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NDIS too complex, stubborn to succeed, says report

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Nearly five years after the National Disability Insurance Scheme was introduced in Queensland, the market-based model is struggling.

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The Palaszczuk Government directed the Queensland Productivity Commission to undertake an inquiry into the operation of the NDIS in the state. The scheme now has nearly 79,000 Queensland participants and over 5,000 active registered providers.

In its draft report, quietly released on the eve of the state budget and ahead of the commission being abolished, the QPC called for the NDIS to shift focus from transitioning people into the scheme to better catering for existing participants.

Citing a “suboptimal market performance,” the QPC highlighted how some cohorts of people with disabilities remained under-represented and more than 40 per cent of participants were not drawing down even half of their available plan budgets for support and care.

The QPC declared the NDIS to be “insufficiently flexible, which reduces effective choice, innovation and supply options, and in some cases, creates inequitable outcomes and incentives that are inconsistent with the intent of the scheme (and a) large and sometimes disproportionate regulatory burden”.

Oversight of the NDIS was also “cumbersome and can be slow to respond,” which not only disadvantaged participants but hindered innovation and deterred new entrants to the market.

“The NDIS has multiple, sometimes conflicting, objectives—on the one hand, to provide choice and control and build capacity while, on the other, to provide consumer protections, limit supports to those that are reasonable and necessary and maintain the financial sustainability of the scheme,” the QPC found.

The QPC has proposed the NDIS essentially give the market a nudge, through better targeted incentives, less red tape, and an overhaul of governance arrangements, which could see some price caps replaced by price monitoring.

“In some cases, better market performance will require improved regulatory settings, for example, by clearly defining ‘choice and control’ and ‘reasonable and necessary supports,’ and improving regulatory processes to unlock work, learning and other participation opportunities,” the QPC found.

“In other cases, better market performance will require a measured relaxation of regulatory settings.”

The QPC has asked for feedback on its draft report and recommendations by early February.

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