Christian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | Hansard source

Thank you for your protection, Mr Speaker. The claim that enough savings were available to cover that half of the Commonwealth's spending and that they were clearly identified is simply not true. Before we were interrupted, we were speaking about a budget glossy which made a claim that would have amounted to an extra $2.4 billion of savings in 2019-20, and it labelled that $2.4 billion as 'other long-term savings'. These other long-term savings have never been properly identified in any meaningful way. They certainly were never identified in any budget paper that linked them in any way to the NDIS. In Senate estimates, when asked whether these measures could be listed in detail, the Treasury response was: 'The short answer is no.'

The second reason why the claims of the members opposite are false is that of course the golden rule of public finances is that, where a genuine budget saving is made, it can only be spent once. It can either be spent on deficit reduction or on some other specific purpose. Labor announced its supposed NDIS funding in the 2013-14 budget, but many of the savings measures that it now points to had actually been announced long before that budget and assigned to other purposes, with no mention of the NDIS whatsoever. In order words, Labor grabbed a handful of often previously announced and allocated savings and, after the fact, tried to pretend that they were exclusively assigned to the NDIS to make it look like it was fully funded.

In fact, the final speaker from members opposite made note of one of those savings as the private health insurance reforms, and that is worth some critical investigation. Savings from the private health insurance reforms which are now claimed to have been set aside for the NDIS—indeed, in the last speech from members opposite—would have been estimated to account for $1.1 billion worth of funding in 2019-20. Those were first announced in a media release on 20 October 2012 and included in the 2012-13 Labor MYEFO. Prior to the budget, they were committed to and supposedly funded the NDIS.

These private health insurance savings which are now claimed as NDIS savings were first described as partially offsetting the dental health reform package announced on 29 August 2012. Then, in the same 2012-13 MYEFO, Wayne Swan, the member for Lilley, said of these and other MYEFO savings that they were being used 'to return the budget to surplus in 2013 and beyond' and said:

The Government has made substantial targeted savings, ensuring that Australia's public finances remain strong.

There is no mention whatsoever in the 2012-13 Labor MYEFO that savings from private health insurance reforms would help pay for the NDIS. So the 2012-13 MYEFO had $1.1 billion in savings that are now claimed as being for the NDIS but in the budget paper were either dedicated to pay partly for dental health reforms or deficit reduction. So, first, Labor claimed that this measure would pay for dental health initiatives and, simultaneously, Labor claimed that it would help reduce the deficit and then later Labor claimed that it would pay for the NDIS. So, if there is a golden rule of budgets that you can only spend a dollar once, Labor sees no problem with spending those dollars from private health insurance reforms three times over.

Savings from changes to retirement incomes is another head of savings which has been mentioned. They are now claimed to have been set aside for the NDIS and estimated to account for $0.9 billion of funding in 2019-20. They were first announced by the member for Lilley on 5 April 2013, prior to the budget that committed to and supposedly funded the NDIS. These changes to retirement incomes were described upon announcement in the relevant media release in the following terms:

Australians are living longer and in this context the superannuation system needs to be fair and it needs to be sustainable.

There was no mention of the NDIS in that media release and there was no mention of linking the savings to the NDIS in the 2013-14 budget papers that later sets out these measures. The budget papers and the media release clearly suggest that the savings were designed to allow for a sustainable superannuation system and so contribute to budget repair. Also notable is the fact that one of those measures was never passed by Labor and was not proceeded with after the 2013 election, because the complexity and compliance costs associated with the initiative were extreme and made the proposed saving largely undeliverable.

So, when savings measures were announced, Labor were still committed in those days to a surplus and so committed the funds to reducing the deficit, not merely to more spending. And when the savings were announced Labor did not mention the NDIS at all. Savings Labor now claim they made up to help fund the NDIS went into consolidated revenue and were never set aside to fund the NDIS. They were instead directed at an attempt to get back to surplus and ended up being washed away by Labor's increasing cumulative budget deficits.

Third, it is necessary to note that any serious hypothecation of savings in an area of the size and significance of the NDIS requires a specific fund to be created to protect those savings from any other uses, such as deficit reduction. This is precisely what stops the funds being washed away by growing deficits that were not predicted at the time that the savings were made. In fact, it is notable on this point that, at the time the NDIS appeared in the federal budget in 2012-13, the member for Lilley predicted a surplus of $1.5 billion in 2012-13, which in fact turned into a deficit of $18.8 billion.

Labor did set up a specific fund, the DisabilityCare Australia Fund, to fund the NDIS. It is notable, however, that only the additional Medicare levy proceeds were invested into that fund. No other savings Labor made were ever set aside in the DCAF for future use on the NDIS. At the time of passing the legislation to increase the Medicare levy and establish the DCAF, supported by the coalition, the member for Lilley gave the impression, of course, that this locked in NDIS funding, claiming:

With the increased Medicare levy's passage through the Senate, the lasting future of DisabilityCare Australia will be left in no doubt.

How can it possibly be the case that you can claim to have clearly identified sources of funding when one of the biggest sources of revenue, representing billions of dollars, is described simply and without any further identification as 'other long-term savings'? Labor cannot and will not identify what they are. How can Labor bank billions of dollars of savings that were previously allocated to other purposes such as budget repair and other specific expenditure?

In the real world, the end result has been that the coalition will have to find billions of dollars worth of real and clearly identified savings and place them in a protected account which can only be used for the purposes of funding the NDIS. This savings fund is the mechanism for securing and protecting that funding shortfall and does not require borrowings for the NDIS that would need to be paid back by future generations. It is proof of the responsible and sustainable way that this government follows through on its NDIS commitment. Effectively, the government will, over successive years, put aside savings that are clearly identified, quantified, defined and protected, so that the annual funding gap from the 2019-20 NDIS is met within existing funding. By clearly identifying savings in the savings fund, we will provide an enduring response to the concerns raised by the disability sector in relation to how future governments will fund the shortfall for the NDIS.

In fact, the government has already announced more than $5 billion in savings over the forward estimates that, once realised will be credited to the savings fund when established. Whilst this will ensure the $4.1 billion funding gap in 2019-20 will be met, further deposits will of course need to be made over coming financial years to ensure that we will fill Labor's NDIS funding gap—because it grows to over $7 billion each and every year.

The bill gives the government the flexibility to identify savings from any portfolio, not just the Social Services portfolio. That approach will ensure that many areas of government can contribute to supporting people with a disability. In bringing forward this bill to create the National Disability Insurance Scheme Savings Fund Special Account, the government is producing a robust and enduring solution to meet the Commonwealth's funding commitments for the NDIS.

It is important here to recall the original recommendations of the Productivity Commission. The Productivity Commission itself recommended:

The Australian Government should direct payments from consolidated revenue into a 'National Disability Insurance Premium Fund'—

using 'a legislated formula to achieve transparency and certainty'. Interestingly, at the time of the Productivity Commission inquiry, the Australian Council of Social Service also noted:

… there must be a clear "fund" specifically for the proposed disability scheme.

The government urges passage of the National Disability Insurance Scheme Savings Fund Special Account Bill 2016, as recommended by the Senate Community Affairs Legislation Committee. In coming to this position, the committee noted:

The committee is of the view that this legislation presents a significant step toward ensuring that NDIS funding is both adequate and sustainable.

It is critical that the Commonwealth manages its funding in a way that is transparent and quantifiable and meets the Commonwealth funding commitments to ensure the NDIS is fully funded. The government is of course 100 per cent committed to delivering and funding the NDIS in full. We have supported the NDIS from day one and this savings fund demonstrates that ongoing commitment. I commend the bill to the House.

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