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Gillard gets it right

May 1st, 2013

Ever since the Hawke government announced the “Trilogy” commitments in 1984, promising no increase in the revenue and expenditure shares of national income, Australian politics has been, in effect, a conspiracy of silence about the central issue of economic policy, that of the appropriate balance of private and public expenditure. The steady growth in demand for services like health and education has ensured that no reduction in the public sector share has been feasible, while the market liberal dogma enshrined in the Trilogy has prevented any increase.

In retrospect, it’s striking that Hawke’s commitment came just after the reintroduction of Medicare, funded (in part) by a levy on all incomes. Medicare’s success has made it politically untouchable. On the other hand, it has been assumed (though without much supporting evidence) that any increase in taxation (not matched by offsetting cuts) is politically impossible.

The Gillard-Swan government was, until yesterday, ruled by this doctrine. With their unfortunate habit of making categorical commitments out of aspirations, both Gillard and Swan had repeatedly ruled out a levy to fund the National Disability Insurance Scheme (by contrast, “conservative” state premiers like Newman were happy with the idea) But, as a recent Grattan Institute report has made clear, there is no way of meeting the needs for health and education without a substantial increase in revenue (as well as cuts in low-priority direct expenditures and tax expenditures).

So Gillard has announced a proposal for a 0.5 percentage point increase in the Medicare levy, raising $3 billion a year. Abbott has equivocated so far, but has stated his support for the NDIS, which leaves him no honest options except to go along.

If we could achieve consensus on paying for improved services through higher taxation in this case, we might finally have a serious debate about what, as a community, we are willing to pay for.

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  1. Catching up
    May 1st, 2013 at 20:27 | #1

    It is stupidity to expect governments to govern with one arm tied behind their backs.

    That is what happens, when it is politically impossible to increase revenues.

    Yes, sometimes taxes and other charges need to rise, as well as fall.

    Levies under Howard. Seems they were different

    “……….So while the ‘levy for everything government’ had massive surpluses they slugged us via levies with a summary as follows.

    1996: Gun Levy
    1997: Gun Levy
    1998: No levies
    1999: Stevedoring Levy
    2000: Stevedoring Levy, Milk Levy, East Timor Levy
    2001: Stevedoring Levy, Milk Levy, Ansett Levy
    2002: Stevedoring Levy, Milk Levy, Ansett Levy
    2003: Stevedoring Levy, Milk Levy, Ansett Levy, Sugar Levy
    2004: Stevedoring Levy, Milk Levy, Sugar Levy
    2005: Stevedoring Levy, Milk Levy, Sugar Levy
    2006: Stevedoring Levy, Milk Levy, Sugar Levy
    2007: Milk Levy..”

    http://theaimn.com/2013/05/01/the-consummate-hypocrite/#comments

  2. kevin1
    May 1st, 2013 at 21:07 | #2

    @Catching up
    Yes, thanks for reminding us that the coalition had hypothecated taxes to deal with transient issues, presumably because it provides greater political justification to its support base. The hypothecation principle applied to increasing the Medicare levy for the (permanent) NDIS is even more relevant because it is an insurance premium ie. covers the cross-class risk of catastrophic and largely unavoidable events changing the life opportunities of individuals and, by extension, their families. Just because your house doesn’t burn down is not an argument against house insurance!

    I’ve just seen Gillard and co on TV announcing that they will increase Medicare levy by half a percent which is allocated to NDIS. As a parent of an autistic and intell. disabled child, I felt that listening to her, Wayne Swan and Jenny Macklin talk about was convincing evidence that they do “get it” about the consequences on people’s lives of profound disability, and they are keen to stand up and address the issue. I saw Swan at a disability conference about 10 years ago when he was Opp spokesperson on this issue – the personal stories are very compelling.

    Whether Abbott will renege on his support who knows, so far he says Yes and this may back him into a corner. I really never thought these concerns would become a mainstream issue but it seems that exposure to people with disability and their families has really struck a chord with many pollies. This is about restoring civil rights to a marginalised group of citizens to promote their participation as equals in our community.

    It’s all amazing to me, but profoundly positive in its implication for the responsiveness of our much derided political system. (Childless) Gillard was asked about whether its the right time, and she answered if you were one of these families, when would you think the “right time” is. According to the govts’ numbers, 400,000 people are affected by this decision (2% of the population) yet it has become a front and centre issue, with cross-parliamentary support. This suggests that “majoritarian” influences have been ameliorated by the pervasive presence of disabled people in public spaces and personal networks, and provoked a generosity of spirit towards them. It is touching that so many people see these people out and about and respond by engaging with them rather than reacting with fear when they were “the other” locked up in the benevolent (read “cruel”) institutions of days gone by. This has profound optimistic implications about how “human nature” (that supposed immutable egoism of economic theory) actually presents itself nowadays, and the basis of policy objectives and design for the future.

