Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697629816627.pdf (Australia)
The Senate Community Affairs Legislation Committee National Disability Insurance Scheme Savings Fund Special Account Bill 2016 [Provisions] November 2016  Commonwealth of Australia 2016 ISBN 978-1-76010-471-9 Secretariat Ms Jeanette Radcliffe (Committee Secretary) Ms Kate Gauthier (Principal Research Officer) Ms Natasha Rusjakovski (Senior Research Officer) Dr Josh Forkert (Senior Research Officer) Ms Carol Stewart (Administrative Officer) Mr Antonios Vlachos (Administrative Officer) PO Box 6100 Parliament House Canberra ACT 2600 Phone: Fax: E-mail: Internet: 02 6277 3515 02 6277 5829 community.affairs.sen@aph.gov.au www.aph.gov.au/senate_ca This document was produced by the Senate Community Affairs Committee Secretariat and printed by the Senate Printing Unit, Parliament House, Canberra.
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License.
The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/ ii MEMBERSHIP OF THE COMMITTEE 45th Parliament Members Senator Jonathon Duniam, Chair Senator Rachel Siewert, Deputy Chair Tasmania, LP Western Australia, AG Senator Sam Dastyari (from 10 October 2016) New South Wales, ALP Senator the Hon Don Farrell (to 10 October 2016) South Australia, ALP Senator Linda Reynolds Senator Dean Smith Senator Murray Watt Western Australia, LP Western Australia, LP Queensland, ALP iii iv TABLE OF CONTENTS Membership of the Committee ........................................................................ iii List of Recommendations .................................................................................vii Chapter 1 Purpose of the bill ................................................................................................... 1 NDIS Savings Fund Special Account .................................................................... 1 Legislative scrutiny ................................................................................................ 2 Conduct of the inquiry ............................................................................................ 3 Chapter 2 Key issues................................................................................................................... 5 Ensuring sustainable funding ................................................................................. 5 Funding the special account
 ................................................................................... 6 Committee view ...................................................................................................... 9 The need for a special account ............................................................................... 9 The Minister's level of discretion ......................................................................... 12 Committee view .................................................................................................... 14 Labor Senators' Dissenting Report Concerns about funding for the special account .................................................. 15 Concerns about the need for a special account ..................................................... 16 Concerns about the Minister's discretion.............................................................. 16 Australian Greens Senators' Dissenting Report Introduction .......................................................................................................... 19 The need for a special account ............................................................................. 19 The Minister's level of discretion ......................................................................... 20 Funding the special account ................................................................................. 20 Review of the fund's operation
 ............................................................................. 22 Appendix 1 Submissions and additional information received by the Committee ............... 25 Appendix 2 Public hearings ........................................................................................................ 27 vi LIST OF RECOMMENDATIONS Recommendation 1 2.46 The committee recommends that the bill be passed.
viii Chapter 1 Purpose of the bill The purpose of the National Disability Insurance Scheme Savings Fund 1.1 Special Account Bill 2016 (the bill) is to assist the current and future governments in ensuring funding commitments are met by providing financial protection in the event of a funding shortfall.

1.2 The National Disability Insurance Scheme (NDIS) is one of the largest social and economic policy reforms in Australia's history.
The scheme supports Australians with disability to lead a more independent life—empowering them to make choices about the support they need by providing financial support directly, not through service providers.1 Increasing social inclusion through the NDIS will also boost productivity and 1.3 create new economic opportunities.
It is estimated that the NDIS will be supporting 460 000 Australians with disability by 2019–20, at which point the scheme will be fully rolled out and injecting growth into the economy.2 1.4 Sustainable funding will be critical if the NDIS is to succeed and flourish.
The government has stated its firm commitment to ensuring funding is both adequate and sustainable.3 NDIS Savings Fund Special Account 1.5 The bill would assist in meeting NDIS funding commitments by establishing a new ongoing special account under section 5 for the purposes of the Public Governance, Performance and Accountability Act 2013.4 The purpose of the special account is outlined in section 6: a) to assist the Commonwealth to meet its funding obligations in relation to the National Disability Insurance Scheme Act 2013; b) to make payments to the National Disability Insurance Scheme Launch Transition Agency for the purposes of the Agency; 1 2 3 The Hon.
Mr Christian Porter, Minister for Social Services, House of Representatives Hansard, 31 August, p. 104.

The Australian Productivity Commission estimates that the economic benefits brought by the NDIS will outweigh the costs, and will contribute close to one per cent to gross domestic product (GDP).

The Hon.

Mr Christian Porter, Minister for Social Services, House of Representatives Hansard, 31 August, p. 104.

The Hon.
The Hon.

Mr Christian Porter, Minister for Social Services, House of Representatives Hansard, 31 August, p. 104.

