speed of these changes deserve scrutiny, particularly for regional Australia, where the consequences will be felt most acutely. What is also sometimes lost in the NDIS debate is how the scheme contributes to economic growth, through engagement, employment and service demand.

Regional providers see firsthand where the scheme works and where it falls short, often stepping in as the ‘provider of last resort’ to ensure no one in our communities is left without support. As the Government’s savings plan is rolled out, regional realities must not be forgotten. Notably in his speech announcing sweeping reforms, Minister Mark Butler made no mention of regional areas, or the thin markets that define service delivery outside our cities.

Australia would be worse off without the NDIS – especially in the regions

Socially and economically, Australia would be worse off without an insurance framework to include and support people with permanent or significant disability. Before the NDIS was introduced in July 2013, care was fragmented, and costs were spread across other areas. Today, the care economy the NDIS helps sustain, is increasingly replacing traditional employment opportunities in many regional areas, providing stable, local jobs in communities that have lost manufacturing, agriculture or resource‑sector employment.

The Productivity Commission found the old system was failing vulnerable Australians; it was generating enormous uncompensated costs that fell on families and on the health, justice and public housing systems. Before the NDIS, people who needed trauma-informed care were even more likely to end up in emergency departments or police cells.

In 2011, the Productivity Commission also found that the lack of workforce participation by carers was a major economic cost. Increased employment for people with disability and their families benefits the wider economy, boosting tax revenue and GDP. If Australia achieves the OECD average for employment for people with disability, by 2030 around $12 billion would be added to GDP, an increase of around 0.5 per cent.

Negative headlines aren’t the full story

The Federal Government now plans to slow the growth of the scheme to an average of 2 per cent per year, returning to 5 per cent from 2030. Minister Mark Butler announced plans to reduce the cost of the average plans from $31,000 to the 2023 average of $26,000. That involves significant cuts to social and community participation. People living in isolated regional areas rely on these programs for quality of life, decision-makers must remember regional settings are different to life in urban areas, where there are fewer barriers to community inclusion. Funding redirected to an Inclusive Communities Fund will only be a fraction of what was available.

It should also be remembered there is temporary cost pain that will pay off later. The NDIS is shifting to a market with stricter compliance and oversight, which Kirinari also supports. From 1 July this year, organisations that provide Supported Independent Living accommodation must be registered, a positive change that will create better industry-wide standards. Mandatory registration will be expanded to providers in high-risk activities, such as personal care, a move that is also welcome.

However, these reforms will also drive-up administrative costs that must be passed on, keeping prices at the ceiling of NDIS limits.  

Supported Disability Accommodation policy is another source of cost friction. Pricing was updated to incentivise developers to build housing with high physical supports for residents with complex needs. However, while communities wait for this housing supply, we still must fund older stock and high-cost placements in hospitals or aged care. We have to pay for future supply while still funding the current crisis.

The case for regional loading 

Providers of human services in regional Australia are more than the title ‘providers’ suggests. NDIS participants rely on us for more than a single service they are funded for. For many, support workers are the antidote to loneliness and the workers who pick up on essential needs that may otherwise be missed.

Delivery of services in the regions is vastly different to that in the cities. In Sydney or Melbourne, for example, a support worker may be able to see 5 clients for one hour each in a day, with the other 3 hours spent travelling between locations and a lunch break. In the regions, it can take one hour just to drive between two clients.

Even before the fuel crisis, providers in the country were not adequately funded for travel. That’s why we continue to call for the introduction of regional loading – a small top up payment on funding, that recognises the increased cost burden.

Regional loading doesn’t mean more funding for the scheme, but a more equitable spread that recognises the increased cost of delivering quality care to the 239,769 people living in regional and remote Australia, who represent 31 per cent of NDIS participants.

Loading currently exists for remote and very remote locations (applicable to approximately 1.4 per cent of NDIS participants), but not for regional areas that face the same cost pressures and limited availability of services.

Smaller economies of scale give regional providers a front row seat to observe what needs to be strengthened, to ensure all Australians have the chance to lead a good life, no matter where they live.