    Apparently the Business Council of Australia is against it – talk about making themselves look like Ebenezer Scrooge. And shame on the “hollow man” Peter Costello for his simple-minded denigration of this program as just another Labor govt spending expansion – he who did nothing on this issue through 11 years as Treasurer in the good times. (And thank God he rejected his ALP connections in his early career!).

  3. JNI
    May 1st, 2013 at 22:26 | #3

    IMO this post conflates two separate issues:

    (1) “the appropriate balance of private and public expenditure”

    (2) the budget surplus / deficits consistent with full employment and potential GDP growth

    Both (1) and (2) are legitimate but separate debates that needs to occur in this country.

    It is important to recognise that – as Warren Mosler would say – taxes function to regulate demand not raise revenue per se. i.e. we don’t need a medicare levy to ‘fund’ the national disability insurance scheme.

  4. May 1st, 2013 at 22:30 | #4

    I know this is heresy, but I don’t “buy” the NDIS.

    I know a fair bit about insurance. Simply put, insurance is an incredibly lucrative business which takes in more than it pays out. The difference is measured in billions of dollars and goes into the pockets of very wealthy people and corporations – it doesn’t get put away for the proverbial rainy day. It doesn’t get spent on fixing the eventuality insured against one cent more than it has to. It is not a public service. It is the stuff that gets creamed off the top.

    In Qld we used to have a lot of insurance cover provided by the State Government Insurance Office (SGIO). That was sold off for a pittance, with all its goodwill, and is now Suncorp.

    NRMA, AMP, RACQ were all “mutual” insurers when they started and are all now profit-only driven corporations. When they ran as mutuals they were like co-ops, quite socialist in their philosophy. Once they became profit-driven corporates the interests of their “insureds” became secondary to their duty to deliver maximum profits.

    The NDIS is going to “cost” $22 billion apparently, and ‘everyone’ thinks this is fantastic.

    Anyone with experience in insurance would confirm that the vast majority of that will go into the profit centres of the “business” and the minimal amount will be spent on delivering the purpose of the insured event.

    What will disabled people actually get out of that $22 billion?

    Nobody can tell me, all I get is words like “better outcomes”, “fairness”, “opportunity”, “choice” etc…

    Until someone can give me a coherent explanation of how this will be better than simply directly providing whatever services and goods disabled people need for their health and dignified care in society, I will continue to consider this one of the biggest neo-liberal cons cynically perpertrated on the people of Australia and loudly supported by ALP/LNP/media.

    In brief – “What exactly is NDIS? and How would it work better than directly publicly funded disability services?”

  5. kevin1
    May 1st, 2013 at 23:06 | #5

    Me

    @Megan
    Megan, I’m glad you said what you think. Hopefully you will keep thinking.

    “I know a fair bit about insurance. Simply put, insurance is an incredibly lucrative business which takes in more than it pays out.” This is govt insurance, does Medicare (to which this is an extension) meet this test? No, so don’t apply your misplaced ideas about private and mutual insurance to NDIS.

    “The NDIS is going to “cost” $22 billion apparently, and ‘everyone’ thinks this is fantastic.” Never heard this number before, please reference it, are you repeating the naysayers’ vision? The APH Library “National Disability Insurance Scheme” paper by Luke Buckmaster anticipates a total $13.6 B annually.

    ‘I will continue to consider this one of the biggest neo-liberal cons cynically perpertrated on the people of Australia and loudly supported by ALP/LNP/media….In brief – “What exactly is NDIS? and How would it work better than directly publicly funded disability services?”‘

    The quality of care is highly determined by the person/organisations which provide it. By getting rid of middlemen/gatekeepers/”approved service providers” in favour of those nominated by the care recipients, we are admitting that there are many bad service providers in the disability service system – people in this system know this is true. “None better to break the chains than those who wear them” was an IWW slogan which is an eternal verity.

    You want a blueprint? The nature of a new way of working is that it needs to be worked out in practice, with feedback loops, improvement processes but ultimately governance by the disabled people themselves – no more benevolent (or malign) dictatorship by ignoramuses and sectional interests – workers, governments, and service providers!