4 Section 5(2), National Disability Insurance Scheme Savings Fund Special Account Bill 2016.
2 c) to reduce the balance of the Account (and, therefore, the available appropriation for the Account) without making a real or notional payment.5 1.6 Responsibility for management of the account would rest with the Minister for Social Services.6 Section 8 would empower the Minister to delegate any of his powers to the Secretary of the Department of Social Services or a Senior Executive Service (SES) employee within the department.7 Credits to the account Credits to the account would be committed for a period of ten years and made 1.7 from a number of Commonwealth sources, while debits would be made for the specific purpose of funding Commonwealth shortfalls related to the NDIS.8 Sources of credit may include: • underspends and net savings from the NDIS and other portfolio savings, as determined by the Minister for Social Services; • discretionary decisions by the Prime Minister or the Cabinet (for example, to establish a starting balance at the special account’s commencement); and • decisions by the Prime Minister or the Cabinet about identified savings from other Commonwealth portfolios.9 1.8 The government states the bill would have a negligible financial impact over the forward estimates.
The special account would sit within the Consolidated Revenue Fund and as such would not incur any Public Debt Interest or management costs.10 Legislative scrutiny The bill's explanatory memorandum states that the proposed legislation is 1.9 compatible with the human rights recognised or declared through international instruments listed in subsection 3(1) of the Human Rights (Parliamentary Scrutiny) Section 6, National Disability Insurance Scheme Savings Fund Special Account Bill 2016.
Explanatory memorandum, National Disability Insurance Scheme Savings Fund Special Account Bill 2016, p. 1.

Section 8, National Disability Insurance Scheme Savings Fund Special Account Bill 2016.

Explanatory memorandum, National Disability Insurance Scheme Savings Fund Special Account Bill 2016, p. 3.

Explanatory memorandum, National Disability Insurance Scheme Savings Fund Special Account Bill 2016, p. 1.
10 Explanatory memorandum, National Disability Insurance Scheme Savings Fund Special Account Bill 2016, p. 1.

3 Act 2011.11 The Parliamentary Joint Committee on Human Rights considered the bill in its 37th report of the 44th Parliament and made no comment.12 The bill was also considered by the Senate Standing Committee for the 1.10 Scrutiny of Bills in its Alert Digest No.5 of 2016, and no comment was made.
Conduct of the inquiry The bill was referred to the Senate Community Affairs Legislation Committee 1.11 on 15 September 2016, for inquiry and report by 7 November 2016.13 The committee received 15 submissions and held a public hearing in Canberra 1.12 on 14 October 2016.

Submitters and witnesses are listed in Appendices 1 and 2 respectively.

The committee thanks the submitters and witnesses who contributed to this 1.13 inquiry.
11 Explanatory memorandum, National Disability Insurance Scheme Savings Fund Special Account Bill 2016, p. 3.

12 Parliamentary Joint Committee on Human Rights, 37th report of the 44th Parliament, 2 May 2016, p. 9.

13 Senate Standing Committee for Selection of Bills, Report No.

6 of 2016, Appendices 7 and 8.

The bill was introduced in March 2016, but lapsed due to the prorogation of Parliament.

See http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?

bId=r5642.
bId=r5642.

4 Chapter 2 Key issues The National Disability Insurance Scheme Savings Fund Special Account Bill 2.1 2016 (the bill) proposes to establish a special fund as a means of providing a protective mechanism in the event of a National Disability Insurance Scheme (NDIS) funding shortfall.

2.2 Submitters were unanimous in their support for a well-funded NDIS, with many also lending in principle support for the introduction of a future fund as a funding safety mechanism.
Support for a sustainably funded NDIS notwithstanding, concern was noted regarding where budget savings for the currently projected shortfall in funding would be found, whether a special account is the best way to ensure sustainable funding, and how much discretion the bill would afford the Minister for Social Services (Minister).

2.3 These issues are examined below.

Ensuring sustainable funding 2.4 Funding for the NDIS is secured by way of a complex arrangement of revenue sources.
These include Commonwealth funding, redirected state and territory disability funding and the NDIS component of the Medicare Levy.1 2.5 The Department of Social Services (department) stated that the complexity of the NDIS funding arrangement is the result of ‘jurisdictions gradually transitioning their specialist disability service systems to the Scheme and four different Commonwealth funding sources'.2 There is no additional funding requirement until 2019–20 because the revenue for the increased Medicare Levy, together with redirected existing disability expenditure, is expected to be higher than the Commonwealth's required contribution, as per the table below:3 1 2 3 Disabled People's Organisations Australia, Submission 15, p. 2.
Department of Social Services, Submission 9, p. 3.

Department of Social Services, Submission 9, p. 2.
6 By 2019-20 however, when the scheme is due for complete roll-out, more 2.6 Commonwealth funding for that year is projected to be sourced from: • existing funding from the Commonwealth specialist disability programmes transitioning to the NDIS ($1.1 billion); • existing funding provided to the States and Territories (states) under the National Disability Agreement and 2011 National Health Reform Agreement ($1.8 billion); • an increase in the Medicare Levy by 0.5 per cent, which will provide funding to the NDIS via the DisabilityCare Australia Fund (DCAF) ($3.9 billion); and funding from consolidated revenue ($4.4 billion).4 • The above figures indicate that an additional $4.4 billion in funding will be 2.7 needed in the first year the NDIS is fully rolled out.
By 2023–24, as the scheme matures, that funding requirement is projected to grow to $7 billion.5 In the 2016 Federal Budget the government identified savings of $2.3 billion 2.8 which may be credited to the proposed NDIS special account over the forward estimates.
This figure includes $711.2 million 'as a result of revised NDIS transition assumptions arising from bilateral agreements for the transition' to the full roll-out of the scheme, as well as approximately $1.6 billion in savings to social security payments, subject to legislation on savings proposals being enacted by Parliament.6 This would reduce the Scheme’s future funding requirement and ensure sustainable funding.7 2.9 explored below.
The process by which savings are identified and funding decisions made is Funding the special account 2.10 The bill's explanatory memorandum states that the Minister would determine amounts to be credited to the proposed special account, where credits may result from: • • underspends and net savings from the NDIS and other portfolio savings, as determined by the Minister for Social Services; discretionary decisions by the Prime Minister or the Cabinet (for example, to establish a starting balance at the special account’s commencement); and 4 5 6 7 Department of Social Services, Submission 9, p. 2.


