Scott morrison NDIS 2019 budget
(Image: AAP/Lukas Coch)

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.

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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.