  6. John Quiggin
    May 2nd, 2013 at 05:04 | #6

    @JNI I’ve explained before why MMT doesn’t mean you can have new programs without higher taxes

    http://johnquiggin.com/2011/10/18/money-for-nothing/

    Warren Mosler, in comments, endorsed the post

  7. J-D
    May 2nd, 2013 at 08:01 | #7

    @Megan
    The legislation and draft rules are accessible online. I would have thought they would have answered your questions and wonder whether you have looked at them.

  8. Ikonoclast
    May 2nd, 2013 at 08:11 | #8

    I won’t restart the MMT debate here. JQ has said above “I’ve explained before why MMT doesn’t mean you can have new programs without higher taxes.” He has not said, “I’ve comprehensively refuted MMT.” He is clear and precise in the statement he makes.

    Of course, new spending programs without higher taxes are possible in some circumstances. For example, in a prolonged boom with receipts rising in nominal and real terms but not in per capita terms (thus no higher taxes) one could fund a new spending program. This raises a very important point. Pronouncements about what is possible or not possible must always be made with reference to actual economic conditions.

    On the topic, Kevin1 says, “when they were “the other” locked up in the benevolent (read “cruel”) institutions of days gone by.” This has some resonance. My (admittedly brief and curtailed) researches into non-government welfare and charity in the 19th C in Australia supports the construction of “cruel”. Several Royal Commissions of that era essentially made that finding and were instrumental in the move to state welfare. This is not to say that state instutions always escape the same label. Public accountability does shine a much brighter light into institutions.

    Finally, the general principle that you cannot have new programs without higher taxes does raise the following issue in a mixed economy state. Where do we stop the state? At some stage, we do have to stop the state encroaching in a mixed economy system. This is more like a point that TerjeP would raise but reasoning to extremes requires me to raise it too. Would I like to see the state appropriate 100% of all private incomes and run 100% of all enterprises? My answer is no. Whilst I would prefer to see worker cooperative ownership rather than capitalist oligarch ownership, my bottom line in that sphere is that cooperative ownership like all partnersip ownership is still private ownership and not state ownership.

    If we do stop the state at some point, the finite total capacity of the economy and the delimited percentage of it permitted to be controlled by the state clearly imply that there is not a limitless capacity for welfare just as there is not a limitless capacity for anything else.

  9. May 2nd, 2013 at 09:54 | #9

    @J-D

    The draft legislation doesn’t actually say anything. But I was unaware of the draft rules – thanks for that.

    I strongly encourage people to take the time to look at the draft rules.

    http://yoursay.ndis.gov.au/document/index/11

    Unfortunately they also don’t really tell me anything either. Here is a typical sample:

    Participants in the NDIS can develop a personal, goal-based plan about how they will be provided with reasonable and necessary supports. People with disability who do not have a plan can also be assisted by the NDIS.

    The NDIS will enable people with disability to exercise choice and control in the pursuit of their goals and the planning and delivery of their supports.

    In a nutshell: There will be an NDIS agency. It will hand out money. It will approve (or not) a “plan” for each disabled person. The money to be spent under the plan can be managed by approved agents.

  10. kevin1
    May 2nd, 2013 at 10:29 | #10

    @Ikonoclast

    Several Royal Commissions of that era essentially made that finding and were instrumental in the move to state welfare. This is not to say that state instutions always escape the same label.

    Your second sentence is much too kind to state institutions, with regular reports of low-quality services ranging up to serial abuse in them over the last 30 years; the Victorian Office of the Public Advocate calls for closure of the residual institutions in their recent “Position statement on congregate-care facilities (institutions) for people with a disability” on OPA Victoria website. For good reasons rejection of institutional care for disabled people is almost totally supported by them and their representatives as well as others in the field, here and internationally.

    One revelation to socialist-inclined people like me is how unaccountable and unresponsive these benevolent state organisations have been, with egregious human rights abuses the consequence of “out of sight, out of mind” confinement. No doubt there are many contributing factors, but monopoly provision (“take it or leave it” knowing there is little alternative) and the exercise of power by state departments as funder and service provider or licenser over would-be clients and their families who are desperate for what is often expensive assistance play a big part. Petty power will be used where it exists in both private or government bodies, and devaluation of residents’ human worth matched general social values.

    But before the libertarians amongst us get their hearts aflutter, there is good news: legal and bureaucratic reform, more enlightened values and strong advocacy bodies have brought about huge improvement, such as the steady growth of small “normalised” living situations, often group homes for more severely disabled people, or flats for higher-functioning individuals with occasional support, and these are working. NDIS will extend that, with more flexibility over everyday lifechoices and funding being devolved to the person rather than the discretion staying with the funder or service provider.