Department of Social Services, Submission 9, p. 3.

Department of Social Services, Submission 9, p. 3.

7 • decisions by the Prime Minister or the Cabinet about identified savings from other Commonwealth portfolios.8 The explanatory memorandum does not, however, stipulate how savings 2.11 decisions by the government are to be made.
The committee noted some stakeholder unease on this issue, with a number of submitters and witnesses expressing concern about the link between savings identified in social services portfolios and funding for the NDIS.

This concern, as put by Children and Young People with Disability (CYDA), is based on the savings identified in the 2016 Budget: The 2016 Federal Budget identified savings to be credited into the NDIS tax Savings Fund.
These compensation to new income support recipients; changes to how new Carer Allowance claims are backdated; reviewing 30 000 Disability Support Pension (DSP) recipients per year for three years to assess their capacity to work; and savings from within the NDIS.9 from: closing carbon include savings 2.12 Many submitters, the Australian Council of Social Service (ACOSS) among them, were opposed to savings being identified in other social services areas in order to be injected into the proposed special account: ACOSS strongly opposes linking savings in the area of social security for people with a disability to funding of the NDIS, not least because it creates a false economy.
Moving people from DSP [Disability Services Pension] onto Newstart will result in them losing $175 per week ad plunge them into poverty.10 2.13 ACOSS added that using savings in other areas of social security would be "a false economy".11 2.14 Queensland Advocacy Incorporated (QAI), despite supporting the creation of a special fund as a protective mechanism, did not support "addressing shortfalls in the Commonwealth's allocated NDIS funding…by decreasing other forms of social welfare funding.
"12 2.15 CYDA expanded on this: Addressing the present NDIS funding gap through savings made from other areas of the budget will take vital funding away from vulnerable people and requires the NDIS to compete for funding with other areas of need.

For example, the changes to the DSP announced in the Budget would involve DSP recipients deemed eligible for Newstart receiving around $170 less income per fortnight.
Given that the DSP is an essential income support program that provides a vital safety net, tying NDIS funding to reduced 8 Explanatory memorandum, National Disability Insurance Scheme Savings Fund Special Account Bill 2016, p. 1.

9 Children and Young People with Disability, Submission 13, pp 4–5.

10 Australian Council of Social Service, Submission 11, p. 1.

11 Australian Council of Social Service, Submission 11, p. 1.

12 Queensland Advocacy Incorporated, Submission 5, p. 2.
8 DSP spending creates a concerning tension between two areas of essential services.13 Similarly, the Australian Network on Disability (AND) sought assurance that 2.16 existing social services would not be adversely impacted: What assurance is there that funding credits are sourced from a social services program surplus or underspends, rather than by cutting existing programs, which may negatively impact on vulnerable groups of people, and especially for people with a disability.14 These views were echoed by others, such as Tandem, the Victorian peak body 2.17 representing carers of people with mental illness, which sought assurance that the principle of ‘no disadvantage’ would in no way be undermined if the proposed legislation were enacted.
Tandem concluded that more clarity was needed.15 How budget savings are identified To clarify how government savings and funding decisions are made, and what 2.18 separates the two processes, the committee sought evidence from the department.

2.19 The department explained that savings are identified through a range of processes.

Every year departments and agencies follow a process for proposing savings on existing programs or spending on new or existing policies.
These departmental proposals are then considered by the Expenditure Review Committee (ERC), which examines proposals from all agencies and departments, and then makes decisions about savings and funding accordingly.16 …[T]hose discretionary decisions around spends or savings are made by Prime Minister and Cabinet through normal government processes.
If those decisions are made, it might be a decision for a saving over here and it may again be another decision of government to contribute some of those savings to the NDIS fund.17 2.20 The department confirmed that, while the Minister seeks advice on potential savings from his portfolio agencies, this process is separate to subsequent funding decisions, which are made once the balance of savings across portfolios is known: [T]he Minister for Social Services, currently Minister Porter, is obviously responsible for the Social Services portfolio.
He will take proposals in many policy areas for which he is responsible or for saves to the government.

I assure you that that process is completely separate from the process of the government making decisions or the minister proposing to the government about some of those saves that might not come from the 13 Children and Young People with Disability, Submission 13, p. 5.

14 Australian Network on Disability, Submission 3, p. 1.

15 Tandem, Submission 6, p. 5.


16 Department of Social Services, Proof Committee Hansard, 14 October 2016, p. 32.

17 Ms Helen McDevitt, Group Manager, NDIS Transition Oversight, Department of Social Services, Proof Committee Hansard, 14 October 2016, p. 32.

9 Social Services portfolio—some might come from other portfolios or from NDIS savings or underspends.
Those decisions are completely separate and subsequent to the save decisions.18 2.21 Furthermore, as pointed out by National Disability Services (NDS), it is important to note that the bill would allow the government to identify savings from any portfolio, not just the Social Services portfolio.19 Committee view 2.22 The committee acknowledges concerns about savings from other social services areas being used to fund the proposed special account.
However, the committee notes that savings decisions are made through established and known government processes, not by an individual minister.

Decisions on savings are made after consultation with departments and agencies, separately from decisions about how any savings will subsequently be allocated and to which policy programs.

