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

I move:

That this bill be now read a second time.

This bill amends the National Disability Insurance Scheme Act 2013 to increase the maximum number of members of the board of the National Disability Insurance Scheme Launch Transition Agency, known as the NDIA.

Replacing the current provision for eight board members, the minister will now have capacity to appoint up to 11 members, aside from the chair. As a minor consequence, quorum arrangements for board meetings will also be clarified.

The National Disability Insurance Scheme, of course known as the NDIS, is a significant social reform, and the government has an intense focus on its design, administration and implementation.

It is a significantly complex reform, with governance shared between the Commonwealth and state and territory governments. It requires close oversight of financial sustainability, potential risks to scheme participants and providers, and delivery of the scheme across Australia.

The NDIA will be responsible for implementing the transition from trial to the full rollout of the NDIS across Australia, which, when fully established, is estimated to provide support to over 460,000 participants, with a full scheme budget of around $22 billion per annum.

Over the next four years, the NDIS will be moving into a rapid growth phase, where participant numbers will increase from 19,758 people across its trial sites as at 30 September 2015 to over 460,000 people across the country in 2019-20. As the NDIS enters the transition stage, the NDIA will commence increasing the size of its workforce, outsourcing arrangements for many NDIS functions and implementing its full scheme Information Communications Technology solution.

The NDIA board is responsible for overseeing the implementation of the NDIS and its long-term sustainability. The board manages the financial and delivery risk of the scheme, including maintaining an actuarial and insurance approach to decision making within the scheme. The board develops the NDIA's business strategies, manages risks to the organisation and the NDIS and, through its chief executive officer, handles the day-to-day management of the NDIA.

The government, along with the states and territories, has therefore reached the view that the NDIA needs a board with a broader range of skills and experience to manage the rapid increase in participants and to address the emerging challenges that come with a reform of this scale.

State and territory governments, along with the Commonwealth, have agreed that the board requires skills suited to the specific challenges of the transition phase, including strategy, risk, insurance, corporate governance and implementation, as well as experience in large enterprises of an equivalent national scale and complexity.

An independent review of the skills and experience required in the NDIA board for the transition stage found that the next iteration of the board should have strong ASX 50 or large government business enterprise level experience in operation and financial systems and controls. The review identified a need for better representation of experience in change and financial management and deep expertise in the management of insurance-based schemes.

Following this independent review and consultation with state and territory governments, the Commonwealth government has concluded that a board of eight members plus a chair does not allow for the diversity and strength required of a board that is managing the anticipated rapid increase of participants and administering a $22 billion insurance based scheme.

A larger NDIA board will ensure that it has a balance of skills, knowledge and experience in disability services, financial management and corporate governance management of insurance or compensation schemes to enable the board to meet the challenges of the next phase of the NDIS effectively.

To implement this measure, a staged approach to changing the membership of the NDIA board has been agreed with members of COAG's Disability Reform Council, to ensure continuity while also producing optimal governance outcomes during the transition to full scheme. Our view is that, until the NDIS reaches maturity, the board should consist of 11 members and a chair.

The size of the NDIA board is set out in section 126 of the National Disability Insurance Scheme Act 2013. This bill amends section 126 to change the number of members, aside from the chair, from eight to up to 11, providing the minister with the flexibility to decrease the size of the board at a point when it is considered appropriate and prudent to do so.

As a minor consequence of this change, section 138, providing for a quorum for board meetings, is also amended to ensure that a quorum is constituted when a majority of the members are present.

This government remains committed to the full rollout of the NDIS, with its attendant benefits for people with disabilities, their families, their carers, and the broader Australian community of which they are a valued part.

These changes ensure that the NDIA board overseeing this major social policy reform will have the mix and diversity of skills, capabilities and leadership to bring the NDIS to full scheme within the time frame agreed to with states and territories and within the allocated budget. I commend the bill to the House.

Debate adjourned.