    This could mean for instance, that a respite carer chosen by the disabled person is hired (perhaps a neighbour, friend or relative) rather than one sent from the “pool” at the local Council or State department regional office. There will be oversight and constraints of course, but enhanced service quality through expansion of choice will be often critical, and the competition with large service providers (govt and private) forcing improvement. It seems to me there’s a lot to like about the principles behind this for both libertarians and lefties.

  11. wilful
    May 2nd, 2013 at 11:13 | #11
  12. kevin1
    May 2nd, 2013 at 11:43 | #12

    Since there is some interest on this blog in discussing NDIS, I hope our host will allow me to refer those people to http://everyaustraliancounts.com.au/ where they can get more info.

  13. May 2nd, 2013 at 11:57 | #13

    I think including a link might have put this comment into moderation:

    @J-D

    The draft legislation doesn’t actually say anything. But I was unaware of the draft rules – thanks for that.

    I strongly encourage people to take the time to look at the draft rules.

    yoursay DOT ndis DOT gov DOT au/document/index/11

    Unfortunately they also don’t really tell me anything either. Here is a typical sample:

    Participants in the NDIS can develop a personal, goal-based plan about how they will be provided with reasonable and necessary supports. People with disability who do not have a plan can also be assisted by the NDIS.

    The NDIS will enable people with disability to exercise choice and control in the pursuit of their goals and the planning and delivery of their supports.

    In a nutshell: There will be an NDIS agency. It will hand out money. It will approve (or not) a “plan” for each disabled person. The money to be spent under the plan can be managed by approved agents.

  14. Ikonoclast
    May 2nd, 2013 at 14:29 | #14

    @kevin1

    I am sure you are right in saying “Your second sentence is much too kind to state institutions.”

    However, I also don’t want to see us repeating mistakes because we forget history. Private and church institutions committed egregious abuses in the 19th C in Australia. Their accountability in most cases was less, markedly less than that of state institutions, and the cruelty, insensitivity, dogmatic and authoritarian aspects were much worse.

    Having said all that, insitutional care should be avoided in all cases where that is possible. Is it always possible? That is my question. In the case of my parents, both are now in high care nursing home wings with severe dementia and mobility issues. Indeed, my mother is entirely bedridden. (While this comes under the aegis of aged care where government assitance has been better, it is still essentially disability care. It is simply that the disability has occurred and progressed due to extreme old age.)

    I seriously question whether any setting other than an institutional setting could provide the 24 hour a day, seven day a week care they require. The setting they are in is characterised by the following features. The institution is run by a church group who run many such institutions around this state (Qld) at least. Funding is achieved by several forms of government contributions and patient contributions. The care is as close to practicably faultless so far as I can determine from numerous visits and interactions with my parents and staff over several years now.

    I reiterate, I seriously question whether any setting other than this institutional setting could provide the 24 hour a day, seven day a week care they now require. My parents stayed in their home considerably longer than was advisable really. My father’s health was broken by caring for and covering up for my mother who developed dementia first. My siblings and I shopped for them entirely, managed their affairs as they became incapable and did supplementary cooking and cleaning on at least a tri-weekly basis for their last 5 years in their own house. This is whilst we had our own jobs, homes and families to attend to. I am the first to admit that this task was still several orders of magnitude easier than caring for severely disabled children which often becomes a lifetime task.

    In summary, at the extreme need of care I do not see how you can escape the need for institutional care. Also, given how I have seen it can be well delivered in an enlightened manner then I think the aged care model and funding levels for other institutional care needs should work. But the streams should not be mixed unless large comprehensive facilities can provide different wings with appropriate care for different cohorts and at the same time benefit from having a wider community of ages for both residents and visitors.

    Whatever system is created, even one such as the NDIS, there is always the potential for corruption, rorting, misallocation, embezzlement and diversion of funds from the proper purposes. Vigilance, oversight, compliance and accountability measures are always necessary. Self-regulation never works. Where private enterprise is dealt in the oversight needs to be even stricter than that on not-for-profit and government bodies; if for no other reason than the fact that the private sector is more inventive at everything and this extends to developing rorts.

  15. J-D
    May 2nd, 2013 at 16:40 | #15

    @Megan
    I can see, of course, that the example you quote doesn’t tell you everything. But it does tell you something. I am curious about what it is, specifically, that you want to know but feel you aren’t being told.

    In any case, if your initial response is based only on the use of the title ‘insurance’, I feel impelled to point out that titles, by themselves, often provide little or no usable information. Whatever the limitations of the legislation or the draft rules, they are sure to provide more information than the title.

