Purpose of the bill
The National Disability Insurance Scheme (NDIS) is a nationally-based scheme with funding and governance shared between the Commonwealth, State and Territory Governments. The NDIS was established by the National Disability Insurance Scheme Act 2013 (NDIS Act).
The National Disability Insurance Scheme Amendment (Streamlined Governance) Bill 2019 (bill) was introduced in the Senate on 25 July 2019 and seeks to amend the NDIS Act to:
establish a new consultation process with states and territories on matters that require agreement;
enable the Minister to appoint members to the National Disability Insurance Agency (NDIA) Board based on the majority agreement of states and territories;
relax the consultation requirements for decisions to appoint or terminate members of the Independent Advisory Council to the NDIA; and
change the categories of NDIS rules relating to the payment of NDIS amounts and the ability of the NDIA Chief Executive Officer (CEO) to disclose information.
The proposed amendments to the NDIS Act are intended to increase certainty around the timing of administrative decisions made by the Minister, which currently require state and territory agreement.
The changes build on the recommendations of an independent review of the NDIS Act in 2015, a Productivity Commission inquiry into NDIS costs in 2017, and administrative arrangements currently in place in intergovernmental agreements between the Commonwealth, states and territories.
Amendments in schedule 1 will have nil financial impact over the forward estimates.
The bill was considered by the Senate Standing Committee for the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights. Neither committee raised concerns with the content of the bill.
Conduct of the inquiry
On 25 July 2019, the Senate referred the bill to the committee for inquiry and report by 6 September 2019.
The committee received 5 submissions and held a public hearing in Canberra on 30 August 2019. Submitters and witnesses are listed at Appendices 1 and 2.
The committee thanks all that contributed to the inquiry.
Note on references
References to the committee Hansard are to the proof transcript. Page numbers may vary between the proof and official Hansard transcript.
Current governance arrangements for the NDIS
The governance model for the NDIS is outlined in the NDIS Act:
the Minister has overarching responsibility for the NDIS and statutory powers under the NDIS Act that require consultation and agreement with the states and territories;
the NDIA administers the scheme, manages funds contributed by each jurisdiction, and approves the payment of individualised support packages;
the Board of the NDIA is responsible for the performance of the agency’s functions and sets its strategic direction; and
an Independent Advisory Council advises the Board of the NDIA.
Intergovernmental decisions on policy issues are made by the Disability Reform Council, which is a Council of Australian Governments (COAG) Ministerial Council made up of Ministers and Treasurers responsible for disability in each of the states and territories.
The NDIS Act provides that states and territories are consulted on a range of actions and decisions impacting the day-to-day operation of the scheme. This includes making NDIS rules, which provide more detail on aspects of the scheme’s operation. Aspects of the NDIA’s operations, including its Board membership, are also subject to consultation and agreement.
Productivity Commission inquiry
The Productivity Commission inquired into NDIS costs in 2017 and, in its final report, noted there had been significant delays gaining the unanimous agreement of the states and territories for new NDIS rules.
The Productivity Commission acknowledged that governance arrangements underpinning the NDIS needed to be ‘sufficiently flexible’ to enable the NDIA and governments to respond quickly to address circumstances that threaten the financial sustainability of the scheme.
It also recognised the importance of state and territory governments’ continued input to changes that would impact the boundaries of the NDIS. In particular, decisions relating to Category A NDIS rules which, if changed, could expose states and territories to increased costs relating to non-NDIS disability supports.
The Productivity Commission recommended amending the NDIS Act to reduce the time taken to implement or amend NDIS rules. However it suggested the requirement for unanimous agreement on Category A NDIS rules be retained.
Implementation of streamlined governance arrangements
Since the Productivity Commission’s 2017 NDIS costs inquiry, streamlined governance arrangements have been implemented administratively by the Commonwealth, states and territories.
In November 2017 the COAG Disability Reform Council agreed to a 28 day consultation period initiated by the Commonwealth, after which time, a state or territory governments’ failure to respond could be taken as agreement.
This process is now contained in the intergovernmental agreements between the Commonwealth, states and territories, with the exception of Western Australia, yet to move from a transitional to a full-scheme agreement.