In essence, money identified through budget savings is pooled before being re-allocated elsewhere.
The committee is therefore satisfied that the proposed legislation does not reflect or establish a link between savings in any particular portfolio area and funding for the NDIS.

2.23 The committee is of the view that Budget measures and the objective of this bill—that is, establishing a dedicated account to quarantine funding for the NDIS— should not be conflated.

The need for a special account 2.24 A number of submitters questioned the need for a special account.
CYDA, for example, submitted: The need for a 'special account' in addition to the DisabilityCare Australia Fund to hold funds for the NDIS is therefore unclear.

It is CYDA's understanding that this is not a typical funding arrangement for other core areas of government such as health or education.
Current special accounts cover a broad range of policy area but are typically created for more specific programs.20 2.25 Queensland Advocacy Incorporated (QAI), an independent advocacy organisation and community legal service, extended in principle support for the special account, but expressed a concern that the NDIS could become ‘the focus of an ongoing political battle each budget cycle.’21 To ensure adequate and sustainable 18 Ms Felicity Hand, Deputy Secretary, Department of Social Services, Proof Committee Hansard, 14 October 2016, pp 31–32.
19 National Disability Services, Submission 8, p. 1.

NDS was of the view that identifying significant and justified savings from other social services areas would be difficult, but did, however, support welfare savings achieved through helping people who can work find employment.

20 Children and Young People with Disability, Submission 13, p. 4.

21 Queensland Advocacy Incorporated, Submission 5, p. 2.
10 funding, QAI instead proposed that NDIS costs on full roll-out be paid through an expanded DisabilityCare Australia Fund (DisabilityCare).22 Like QAI, People with Disabilities Western Australia (PWdWA) asked why 2.26 the DisabilityCare Australia Fund was not amended to enable credits to be made from other sources, as an alternative to the mechanism proposed by the bill: Our understanding is that there is already an account set up to fund the NDIS.
So, if it requires changes to increase the variety of sources that can put credits into that account, then why not amend the legislation?

We do not understand why multiple legislative instruments are required for what should be the same purpose.
We think that to be able to put underspends and savings from the NDIS back into the NDIS fund again should be part of the original fund that was set up or a change made to that fund for that to be able to happen.23 2.27 Like the other organisations above, Disabled People's Organisations Australia (DPO Australia) suggested the existing DisabilityCare Australia Fund as a better alternative to the bill: The DisabilityCare Australia Fund was established as a Special Account to fund the NDIS, and we are unclear as to why an additional Special Account needs to be established.
If additional funding for the NDIS needs to be sourced through alternate revenue measures, this funding could be channelled directly through the existing DisabilityCare Australia Fund.24 The committee put this question to the department, and was informed that all 2.28 possible mechanisms, including the DisabilityCare Australia Fund, were looked at before the government settled on the proposed fund.
Policy advice on amending the DisabilityCare Fund was sought: …[O]ur policy advice was also that it would be unwise because the Disability Care Australia Fund is an investment fund that was set up to reimburse the states and Commonwealth for funding expended for the purposes of the NDIS.
It is an investment fund and it is very hard to quickly withdraw funds from it for emergency purposes—for instance, for the NDIS.25 2.29 Asked to expand on this, the department explained the limitations of DisabilityCare: A significant limitation of the DCAF is that any payments made are reimbursements to the Commonwealth and states and territories for expenditure incurred in relation to the National Disability Insurance Scheme Act 2013.
In contrast, the Savings Fund would allow payments to 22 Queensland Advocacy Incorporated, Submission 5, p. 2.

23 People With Disabilities (Western Australia), Proof Committee Hansard, 14 October, p. 1.

24 Disabled People's Organisations Australia, Submission 15, p. 2.

25 Ms Felicity Hand, Deputy Secretary, Department of Social Services, Proof Committee Hansard, 14 October 2016, p. 36.
11 be made to the National Disability Insurance Agency in advance to avoid any cash the Commonwealth to meet its funding obligations for the National Disability Insurance Scheme Act 2013.26 flexibility would better enable issues.
This flow 2.30 The proposed NDIS savings account, conversely, would be a special, dedicated account to be used only for the purposes of the NDIS, and only for meeting the Commonwealth’s funding requirement, not for state expenditure:27 …[A]s the Savings Fund is a special account in the Consolidated Revenue Fund, it would ensure the Government has greater flexibility to respond to urgent funding needs.
If a funding risk materialises, funds could be withdrawn from the special account as determined by the Minister for Social Services.
Withdrawing invested funds (such as the DCAF) takes longer relative to withdrawing funds in a special account in the Consolidated Revenue Fund.28 2.31 The committee understands that two of the key benefits of the proposed special account are minimising delays between funding allocation and expenditure and mitigating the resulting risk of any unspent funds being returned to consolidated revenue.
2.32 As put by NDS: During the trial phase of the NDIS, delays between the allocation of funds to the National Disability Insurance Agency and the expenditure of those funds have been longer than expected, reflecting, in part, the time between people requesting access to the Scheme and the activation of their plans.

The NDIS Savings Fund Special Account will prevent funds unspent because of a timing lag from being returned to consolidated revenue and lost to the NDIS.
The Special Account, in effect, quarantines these funds for their original intended purpose.

NDS supports the creation of such an Account.29 The reason for time delays between funding allocation and expenditure are 2.33 complex.

NDS explained: People develop plans, they have the plans approved and it then takes them some time to identify appropriate providers of supports and to receive those supports and then for the providers or themselves as self-managing participants to bill the agency.
In other words, it is a timing issue.