  16. May 2nd, 2013 at 17:17 | #16

    @J-D

    What, exactly, will disabled people get from NDIS which they can’t get now? And HOW will they get it in a way that they couldn’t get it now?

    E.g.: I heard a story on the radio this morning about a kid who needed an expensive wheelchair. As I understood the complaint of his mother, it took (or would have taken) a long time to get one from the government – they didn’t explore why – and they had to raise money themselves, but it sounded like they got one from the government in the end.

    Obviously under the NDIS the government will pay for the wheelchair. Why not just do that now? HOW will the NDIS be better in this example?

  17. May 2nd, 2013 at 17:32 | #17

    PS: If the only difference is more money, then why all the weasel-words? Why not just directly fund whatever is needed?

    If it is simply a “voucher” system for the disabled then it is definitely a neoliberal con (look into the “voucher” system for schools in the US for example). The money will find its way into all sorts of profit-making businesses.

  18. rog
    May 2nd, 2013 at 17:48 | #18

    @Ikonoclast I am hoping that institiutions like the nascent NDIS will be compelled to adopt quality management systems. These are not foolproof but are a quantum leap from the old public service, where nothing was done twice.

  19. rog
    May 2nd, 2013 at 17:53 | #19

    @Ikonoclast I’ve gone thru a similar process with my parents and found that a private nursing home far superior to the alternative. You do have to pay which excludes most people from these services. The level of care in a standard institution is unsettling.

  20. kevin1
    May 2nd, 2013 at 20:11 | #20

    @Ikonoclast

    Having said all that, insitutional care should be avoided in all cases where that is possible. Is it always possible?

    Thanks for all that, but my comments are directed specifically at intellectual disability and autism facilities, because they are different: the confinement and community isolation of persons for a further 60-70 years from the early stages of their life when their syndrome presents (or in the past when many people were sent to “asylums” due to loss of family or anti-social behaviour!) is a wasted life, and a tragedy for those close to them. Their life of schooling, work opportunities, relationships, personal development, food quality – all sub-par because the people were classified as sub-par. And it’s not a 19C phenomenon – this went on to the late 1980s. An extreme rate of decline in old age is difficult for the person and family but there is much to cherish – a child’s situation is a life sentence. I hope I can say that without causing offence or minimising your difficulty.

    I’ve actually just come from a men’s group I attend at the integrated (dementia, low care and high care) facility where my mother lives. The 5 blokes can be a bit slow in keeping up their end of the conversation, but we had a few laughs and anecdotes to share and I know it perks them up – it’s a great place, and a model of how good leadership and staff can minimise the problems of an impersonal institutional residence. It’s not perfect but works to improve and is very open to scrutiny by outsiders like me. For a long time in many locations I never found this approach in the Vic govt IDS (Intellectually Disability Services) where my son lives. I put this down largely to the marginalisation of th disabled group – no political clout.

    The parents of these children not only had to surrender them to be wards of the state to get services, but were often told to “leave and forget them”, again up to the 1980s. Over the last 3 decades, state welfare departments have largely refused to provide out-of-home accommodation on any other basis, with one consequence being that 1,007 young disabled people (under 50 years old) were living in permanent aged care facilities in 2006 (AIHW Bulletin 103 of April 2012). But attitudes have changed, and creeping change is on the march, although still slow. (see Moira Rayner’s website article on the 1996 fire at Kew Cottages which killed 9 residents in a locked unit. More recently, the SMH Nov 21 2012 article by long time campaigner Sandy Guy “Heinous crime against the disabled must be included in child abuse probe”). I agree that mixing different age cohorts is not ideal – it is not favoured professionally and steps have been taken to gradually reduce this.

    I also agree that regulation and accountability are required for the NDIS, but that has its own cost – some of the services needed can be best provided by informal arrangements organised by the beneficiaries themselves. Targeted auditing may be best rather than a fullblown bureaucratic army of invoice checkers.

  21. May 2nd, 2013 at 20:28 | #21

    The following is from a May 24, 1976 US cable from Canberra (typos included) at a time when there was quite a lot of debate about health funding in Australia:

    1. SUMMARY: TREASURER LYNCH IN LENGTHY PARLIAMENTARY STATE- MENT MAY 19 ANNOUNCED THREE MAJOR FINANCIAL DECISIONS AND ALSO LISTED ADVANCE DECISIONS WHICH HAVE BEEN MADE RESPECTING A VARIETY OF PROGRAMS AND ACTIVITIES IN THE EXPENDITURE SIDE OF THE FY 1977 BUDGET.