The proposed changes in the bill would effectively make into law the current administrative arrangements for intergovernmental consultation with respect to specific decisions and actions by the Minister.
Provisions of the bill
The bill introduces a definition for ‘host jurisdiction Minister’ and replaces the words ‘state and territory’ with ‘host jurisdiction’ in section 127. This reflects that all states and territories are now specified by the Minister as host jurisdictions as of February 2016.
Consultation with host jurisdictions
The bill introduces a new consultation process for certain decisions and actions of the Minister whereby:
the Minister must give notice to a host jurisdiction Minister of a proposed course of action and request agreement within 28 days from the day notice was given;
within that 28 day period, the host jurisdiction may seek an extension of time of 90 days to provide their response; and
where no response is provided within the 28 days (or any extended period), the host jurisdiction is taken to have agreed the proposed decision or action.
The changes would enable the Minister to proceed with a decision where no response is received from a state or territory. The 28 day consultation period also gives states and territories the opportunity to comment on a proposed decision or course of action and seek an extension of time if needed.
The new consultation process would apply to the following actions or decisions by the Minister currently requiring state and territory agreement:
directions to the NDIA relating to the performance of its functions and any strategic guidance given to the NDIA Board;
legislative instruments setting out what fees may be charged by the NDIA and the method of working out those fees;
the appointment, termination and setting of terms and conditions for members of the Board of the NDIA;
legislative instruments prescribing what information is to be included in the NDIA’s annual and quarterly reports;
the delegation of the Minister’s power to make NDIS rules to the CEO of the NDIA; and
making (or amending) all NDIS rules and regulations.
The bill introduces a requirement that the Minister be satisfied he or she has the majority support of all host jurisdictions for an appointment to the Board of the NDIA, rather than the current requirement for unanimous support.
The Minister can still appoint a member of the Board, other than the Chair, where they do not have majority support from the states and territories. However, they must wait 90 days from the day notice was given of the proposed appointment decision. This allows the Minister to consider and negotiate any alternative appointments or arrangements.
Independent Advisory Council
For appointments to the Independent Advisory Council, the NDIS Act currently requires unanimous agreement. There is also provision for the Minister to make an appointment after 90 days, if it is not possible to get unanimous agreement. The bill repeals these provisions, and replaces them with a requirement that the Minister consult all host jurisdictions.
To terminate a member of the Independent Advisory Council, or set their terms and conditions, the bill replaces the current requirement for majority agreement with a requirement to consult with all host jurisdictions.
The NDIS Rules are legislative instruments, made by the Minister, which set out in detail how aspects of the scheme are to operate.
To make or amend NDIS rules, different levels of consultation and agreement are required:
Category A rules require the unanimous agreement of host jurisdictions;
Category B rules, which relate specifically to a host jurisdiction, require the relevant host jurisdiction’s agreement;
Category C rules require majority agreement; and
Category D rules require consultation only.
The bill proposes the following rules change to Category D rules, effectively relaxing the current requirements for consultation and agreement:
rules relating to the payment of NDIS amounts; and
rules relating to the CEO’s power to disclose information to others.
Rules relating to NDIS payments
NDIS payments must be paid in accordance with rules set by the Minister. This includes rules for making NDIS payments into the bank account of a participant or the person managing their funding.
The bill changes this rule from Category C to Category D, with the effect that any new rules or changes to rules of this kind would require consultation only rather than majority agreement.
Rules relating to the CEO’s power to disclose information
The NDIS Act contains strict rules on the handling of information about a person by the NDIA, and unauthorised access, use or disclosure of information constitutes an offence under Part 2 of the Act.
The CEO may disclose information to certain persons or entities identified in the NDIS Act. The Minister may specify who the CEO can disclose information to and for what purpose.
The bill would change this rule from Category A to Category D, requiring consultation only, rather than the current requirement for unanimous agreement.
Issues raised in evidence
The committee heard broad support for efforts to improve the governance arrangements underpinning the NDIS.
However some submitters raised concerns the bill could undermine states and territories’ role in the scheme and unduly centralise decision-making authority for key NDIA appointments.