It is does not reflect in any sense that the plans are overestimating the need for supports, and I would expect that as the scheme matures the timing lag will reduce.

Nevertheless, while it exists there is a risk that money unspent at the end of the financial year would be returned to consolidated revenue, and 26 Department of Social Services, answer to questions on notice, received 27 October 2016, p. 7.
27 Ms Felicity Hand, Deputy Secretary, Department of Social Services, Proof Committee Hansard, 14 October 2016, p. 36.

28 Department of Social Services, answer to questions on notice, received 27 October 2016, p. 7.

29 National Disability Services, Submission 8, p. 1.

12 the savings fund would allow for that money to be quarantined for the purpose for which it was initially meant.
That is very important.30 The key benefit of creating the proposed special account, therefore, is the 2.34 effect it will have by quarantining all available funding for NDIS use.

This would ensure the money is there when needed.

Once the NDIS reaches full scheme, the committee understands, funds would only be returned from the special account to the Consolidated Revenue Fund 'if the balance of the special account becomes greater than required.
'31 The Minister's level of discretion 2.35 The Minister’s discretion in managing the proposed special account was another concern identified by submitters and witnesses.

One of these, ACOSS, suggested that, if enacted, the bill would alter the balance of power between the Minister and the National Disability Insurance Agency (NDIA): The governance structure to administer the scheme was set up through the NDIA.
If the minister has direct control of the stream of funds going to the NDIA that sets up a different kind of dynamic in the relationship between the minister and the authority.

The original idea was that the authority would have a degree of autonomy so that it could undertake long-term the planning, and also because Commonwealth government that are involved in this.

So it does change the dynamic.

How that will play out is anybody’s guess.


But I expect it to empower the minister, relative to the NDIA, if I could put it that way.32 there are stakeholders other than 2.36 CYDA raised concerns that the bill would provide the Minister with discretionary powers to identify savings from other portfolio areas to be placed in the NDIS Savings Fund: This vests significant control over the fund with the Commonwealth Government.
Funding for the NDIS will therefore be dependent on the capacity of the government of the day to identify savings according to their priorities and have them passed through Parliament.
This puts funding for the NDIS in a precarious position, determined by the budget cycle.33 2.37 The committee notes the explanatory memorandum outlines that credits to the special account would be announced and committed for a period of ten years34, which would somewhat quarantine such funds from the usual budget cycle pressures.

30 Dr Ken Baker, Chief Executive, National Disability Services, Proof Committee Hansard, 14 October 2016, p. 1.

31 The Hon.
31 The Hon.

Mr Christian Porter, Minister for Social Services, House of Representatives Hansard, 31 August, p. 104.

32 Mr Peter Davidson, Senior Advisor, Australian Council of Social Service, Proof Committee Hansard, 14 October 2016, p. 8.

33 Children and Young People with Disability Australia, Submission 13, p. 4.

34 Explanatory memorandum, National Disability Insurance Scheme Savings Fund Special Account Bill 2016, p. 1.
13 2.38 Both CYDA and Young People in Nursing Homes Alliance (YPNHA) raised concerns that the control over the fund given to the Minister was at odds with the shared responsibility structure between jurisdictions of the NDIS governance framework.35 2.39 Another concern raised by multiple submitters, was that the creation of a special account controlled by a government minister was moving the NDIS away from the recommendation of the Productivity Commission that the NDIS be managed as a social insurance scheme: To be a viable social insurance scheme, the NDIS needs to have predictable and secure revenue sources.
The fact that the Bill enables the Minister alone to decide deposits to the fund; and the PM and Cabinet to make discretionary payments to the fund, make this a poorly designed long term funding mechanism for the scheme.

A related problem with the fund as described in the Bill is that it casts the NDIS as a program of the Minister rather than a truly independent scheme.

The Bill thus makes the scheme vulnerable to the political ebb and flow future governments may confront.
This is one of the key reasons the Productivity Commission recommended an insurance model that would be free of the budget related political tussles that plagued the old disability system.36 2.40 The AND also raised concerns with ministerial discretion for managing the account, stating that the proposed bill does not contain any 'legislated consultation provisions with groups that may be negatively affected by such decision.'
The AND also raises questions as to whether such decisions would be subject to review.37Once savings are identified across the portfolios through government decision-making processes, if the bill were enacted the Minister would have responsibility, as manager of the fund, for the mechanism by which credits are made to the special account.
2.41 However, in its submission, the Department outlined that the Minister does not retain sole decision-making discretion for making credits to the fund, which are made through a ministerial determination 'in line with Government decisions.
'38 2.42 Furthermore, the committee understands that the proposed fund would be subject to the Public Governance, Performance and Accountability Act 2013, which sets out the entire Commonwealth.39 internal governance arrangements that sit across the 35 See Submission 13, p. 4 and Submission 14, pp 2–3.

36 YPNHA, Submission 14, p. 3.

37 Australian Network on Disability, Submission 3, p. 1.

38 Department of Social Services, Submission 9, p. 3.
39 See discussion with ACOSS, Proof Committee Hansard, 14 October 2016, p. 10.

14 Committee view Evidence presented to the committee sets out the value of establishing the 2.43 proposed special account.

2.44 It is the committee's view that concerns about where savings will be made, although important, do not reflect or address the purpose of the bill: namely, establishing a mechanism by which funding intended for the NDIS is secured to be available for that purpose, when and as needed.
The committee notes that savings decisions are made separately from decisions on funding distribution.