    2. THE KEY ANNOUNCEMENTS WERE (1) FULL PERSONAL INCOME TAX INDEXATION TO BE EFFECTIVE JULY 1, 1976; (2) FUTURE FINANCING OF MEDIBANK TO BE REMOVED FROM GENERAL REVENUE AND COVERED BY NEW 2.5 PERCENT LEVY ON TAXABLE PERSONAL INCOME EFFECTIVE LIMITED OFFICIAL USE LIMITED OFFICIAL USE PAGE 02 CANBER 03714 01 OF 02 240730Z OCTOBER 1; AND (3) A MAJOR CHANGE IN FAMILY ALLOWANCES ARRANGEMENTS UNDER WHICH TAX DEDUCTIONS FOR CHILDREN WILL BE DISCONTINUED AND SHRAPLY INCREASED CASH ALLOWANCES FOR CHILDREN INTRODUCED.

    3. THE ADDITIONAL ANNOUNCEMENT OF PROPOSED FY 1977 EXPENDITURE LEVELS IN VARIOUS PROGRAM AREAS WAS INCOMPLETE, DID NOT DEAL WITH THE REVENUE SIDE OF THE BUDGET, AND WAS EXPRESSED IN TERMS OF PROPOSED REDUCTIONS FROM UNSPECIFIED INTIAL EXPENDITURE ESTIMATES FOR FY 1977, RATHER THAN IN RELATION TO CURRENT EXPEDITURE LEVELS. FOR THIS REASON, THE DETALS REVEALED ON THE EXPENDITURE SIDE CONVEY A CLEAR IMPRESSION OF THE GOVERNMENT’S EMPHASIS ON AUSTERITY, BUT DO NOT PERMIT ANY JUDGEMENTS ON TOTAL SPENDING OR DEFICIT LEVELS NOR ON THE NET IMPACT OF THE PROSPECTIVE BUDGET.

    4. MANY OBERVERS PUZZLED BY CHARACTER AND SURROUNDING FANFARE OF 90-MINUTE TREASURER STATMENT, IN VIEW OF RELATIVELY INCONCLUSIVE NATURE OF FRAGMENTARY BUDGET DATA REVEALED. CONSENSUS IS THAT STATEMENT MOTIVATED BY TWO CONSIDERATIONS: (1) TO INFLUENCE CURRENT CONCILIATION AND ARBITRATION COMMISSION CONSIDERATION OF FUTURE WAGE INDEXATION POLICY BY CONFIRMING GOVERNMENT’S TAX INDEXATION AND BUDGET AUSTERITY PLANS AND (2) TO COUNTER RISING PUBLIC CRITICISM OF GOVERNMENT FOR SLOWNESS IN FORMULATING DETAILED ECONOMIC POLICY. END SUMMARY.

    Here we are again!

  22. kevin1
    May 2nd, 2013 at 20:29 | #22

    @rog
    Rog, you probably have seen inside the front door of the place your parents are at, the Charter of Resident Rights which facilities have to sign up to to get Fed funding. I agree there are quality variations between places and I had some experience with a local govt run place a few years ago which was low standard, and oppressive towards residents. You are probably aware that the legislative drive towards professionalism has been accompanied by a suite of advocacy groups and investigatory bodies and tribunals – indeed there is an expanding field of “elder law”. Who said baby boomers are a drain on society – they are the political gift that just keeps on giving.

  23. May 2nd, 2013 at 23:26 | #23

    @wilful

    Yes, thanks, but I’ve done all of that. That’s why I keep asking “What exactly is it?” and all I get is links to stuff like:

    An NDIS will ensure people are no longer “shut out” from opportunities and from independence by providing the appropriate and necessary supports that allow people with disability to reach their full potential.

    I know this is bipartisan (and therefore beyond normal democratic discussion) but that sounds an awful lot like:

    “This is about, in terms of going forward, a much needed reform long-awaited by hard working Australian families to ensure dignity and a fair go while also taking into consideration the genuine realities of the real world environment but also opening up new opportunities for communities to come together and work toward a better future, one in which all Australians can share.”

    Sadly, I think I’ve just written a political speech.

  24. rog
    May 2nd, 2013 at 23:28 | #24

    @kevin1 Changes in criteria for fed funding has lifted the bar on quality but the buck usually stops with the facility manager and good managers tend to be drawn to quality facilities. The next 20-30 years should see quantum shift in care.

  25. May 3rd, 2013 at 00:22 | #25

    I’ve been following the Queensland Health Payroll Inquiry very closely.

    It is a prime example of what happens when vague ideas about the wonder of the free market and corporate delivery of service are given free rein. The Queensland Health/IBM disaster should be something of a speed bump in anything like this.