The committee also heard concerns about the timing of the bill, and the suggestion legislative change should be delayed pending the outcome of a review of the NDIS Act and new NDIS Participant Service Guarantee currently being undertaken by Mr David Tune AO PSM (the Tune Review). The review was announced by the government on 12 August 2019 and is due to report at the end of 2019.
States and territories’ role
People with Disabilities Australia expressed concerns the proposed consultation requirements would undermine the equal partnership of the Commonwealth, states and territories underpinning the NDIS.
The Young People in Nursing Homes National Alliance submitted that the characterisation of states and territories as ‘host jurisdictions’ in the bill misrepresents and underestimates the role of the jurisdictions under the current full scheme arrangements.
The Department of Social Services (department) gave evidence to the committee that all states and territories had been consulted on the bill, and that the Commonwealth had their full support for the proposed changes.
The department also suggested that the proposed changes would not change the requirement for states and territories to actively participate in decision making under the NDIS Act, commenting that:
They must still engage, in the sense that all of them are approached and all of them have a time frame to respond.
In a submission supporting the bill, the Northern Territory Government noted that the changes did not give the Commonwealth Minister any new powers.
Decisions on appointments
The committee heard specific objections to the proposed changes to consultation requirements for appointments to the NDIA Board and Independent Advisory Council.
The Australian Federation of Disability Organisations suggested the proposed changes in the bill could unduly centralise power to appoint and terminate members of the NDIA Board and Independent Advisory Council in the Commonwealth Minister.
The committee heard from the department that the proposed changes are intended to enable decisions around board appointments to be made more expeditiously.
… this is about processes that have proved challenging in the past. I think that is recognised by the states and territories, as well as the Commonwealth. And those challenges have not necessarily been productive. For example, I understand that when a number of the current members of the board were appointed there was majority support for all appointments but there was not support from a couple of states. It took 13 months to get through that process to make board appointments. I would suggest that is not a sensible way to proceed – and these amendments, now supported by the states and territories, are aimed at avoiding that circumstance in the future.
The Northern Territory Government submitted that it would continue to expect an appointment to the NDIA Board was not made contrary to the majority of states and territories having formally responded to advise that an appointment was not supported.
Broader review of governance arrangements
Advocacy groups universally suggested that the bill not be passed until the states and territories’ role in the NDIS governance model could be more comprehensively examined through the Tune review.
Some submitters suggested a broader review and reform of NDIS governance was needed to look at ways to improve the interface issues between the NDIS and other service systems.
The committee heard from the department that the changes proposed in the bill were not expected to be impacted by the Tune review:
The Tune review is particularly focused on participant-facing aspects of the legislation… Indeed, these amendments don’t change participant rules, participants’ experiences, who gets access or any of that, I think they can proceed without any concern that they might subsequently need to be amended again as a result of the Tune review.
The department noted the scope of the changes in the bill do not go to the entire governance of the scheme, and that other governance issues, including issues relating to the interface with the NDIS, are being addressed through intergovernmental agreements and the Disability Reform Council.
The committee heard that the Productivity Commission supported the proposed changes as they relate to the recommendations in their 2017 inquiry, and suggested the bill should proceed ahead of the outcome of the Tune review.
… there is no perfect answer to this issue of trying to juggle engagement, consultation, agreement – but it’s about getting people to respond in a timely fashion. We think that what’s in the bill reflects very well the issue we were trying to grapple with two years ago.
The committee acknowledges the concerns raised by submitters about the potential impact of the bill on the shared responsibility of the Commonwealth, states and territories underpinning the NDIS.
The committee considers the proposed changes strike the appropriate balance between the need for states and territories to be consulted and involved in decisions that impact them, and ensuring the Minister’s ability to act in a timely and responsive manner on issues impacting the day-to-day operation of the scheme.
The committee also acknowledges the calls for a broader review of the governance arrangements for the NDIS and consideration for further legislative amendments to address NDIS interface issues and improve participant experiences gaining access to NDIS supports.
The committee considers that the changes proposed in the bill are modest but helpful improvements to the governance arrangements for the scheme, and should proceed notwithstanding the Tune review that is currently underway.
The committee is of the view, however, that there may be scope for the Tune review to consider some of the issues with the governance arrangements for the NDIS raised in the course of this inquiry.
The committee recommends that the bill be passed.
Senator Wendy Askew