This bill does not, in any discernible way, link savings in social services areas to NDIS funding.

Instead, to meet future financial commitments to the NDIS, ensure that NDIS funding is managed in a transparent and quantifiable way, and mitigate the risk of unspent money being returned to consolidated revenue prematurely, as currently occurs.
the bill would assist the Commonwealth The committee is of the view that this legislation presents a significant step 2.45 toward ensuring that NDIS funding is both adequate and sustainable.

Recommendation 1 2.46 The committee recommends that the bill be passed.

Senator Jonathon Duniam Chair Labor Senators' Dissenting Report Labor Senators on this committee reject the recommendations contained in the 1.1 majority report.
Labor Senators also reject the statement that 'evidence presented to the 1.2 committee sets out the value of establishing the proposed special account'.

This legislation is based on the false premise that Labor did not fully fund the 1.3 NDIS in Government.

The NDIS is already full funded.

1.4 This plan included increasing the Medicare Levy by 0.5 percentage points to two per cent.
Together with the contributions from State and Territory governments, and other savings measures, these measures covered the cost of the NDIS for ten years.

These saving measures included: $6.5 billion in reforms to the Private Health 1.5 Insurance Rebate; $6.0 billion in retirement income reforms; and $20.6 billion in other long term savings.
These long term savings included: changes to tax concession for fringe benefits; changes to tax concessions for net medical expenses; changes to the indexation of tobacco excise; and increases to import processing charges.

From the 2013-14 Budget papers: Meeting the costs of DisabilityCare Australia (a) Selected long-term savings from 2013-14 Budget and 2012-13 MYEFO.

(b) Net of Dental Health Reform Package expenditure.
Concerns about funding for the special account 1.6 Submissions to the committee raised concern about the savings that will go into the Special Account, in particular that they will come from cuts to payments and services for vulnerable Australians.
1.7 As stated in the report in paragraphs 2.12 to 2.17, many stakeholders, including ACOSS, CYDA, QAI, AND and Tandem raised concern about the savings 16 that have already been identified to go into the fund and their impact on people with disability, carers and low income households.

Labor Senators do not believe that these concerns, from a range of 1.8 stakeholders, should be ignored.
Concerns about the need for a special account 1.9 Evidence provided to this inquiry clearly demonstrated the clear lack of purpose for the proposed NDIS Savings Account beyond a political agenda from the Government to make the case for cuts within the social services portfolio.

1.10 During this inquiry the Government referring to a 'shortfall' in funding to the NDIS however this ignores the fact that consolidated revenue is used to fund Government expenditure in accordance with their priorities.
This was confirmed by Departmental officials in the hearing.

1.11 Many stakeholder submissions to the inquiry overwhelmingly rejected the establishment of this special account, citing the clear lack of purpose as their top concern: • • • "It is not obvious why this new fund is needed.
Its purpose, apart from the generic one of funding the NDIS, is not clear and we don't believe it should be supported in its present form" Peter Davidson – ACOSS "The Alliance does not support the Savings Fund as constructed in the bill… the notion of a funding shortfall portrayed in the bill and Ministers speech is actually concerning and perplexing" – Alan Blackwood – Young People in Nursing Homes National Alliance "It is believed that the creation of this Special Account… places essential disability services and supports as non-core business of the Australian Government, with their full funding being dependent on other budget savings measures identified by the Government of the day" Stephanie Gotlib – Children and Young People with Disability These submissions outline significant concerns with this bill and the political 1.12 games being played with a significant social reform like the NDIS.
Concerns about the Minister's discretion 1.13 As noted in the report, stakeholders raised concern about the level of discretion the Minister will have in relation to the funding of the NDIS.

1.14 As stated by ACOSS in their submission: The Minister for Social Services will be solely responsible for policy and management of the fund, which gives greater control to the Commonwealth and removes independence from the management of part of the Scheme's funding base.
This has rightly caused concern amongst the disability sector, as a core part of independent management of is Commonwealth and State government funds by the NDIA.

In addition, the funding cap sends a message that funding for the NDIS could be restricted, and consequently services and supports made available under the scheme would be limited.
There is already a level of unease amongst the the NDIS the 17 community and the disability sector that means-testing and tightening of the definition of 'reasonable and necessary' supports could take place if the scheme is inadequately funded.1 Labor Senators strongly agree with the weight of evidence presented through 1.15 the course of this inquiry, that the bill be rejected.

This legislation attempts to create a smokescreen for further harmful cuts 1.16 within the Social Services portfolio.
1.17 The establishment of a Special Account indicates the funding of the NDIS is non-core business of the Government.

It makes the future funding of the NDIS uncertain especially given its reliance on cuts that have not and may not pass the parliament.

The bill itself does nothing to meet the stated purpose of the legislation, 'to 1.18 assist the Commonwealth to meet its funding obligations in relation to the NDIS'.

1.19 The creation of this fund is just a mechanism.
There is no fund raising element to this bill.

As the report of the committee states at paragraphs 1.7 and 1.8, credits will come from other decisions of the Government and this proposed fund would sit within the Consolidated Revenue Fund.

Recommendation 1.20 Labor Senators recommend that the Senate reject the National Disability Insurance Scheme Savings Fund Special Account Bill 2016.

Senator Sam Dastyari Senator Murray Watt 1 ACOSS, Submission 11, p. 2.
18 Australian Greens Senators' Dissenting Report Introduction The Australian Greens have concerns about the National Disability Insurance 1.1 Scheme Savings Fund Special Account Bill 2016 (the bill).

