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Nic Stuart | Paying for the NDIS

The need for the NDIS is acute. So is the need for aged care. Watching how the government is dealing with the two sectors provides surprising insights . . .

By Nicholas Stuart

Picture by 'Marcus Aurelius' courtesy

The biggest problem the government has today is finding money.

When Kevin Rudd inherited office in 2007 the country's finances were sound. That war chest was spent on insulating the country from the GFC - Great Financial Crisis. Unfortunately, despite successive promises to return the budget 'into the black', neither Tony Abbott or Malcolm Turnbull managed to stop money gurgling down the fiscal plug-hole. By the time Scott Morrison was confronting Covid, the government had lost all discipline and spending soared into the stratosphere.

Now the government wants to turn this around: the question is, how?

The problem it faces is that the really big areas of public expenditure are continuing to grow. The following chart (prepared for the 2020/21 budget) by the Parliamentary Library demonstrates just how out of control the spending is.

See the way after FY 2020/21 spending suddenly drops back down below $600 billion and stays low in the following years? Well guess what? It never happened. Yes, both the chart and all its careful predictions may as well have been doodles.

By October 22/23 spending had not gone down, but actually risen from $639.6bn to $650.9bn. The new (Labor) government also asked Treasury for a more realistic assessment of future expenditure. The figure that came back was a prediction that, by fiscal year 2025/26, total outgoings would be at least $731bn. Guesstimates that vary so wildly from year to year make a joke of any of forecasts, but what underlies them is critical.

The crucial point is, if we treated government like a normal person, we'd have to say it's broke. It's spending more than it's bringing in and has no realistic plan to turn that around.

That's fine - it's government. Normal rules don't apply because there's no bank manager banging at the door and threatening to repossess the house. The point is, however, that this straightened fiscal background is at work behind the scenes. There's pressure on all the big spending ministers to cut back on expenditure and this will, inevitably, affect the NDIS as well.

In this regard it's interesting to examine what's happening in an ancillary portfolio that's beset by problems: aged care. The background's simple. A Royal Commission heard excoriating evidence about repeated failure to care properly for people retirement homes. Labor, then in opposition, came up with a simple solution that sounded right. It insisted every home must have a qualified nurse on duty 24 hours a day and also insisted this would happen in June this year, a year ahead of schedule.

Perhaps the image of caring nurses attending to every aged-care resident that made this picture so powerful. Maybe the imaginary swish of starched white dresses appealed to older voters, while younger ones allowed the icon of baggy-blue professionals caring for elderly relatives to stick in their mind. Whatever the reason, it worked. Now Labor has to deal with the difficulties of solving this problem without blowing the budget.

There is, of course, a simple way to both fix these endemic problems and ensure the sector's homes have all the nurses they need. Just one thing's required to put nurses into homes, and that's money. Unfortunately there just isn't enough to go around.

Why don't nurses want to work in aged-care homes? The answer's simple. They're paid less! Why would anyone want to do a job that's sometimes far more demanding and emotionally enervating than hospital duty for less money. Unfortunately Labor didn't carve out the funding to match its trumpeted ambition.

Universal mandates sound great. They cater to our instinctive belief that fixing the aged-care system really shouldn't be that hard. This ignores the massive complexity of this multibillion-dollar industry that's being shoved in different directions by very different drivers. Any enforceable mandate was inevitably going to cause at least some short-term problems as it was bedded down. Navigating these was an issue that was going to require flexibility and re-writing the bold (and stupid, simply because it was always unenforceable) clarity of that simple election promise.

Aged Care Minister Anika Wells in happier times. Photo courtesy ALP

And that's where Aged Care Minister Anika Wells now finds herself. She's already conceded at least five percent of providers won't meet the government's target by the end-June deadline. Now additional spot fires are flaring up as other, not-for-profit organisations are making the sensible, focused decision - from their point of view - to pull out of the sector. Last month it was St Vincent's de Paul abandoning 100 residents in Tasmania; last week the Wesley Mission announced it was closing three centres in Sydney and slash another 200 aged-care beds from a consistently shrinking total. Then, on Friday, Perth-based provider Brightwater joined in to say it will close three centres, throwing out another 75 beds.

The important point is that all three of these organisations are non-profit charities. If these can't survive under the new rules, how will for-profit services ever be induced to pick up the slack? Is aged care in crisis? As the previous government found, issues in a sector like this are always complex and simplistic, sound-bite solutions rarely provide an answer. Equally, it's incorrect to search for a scapegoat. What we are witnessing is the slow work-through of a market-based system where not-for-profits are refusing to pick up the slack if they can't provide high-quality service.

From one perspective, the current situation is a disaster. From another, it's exactly how the market-based system is meant to work. How you perceive the problem depends very much on how urgently you, or your parents, need aged care.

Wells herself is very aware the system was already under extreme inflationary pressures. Factor in the usual shortage of nurses and couple this with an already tight labour market and the pressure was already building. Add a dash of regulatory tightening and a splash of sharper business focus from charities, and its difficult not to have a moment of sympathy for the minister. That's not the same as excusing her.

Wells has made some unfortunate slips as she's responded to the media blowtorch. Expecting one person to manage two portfolios as diverse as Aged Care and Sport rapidly became a problem for the previous government - it shouldn't be done. The sight of previous minister Richard Colbeck sitting at the cricket while COVID was raging through nursing homes rapidly destroyed any chance Scott Morrison had of distancing himself from that particular crisis. It's bizarre that Anthony Albanese, a supposed political professional, would repeat this mistake. Memes that destroy political careers quickly surround anyone responsible for aged-care precisely because voters will not tolerate any failure to look after older people.

The political answer is simple. Initially, Wells needs to ask to be relieved from Sport so she can commit herself full-time to working through these issues. Secondly, government needs to engage in a long-term plan to inject certainty into the sector by providing a funding model that will outlast whatever particular model has suddenly become the new fetish of management gurus. And finally, as society, we need to ask is how much we really want to pay for people who need care, whether they happen to be old or disabled - because this is the real issue.

Great. Now think of all the times you've read strident editorials where columnists have outlined simple three-point plans outlining a clear way forward. Now contrast that with how often anything's happened. Never, and the reason's simple. The difficulty is every solution either costs money or tramples over vested interests, with the result that answers keep getting postponed until some new minister (or government) gets stuck with attempting to patch together a solution.

At some point decisions have to be made and, when they are, someone will be hurt. At some point - and very probably in this budget - Albanese will admit the stage-three tax cuts won't go ahead. The sooner he does so the better. The second need is to accept the need for real reform of aged care and other financial suck-holes. The final, and most critical requirement is, however, to change the way we think about society. Money shouldn't be the driving force for allocating time, care and resources.

Just like every idealistic three point plan, it will never happen ...

Which brings us to the NDIS.

Bill Shorten, NDIS Minister

These are the massive pressures facing Bill Shorten, a minister who is genuinely engaged in attempting to re-structure the disability sector. He's already under pressure from his colleagues to cut spending so that they can find more money for their portfolios. No matter how great the need, it just doesn't seem likely that they will suddenly open their hearts, reducing their budgets while exempting disability from the slashing razor-blades.

Shorten will be speaking at the Press Club on Tuesday 18th (tomorrow). It will be interesting and informative to see how he frames the fiscal challenges he's facing.

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