    Please look into it before blindly advocating its unforeseen wonders. This is very serious and could easily end up very badly for everyone, not least the disabled some people we think we’re helping.

  26. rog
    May 3rd, 2013 at 05:11 | #26

    The Queensland Health Inquiry (debacle) appears to be an instance of poor tendering/contracting by Govt.

    http://en.wikipedia.org/wiki/Queensland_Health

  27. Ikonoclast
    May 3rd, 2013 at 07:56 | #27

    Kevin1 “a (disabled) child’s situation is a life sentence. I hope I can say that without causing offence or minimising your difficulty.”

    Absolutely, as I said, I consider the difficulties and sadness engendered by a disabled child’s situation to be many orders of magnitude greater than aged care issues. One often has the consolation in regarding elderly parents of saying; “Well, they had a long, happy, healthy, productive life and now they are comfortable. Their condition (advanced dementia) now protects from them painful insight into their situation.

    On the central topic. I am not sure of the detail of NDIS. If there is more funding, more responsiveness to need and more appropriate provision of assistance then it has to be a big step in the right direction. Cautionary tales against agents and operators privatising a profit stream out of it, if that could happen, (as opposed to not for profit operators) are worth listening to. It’s a danger to always be aware of. Whatever goes to profit does not go to care.

  28. kevin1
    May 3rd, 2013 at 09:38 | #28

    @Ikonoclast
    “On the central topic. I am not sure of the detail of NDIS.”

    Nor am I, the nature of the whole thing is tailor-made support for individual circumstances with many technical issues, so careful learning-oriented implementation is integral to the process, and the pilot sites around the country will inform this. And there has been work done in Australia over recent years which you can see from the “Occasional Paper no. 29 Effectiveness of individual funding approaches for disability support” at the federal department (FAHCSIA) website.

    What is missing so far from the general discussion is an awareness that there is a substantial philosophical discussion and experimental practice which underpins the general “individualised” approach. So far this is invisible to the general public, who are surprisingly sympathetic, but largely without direct experience. It is a radical alternative model to the “one size fits all” statist solutions so strongly rejected by those at the coalface, who want more direct control and adaptation of the supports they need. They are not scared of negotiating with private providers, who can be govt-regulated in the same way as tradespeople – you don’t get scared about calling a private plumber to come to your house. “Choice” is not some rightwing mantra, it is a tool to obtain service responsiveness.

    One example which might illustrate the point is childcare. In mainstream society, parents have multiple choices from family, relatives, friends, their other children, neighbours etc., Family Day Care from local govt, babysitting clubs, private, community, workplace or govt childcare centres. But where there are severely disabled, medical or behavioural aspects, most of these options are out, leaving special govt or private respite centres (access very difficult and inflexible, often of bad quality) or local govt funded carers coming into the home for short periods (rationed tightly and only in the home, not outside). (BTW, the need for childcare also comes from parents living with their 40 year old child with cerebral palsy, in a wheelchair – these are parents with a feeding, washing, dressing burden for their children over their whole life, and there are many tens of thousands in this situation.)

    For those who want to trace the international antecedents to these approaches, putting “Individualised Funding Information Resources” in google provides a range of literature about these issues.

  29. May 3rd, 2013 at 11:07 | #29

    this got in as one might expect.

    Great reading for the weekend. see DD’s comment of the year

  30. May 3rd, 2013 at 11:25 | #30

    There is always risk attached to turning anything that should be publicly provided over to the tender mercies of the profit-driven.

    Eddy Groves made a fortune out of the policies of privatising child care. The Government paid about $2 billion dollars a year when Eddy was at his peak and he got the lion’s share of that. When it all went bust the taxpayer bailed out the wreckage.

    ABC expanded aggressively into the outsourcing of child care services, negotiating deals with some of Australia’s largest employers including the Australian Department of Defence which involved taking over the Department’s nineteen childcare facilities. Aside from offshore expansion, the company expanded into training and education. It ran the ABC Early Childhood Training College providing training for childcare workers, and published Small Wonders, a magazine aimed at parents with young children.

    It was a highly profitable company, in the FY2004/5 recording net profit after tax of $52.3 million on total revenues of $292.7 million.[5] The six months ending 31 December 2005 showed no slowing in the financial momentum for the company with profit after tax reaching $38 million and revenues of $219.8 million.

    Critics of ABC Learning said it was making considerable profits at the expense of Australian taxpayers whose money subsidised the use of childcare with means-tested tax rebates.