1.2 While the Australian Greens are wholly supportive of a well-funded National Disability Insurance Scheme (NDIS), we do not want to see the most vulnerable in our society further disadvantaged through cuts to the Social Services portfolio to fund the NDIS.
It is unacceptable to take from one group of vulnerable people to fund another group of vulnerable people and in this instance within a group of vulnerable people.

The Government is trying to push through its agenda of cutting income support under the guise of funding the NDIS.

1.3 We question whether there is a need for this special account and we also have concerns about the discretion the bill provides to the Minister for Social Services (the Minister).
The review into the operation of the special account, if established, needs to happen sooner.

The need for a special account The majority committee report notes that the necessity for this special account 1.4 was questioned in a number of submissions.

The Children and Young People with Disability Australia (CYDA) 1.5 submission said: Because the NDIS will support the realisation of Australia's human rights obligations, it is critical to recognise the Scheme as a core area of government spending.
This was acknowledged by the Productivity Commission into Disability Care and Support, which recommended that the "costs of supporting people with significant disability from year to year through the NDIS should be viewed as a core funding responsibility of government and met from claims on general government revenue."

Inquiry The need for a 'special account' in addition to the DisabilityCare Australia Fund to hold funds for the NDIS is therefore unclear.
It is CYDA's understanding that this is not a typical funding arrangement for other areas of government such as health or education.

Current special accounts cover a broad range of policy area but are typically created for more specific programs.1 1.6 The Australian Greens are not convinced that this separate account is required.

The funding for the NDIS should not be dependent on cuts in other areas of Government spending.

1 Children and Young People with Disability Australia, Submission 13, pp 3–4.
20 The Minister's level of discretion 1.7 Submitters and witnesses to the inquiry indicated concern about the level of discretion assigned to the Minister in managing the proposed special account.

These concerns were touched on in the majority committee report.
The Australian Council of Social Service (ACOSS) said in its submission to 1.8 the inquiry: The Minister for Social Services will be solely responsible for policy and management of the fund, which gives greater control to the Commonwealth and removes independence from the management of part of the Scheme's funding base.
This has rightly caused concern amongst the disability sector, as a core part of independent management of is the NDIS Commonwealth and State government funds by the NDIA.2 the 1.9 Young People In Nursing Homes National Alliance said in its submission: A related problem with the fund as described in the Bill is that it casts the NDIS as a program of the Minister rather than a truly independent scheme.

The Bill thus makes the scheme vulnerable to the political ebb and flow future governments may confront.
This is one of the key reasons the Productivity Commission recommended an insurance model that would be free of the budget related political tussles that plagued the old disability system[.
]3 1.10 As CYDA said in its submission: The creation of the NDIS Savings Fund controlled by the Minister therefore substantially alters the existing arrangements regarding the role of the NDIA Board and the shared responsibility arrangements between the jurisdictions.4 1.11 The Australian Greens are concerned that if this bill is passed in its current form that the Commonwealth, and specifically the Minister, would have more control over the NDIS than was originally intended.
Recommendation 1 The Australian Greens recommend that if the bill proceeds that it be amended to allow additional oversight of the proposed special account by the Council of Australian Governments Disability Reform Council.

Funding the special account 1.12 As mentioned in the majority committee report, the 2016–17 Federal Budget outlined $2.3 billion of savings which could be credited to the special account.

2 3 4 Australian Council of Social Service, Submission 11, p. 2.
Young People In Nursing Homes National Alliance, Submission 14, p. 3.

Children and Young People with Disability Australia, Submission 13, p. 4.

Approximately $1.6 billion of the savings identified are to come from cuts to income support payments, if they pass the Parliament.5 1.13 One of the savings earmarked for the special account in the 2016–17 Federal Budget, specifically cutting the backdating of the Carers Allowance for new claims, passed the Parliament in the Budget Savings (Omnibus) Bill 2016.
1.14 As the Australian Council of Social Service (ACOSS) said in its submission to the inquiry: 21 A proportion of its funding will be derived from moving up to 90,000 Disability Support Pensioners from the Disability Support Pension (DSP) onto Newstart Allowance after subjecting them to medical reviews.

ACOSS strongly opposes linking savings in the area of social security for people with a disability to funding of the NDIS, not least because it creates a false economy.
Moving people from DSP onto Newstart will result in them losing $175 per week and plunge them into poverty.6 1.15 As PWdWA said in its submission: Our biggest concern with this legislation is that it is focused on finding savings within the Social Services portfolio to put aside money for the NDIS.

The explanatory memorandum clearly states in its first dot point that credits to the account will come from portfolio savings identified by the Minister for Social Services.
It also clearly states that the sole responsibility for the policy and management of the account will be in the hands of the Minister for Social Services.7 1.16 While the view outlined in the majority committee report is that 'the proposed legislation does not reflect or establish a link between savings in any particular portfolio area and funding for the NDIS',8 the Australian Greens disagree with this assertion and note that there is no mechanism in the legislation to prevent current proposed cuts or future proposed cuts from the Social Services portfolio being channelled into the account.
It also appears that there is no mechanism in the legislation to ensure future 1.17 monies are taken from portfolios that earn money or are in surplus.

As PWdWA said: This special savings account seems to be trying to make the Social Services portfolio stay within some budgeted range without affecting other areas like increasing corporate taxation.
This shows a callous disregard for the social safety net we have in Australia and a lack of understanding of the point of taxation to support our social safety net.9 5 6 7 Department of Social Services, Submission 9, p. 3.

