The 2019-20 budget continues to be unusual. What should have been an easy sell for the government yesterday was dogged by two minor matters: extending cash handouts to Newstart recipients and the NDIS underspend.
The Newstart bungle is trivial for the budget (an extra $80 million in spending having to be tacked on to the deficit this year on the night of the budget itself) but not so trivial for recipients, whom the government simply forgot about. It said much for the mentality of the Coalition toward the unemployed. Probably understandable when you endlessly claim the best form of welfare is a job and have no interest in increasing an unemployment benefit that the governing class — from the Business Council to ACOSS — are unanimous in declaring needs to be raised.
But the NDIS underspend issue is worth exploring, because Scott Morrison has found himself on the wrong end of the media’s ignorance about how budgets deal with demand-driven programs.
If you allocate $2 billion for a fast train, you spend $2 billion. Easy. But if you set up a new, or change an existing, demand-driven program — which are usually in social services and health — you can’t just cap spending at a nice round figure. You have to estimate demand for the program — how many people will use a new medical service, and how extensively if there are different levels of use. There are finance teams in line agencies like health, and in the Department of Finance, whose job it is to try and estimate demand for such programs as accurately as possible using complex modelling.
Interactions with other programs, and with the tax system, may also need to be considered. The government then allocates money based on those estimates, but it understands that there could be greater-than-forecast demand — or less than forecast.
For the NDIS — a demand-driven scheme — the allocation is complicated by the fact that it is still in a transitional ramp-up phase, and that provision is first via the states and then through frontline providers. The government has found itself in a situation where funding has not been flowing to frontline providers as quickly as it originally estimated in the last two years, creating a substantial underspend. On the weekend, long sensitive to the charge that it cares more about the budget than people with disabilities, it took a decision to increase payments to frontline providers in an effort to get some of its $1.6 billion underspend out the door and into the program.
Labor, of course, is having none of that. “The Abbott-Turnbull-Morrison government has shamefully built almost a quarter of their projected budget surplus on underspends in the NDIS,” said Linda Burney in a media release. “It’s $1.6 billion in services and support that people with disability will miss out on because the government has botched the NDIS rollout at every turn.”
Labor insists that the government has cut resourcing so that it’s harder to apply successfully for access to the scheme. This is variant of a tactic Labor has used repeatedly, and with great success, over the last five and a half years — portray any change in future funding growth as a “cut” to funding, even if said funding is still growing. All’s fair in love and politics, of course — the Coalition has long relied on opposing climate action using the same trick about economic growth.
Nor could the government look to support from the disability sector or the industry — there has never yet been a sector that thought government money couldn’t flow faster, and easier, with less paperwork.
But none of that was any justification for the ABC’s Jon Faine launching an hysterical attack on Scott Morrison yesterday in Melbourne. leading off an interview with, “Is it a moral fail to build an election surplus off starving the National Disability Insurance Scheme of money, leaving disabled people without the services they need?”
Morrison, rightly angry, accused Faine of lying about the issue and tried to explain how demand-driven programs work, despite regular interruptions. Maybe Faine thinks governments use a crystal ball to estimate demand and any deviation is necessarily some nasty attempt to hurt recipients.
However unfair, it’s damaging to a government that has long had to fight perceptions it isn’t really committed to the NDIS, despite the scheme — and its funding — being about the only thing Tony Abbott said yes to in opposition. If Labor wins, there’ll continue to be plenty of underspends across programs into the future. But somehow it’s unlikely they’ll be treated the same way by the media.
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Editor-in-chief of Crikey
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Bernard, have you considered operating beyond a binary analysis of a problem? Or doing some actual investigative journalism? Anybody who is paying any attention knows that the NDIA, the agency implementing the NDIS, is chronically under resourced and unable to make decisions within reasonable time frames – this is the primary reason for the underspend. For some reason you think this argument is a Labor ‘tactic’.
I know that the tactic is nevertheless based on a real problem – a lack of resourcing and attendant broken internal systems. For example, the NDIA is, generally speaking, unable to identify without investigating an issue where in the process a request for assistance is at – i.e. it can’t even identify the problem which makes it difficult to solve. Have you enquired about the NDIA’s IT systems perhaps? That would be a good start. The media should have been attacking the resourcing and internal workings of the agency, not the scheme, but you seem to think there’s no issue at all and I’m not sure how you can be so certain. It’s important to consider whether there are in fact systemic problems with the agency itself that may have caused the underspend. This would be a good issue for an investigative journalist to examine.
All I can say is I hope you live a long life because I suspect the chronic under resourcing and ineptitude of the agency will all come out in the wash and you’ll realise that being contrary without engaging in any investigation or analysis means you will have missed the mark yet again.
And this:
“If Labor wins, there’ll continue to be plenty of underspends across programs into the future. But somehow it’s unlikely they’ll be treated the same way by the media.”
Really? What evidence is there for this? The media always criticises Labor no matter what, and it’s no surprise, given the ownership of the MSM.
The idea that the media will give LABOR a better ride on financials/costings than the Coalition is a sick joke.
I’m giving up on Keane at this point. There are issues where he’s a good read, but since the fall of Turnbull he’s had some serious departures of reality, this latest one being the idea that the media is unfair on the Liberals and will be fairer to Labor. Is he auditioning to join Alice Workman at The Australian?
Bernard is apparently aware of the Faine-Morrison interview yesterday but seems to have missed 3LO/774 morning program on Tuesday with Waleed Aly (Faine was apparently at Yarralumla getting a gong from Cossie). Had he listened to Waleed, he’d have heard a procession of people phoning in to complain about the impossibly labyrinthine bureaucracy in applying for NDIS assistance, eg getting a wheelchair was one instance.
I get that the bureaucracy needs to be cautious in dispensing govt money but it seems to me the caution is almost exclusively applied to individuals and not businesses (Pink Batts, ABC Child Learning, Day Care, VET education etc).
I also get that Crikey runs on a shoestring budget but that does not excuse Mr Keane making half-baked generalisations based on his experience as a bureaucrat, while failing to check the fine print.
Thanks for that explanation Bernard. I can now dispense the whole budget as a fraud and waste of time.
Budget an easy sell? Only if you ignore the various attempts at what were pretty amateurish sleights of hand Even prime LNP booster Paul Kelly observed on Speers that it was not going to change the political landscape meaning don’t expect a budget inspired poll bounce.
“..despite the scheme — and its funding — being about the only thing Tony Abbott said yes to in opposition..”
Seriously? Do I have a failed memory? He said no cuts to…many, many things and promptly cut them once he came into govt. So why would he and his successors not drag their heels on the NDIS? After all, it too was a Labor idea, just like the NBN. Like the NBN you don’t outright cut the NDIS, you emasculate it suitably. As you say, it’s a well-known technique, also used by Labor (although you didn’t give any examples of that). And as for things being “cut” when they are still “growing”, that is easy to fix if you consider the amounts as a percentage of GDP. Just because some amount is growing but is a smaller percentage of GDP/population you know it has been cut.
It’s becoming more and more obvious Bernard, that you want the return of the LNP in Canberra almost as much as you wanted it in NSW.
This fatuous statement makes it very clear.
“However unfair, it’s damaging to a government that has long had to fight perceptions it isn’t really committed to the NDIS, despite the scheme — and its funding — being about the only thing Tony Abbott said yes to in opposition. If Labor wins, there’ll continue to be plenty of underspends across programs into the future. But somehow it’s unlikely they’ll be treated the same way by the media.”
Poor LNP being treated badly by the evil media. Such a good bunch deserving of better treatment than the nasty ALP.
Give us a break Bernard.