Bill Shorten

While the government has bungled its attempt to link welfare savings to funding the National Disability Insurance Scheme and thereby wrecked its omnibus savings bill, it’s also put a stumbling block in the path of Bill Shorten, and he tripped inelegantly over it a couple of times on Wednesday.

The issue is whether Labor fully funded the NDIS over the long term when it committed to it in 2013. Labor is vehement that it fully funded the scheme — Wayne Swan, in particular, arks up whenever anyone suggests it’s not fully funded.

First, some background — the NDIS was always a long-term program that would ramp up over a period of years, rather than your usual government program for which funding is provided over forward estimates (four years). So merely identifying funding over forward estimates back in 2013, when Swan presided over Labor’s last budget, while notionally compliant with normal budget practice, would have left a major question about how a massive program would be funded beyond forward estimates and especially from 2019, when it hit full speed. Labor therefore provided numbers for a 10-year funding trajectory showing that the program would be funded from an increase in the Medicare levy — a rare case of a major income tax rise that not merely drew no challenge from the then-opposition but elicited virtually no criticism from the electorate — and other savings. 

The issue has blown up before, and Labor argues that it specified what those other savings were: superannuation changes, private health insurance cuts, tobacco excise and fringe benefits tax changes. The government replies that these savings weren’t explicitly linked to the NDIS in the relevant budget papers — which is true, but fiscally irrelevant, as long as the savings are there.

An important context for this debate is to recall that when the government was elected in 2014, it set about — despite its “budget emergency” rhetoric — abandoning $20 billion worth of revenue over FEs by abandoning or repealing Labor measures like the carbon price, superannuation tax concession reforms, fringe benefit tax changes and the mining tax. These, too, would have had ongoing benefits to the budget beyond forward estimates, even though the carbon price would have fallen to European price levels, curtailing the revenue from it. Instead of being the fiscal firefighters that Tony Abbott liked to claim to be, the Coalition on this issue are piously lamenting the lack of funding for the NDIS when they themselves have slashed long-term revenue.

But Bill Shorten was across none of that nuance when asked Wednesday about NDIS funding. The first time was on the ABC, when he was put on the spot ton explain how Labor would have funded it. “I was there in 2013 when Jenny Macklin outlined that we would increase the Medicare levy and we would make other savings.” And that was it — then he tried to change the subject. “The other thing about the National Disability Insurance Scheme which makes, quite frankly, the government’s behaviour quite scandalous is …”

Then later at a doorstop, when he replied “you have to refer to the budget papers. It was a 10-year plan.”

Unconvincing stuff. But at least, by that time, his staff had dug out this exchange between Penny Wong and the then-Secretary of the Department of Finance, David Tune, in the first estimates hearings after the 2013 election:

Wong: Perhaps I can just confirm that in relation to disability care the former government identified long-term savings which were projected over a 10-year period to fund those policies. 
Tune: Yes, that is correct.
Wong: That was generally budget measures and savings indicated over four years, but on this occasion the government chose to indicate decisions over a 10-year period. And in terms of disability care, a similar approach was taken? Mr
Tune: It was.
Wong: And that also showed a 10-year funding plan for disability care, just as there was a 10-year funding plan for the schools. And under disability care the long-term decisions included the Medicare levy increase, the retirement incomes, private health insurance reform and a range of other long-term savings, including the indexation of tobacco, fringe benefits, net medical expenses, and import processing charges.
Tune: That sounds correct, yes.

It was belated and feeble recovery by Shorten, and not before the government had mocked his “car crash” interview with Sabra Lane and accused him of “floundering” on the issue. It produced its own estimates transcript from earlier in 2013 when Treasury declined to itemise the savings funding the NDIS. For a desperate government that has bungled its latest political tactic, Shorten’s poor preparation on a question he should have been well across was a welcome distraction.

Peter Fray

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