Australian Council of Social Service, Submission 11, p. 1.

People With Disability (WA) Inc., Submission 1, p. 2.

8 Majority Committee Report, p. 9.

9 People With Disability (WA) Inc., Submission 1, p. 3.
22 1.18 Additionally, there is no explanation of what will happen if proposed savings earmarked for the fund are not passed by the Parliament.

CYDA said: This was the case in the amended Budget Savings (Omnibus) Act 2016, which maintained access to the Energy Supplement for new Newstart recipients.
The lack of clarity around what processes are in place if identified savings are not passed again indicates that funding for the NDIS will be precarious.10 1.19 There is also concern that re-directing savings from within the NDIS is rash.
Given there have been underspends in mental health packages, Community Mental Health Australia said in its submission: … until there is a definitive understanding of and information available on why there has been an underspend, redirecting this funding elsewhere – as could occur through this Bill – from mental health to other areas would be premature and have potentially negative consequences.

Any decision made on this must be informed by sound data, information and understanding.
Otherwise stated, NDIS psychosocial disability related underspends must be quarantined and redirected for the benefit of increased understanding of the NDIS and mental health.11 The 'established and known government processes'12 for making savings 1.20 decisions and the fact that the budget savings are pooled prior to being re-allocated do not adequately address the concerns raised in the submissions to the inquiry.
The Australian Greens are deeply concerned that the Government's harsh 1.21 agenda of continuously cutting income support can be furthered in the name of funding the NDIS.

Taking money away from those who can least afford it to fund a scheme as necessary as the NDIS is harsh and unfair.
The review of 90,000 DSP recipients over three years to top up funding for the NDIS is particularly cruel as a portion of these recipients are placed onto the lower Newstart payment and forced further into poverty as a consequence.

Recommendation 2 The Australian Greens recommend that if the bill proceeds it be amended to include strict guidelines on where future monies for the special account can come from.
Review of the fund's operation 1.22 In its submission to the inquiry, ACOSS said: The Bill provides for a review of the operation of the fund before 2027.

Waiting for up to ten years before reviewing what appears to be a key part 10 Children and Young People with Disability Australia, Submission 13, p. 5.

11 Community Mental Health Australia, Submission 2, p. 4.

12 Majority Committee Report, p. 9.


23 of the NDIS to ensure it complies with the NDIS Act is too long and could lead to perverse outcomes.13 The Australian Greens are concerned that the review into the operation of the 1.23 special account could be put off for up to 10 years.

There is a need for regular review and oversight to ensure that the special account, if established, is working as it should.
If this bill is successful, the Australian Greens want to see the review of the fund undertaken within five years.

1.24 We are also concerned that there is no requirement for the review's report to be tabled in the Houses of Parliament or even published publicly.14 Recommendation 3 The Australian Greens recommend the bill be amended to provide the review of the operation of the special account take place before 2022, and that the report of the review be published and tabled in both Houses of Parliament.
Recommendation 4 The Australian Greens do not support the bill in its current form.

Senator Rachel Siewert 13 Australian Council of Social Service, Submission 11, p. 2.

14 Paula Pyburne, National Disability Insurance Scheme Savings Fund Special Account Bill 2016, Bills Digest No.

1, 2016–17, p. 7.
24 APPENDIX 1 Submissions and additional information received by the Committee Submissions People With Disabilities WA Community Mental Health Australia Australian Network on Disability Activ Foundation Queensland Advocacy Incorporated Tandem Integrated disAbility Action National Disability Services Department of Social Services 10 Suncorp 11 Australian Council of Social Service 12 13 Private Mental Health Consumer Carer Network (Australia) Ltd Children and Young People with Disability Australia 14 Young People In Nursing Homes National Alliance 15 Disabled People’s Organisations Australia 26 Answers to Questions on Notice 1 Answers to Questions taken on Notice during 14 October public hearing, received from National Disability Services, 18 October 2016 2 Answers to Questions taken on Notice during 14 October public hearing, received from Children and Young People with Disability Australia, 19 October 2016 3 Answers to Questions taken on Notice during 14 October public hearing, received from Queensland Advocacy Incorporated, 20 October 2016 4 Answers to Questions taken on Notice during 14 October public hearing, received from Department of Social Services, 27 October 2016 Correspondence 1 Correspondence clarifying evidence given at 14 October public hearing in Canberra, by Department of Social Services, recieved 27 October 2016.
APPENDIX 2 Public hearings Friday, 14 October 2016 Parliament House, Canberra Witnesses National Disability Services BAKER, Dr Ken, Chief Executive Australian Council of Social Service DAVIDSON, Mr Peter Andrew Geoffrey, Senior Advisor Queensland Advocacy Incorporated PHILLIPS, Dr Emma, Systems Advocate Children and Young People with Disability Australia GOTLIB, Ms Stephanie, Chief Executive Officer Young People in Nursing Homes National Alliance BLACKWOOD, Mr Alan, Policy Director People with Disabilities (Western Australia) Inc JENKINSON, Ms Samantha, Executive Director Disabled People's Organisations Australian SANDS, Ms Therese, Director Department of Social Services HAND, Ms Felicity, Deputy Secretary McDEVITT, Ms Helen, Group Manager, NDIS Transition Oversight MOSES, Ms Jillian, (Former) Branch Manager, Financial Policy and Performance, NDIS Transition Oversight Group