Mitch Fifield (Victoria, Liberal Party, Assistant Minister for Social Services) Share this | Hansard source

Colleagues may be aware that late last year I released the key elements of the first quarter results of the NDIS trial sites, which found that planned completions were taking longer than expected, with about 921 people in the scheme—around half the target number. The first quarter results also found that package costs were running at $46,290, 30 per cent higher than the modelled average costs of $34,969.

Today, in the interests of transparency, with my colleagues on the ministerial COAG disability reform council, we are releasing the second-quarter results, which show, firstly, that average package costs have fallen from the first-quarter figures down to $40,466. While this trend is positive, I should inform the Senate that these figures remain 15 per cent above the budgeted average cost. Planned completions are now at 2,586, which is half the target for this stage of 4,340. Secondly, the report indicates that it is likely that the budget by the previous government for the trial sites underestimated the cost to the tune of nearly $400 million and this was due to errors in the bilateral agreements negotiated by the previous government. The difference between the expected annual cost in 2013-14 to 2015-16 and the actuarial baseline model is $392.1 million, to be precise. Those bilateral agreements negotiated by the previous government provide that the Commonwealth is liable for all cost overruns. Errors of this sort are far more likely when a political timetable to achieve launch prior to an election is pursued, rather than the more prudent timetable recommended by the Productivity Commission.