    There was also controversy about the dramatic expansion of the company with claims that in some areas ABC – by acquisition – had achieved a monopoly in the provision of childcare services. The Australian Competition and Consumer Commission reviewed the company’s acquisition of Peppercorn and permitted the deal to go ahead after imposing certain conditions including a requirement to close centres in some areas and agreeing not to purchase in other areas.[13]

    ABC Learning also used its considerable financial resources to support challenges to regulations governing childcare and enforcing vicarious liability on the company. In one case, in 2006 it challenged a $200 fine imposed by a Victorian Magistrate for the actions of its staff who failed to adequately supervise a two-year old child who escaped from a centre in suburban Melbourne and was found by a neighbour and brought back to the centre. It argued that the company had done all it could reasonably be expected to do to provide facilities that made escape difficult and that any legal liability should rest with the staff involved.[14]

    In August 2006, ABC Learning pleaded guilty to ‘Failing to Enclose’ in the Fremantle Magistrates Court and were fined $1300. A three-year old boy escaped from the centre in Lynwood, Western Australia, through a broken fence and was found by staff in a nearby car park.[15]

    From ABC Learning Wikipedia.

    All I want is people to think about what exactly it is we’re so excited about. As I said, nobody seems to be able to nail it down beyond vague feelgood words of praise.

  31. may
    May 3rd, 2013 at 15:36 | #31

    rog :@Ikonoclast I’ve gone thru a similar process with my parents and found that a private nursing home far superior to the alternative. You do have to pay which excludes most people from these services. The level of care in a standard institution is unsettling.

    but doesn’t it all come down to the people who are the staff?

    an aunt of mine spent the last twenty years of her life being cared for with Alzheimers,paid for by my uncle as she became progressivelyworse—he was impressed with the care and dedication of the people looking after her.

    a vigorous 85 yr lady who lived alone (her home, her choice)down the road from my mother,fell and was not found for two days.because she had no family her church took power of attorney and rent out her property to pay for her care.with nothing what-so-ever to do,when visited she is always sitting with her hands in her lap in exactly the same position as when last seen.

    i ,at one time,visited with a 45 yr para friend who was in an aged care because that was the only place that could be found.
    the place looked what i call television tidy,but again nothing to do and the common room was very large with seats around the wall and one tv high up.
    no gardening allowed,it was all in the hands of contractors so no food grown.
    the saddest part was an old bloke who had commandeered 1 sq mtr in a corner and used it as his shed.

    disabled or old,the refusal to make space or aknowlegment of those skills and experience to be used or passed on bemeans us all.

  32. J-D
    May 3rd, 2013 at 16:18 | #32

    @Megan
    I’m not clear what you’re suggesting when you talk about directly funding whatever is needed, so I’m not clear how you think what the NDIS offers is anything different from that.

  33. J-D
    May 3rd, 2013 at 16:23 | #33

    @Megan
    I’m also not clear on what makes you think that the NDIS involves privatising anything.

  34. Fran Barlow
    May 3rd, 2013 at 16:39 | #34

    I’m a believer in keeping the relationship between the tax scales of companies and income tax aligned, so if a levy is to be imposed for NDIS, then I believe one should fall onto companies as well. That should take care of some of the alleged budget shortfall and discourage people from thinking about playing about with their income from private companies to minimise tax. If people are paying a 0.5% levy then so should companies. After all Abbott has been talking about a much bigger levy on large companies than that for his PPL scheme. He can scarcely object.

  35. May 3rd, 2013 at 18:45 | #35

    @J-D

    So what does it do? As far as I can tell from the links suggested, it involves handing out money rather than spending the money via (eg) the Health Department.

    A huge amount of money was generated as private profits when the government closed the CES and paid private businesses (I include the groups like Salvos in that category in this case) to handle job placements. Anecdotally, I’m aware that staff driven by targets and financial incentives forced people into unsuitable jobs just to get them off the “books”.

    Again, this is vague because it’s all so opaque, there will be a lot of money to be made by businesses set up to “manage” the allocated spending money for each disabled “client” as well as businesses set up to spend the money with.

    It looks as if businesses can also be set up which do both – ie: manage the money by spending it with themselves.

    I’m suggesting that it looks as though the administration is what is being privatised in that sense.

  36. Alan
    May 3rd, 2013 at 19:58 | #36

    The NDIS strikes me as a shell game. All the individualisation in the world is not going to alter the level of services one jot without increased funding. According to AM:

    MARTIN CUDDIHY: AM has been told that everyone on a Disability Support Pension will be reassessed and given a rehabilitation plan or a return to work plan.

    Re-assessing everyone on DSP and producing individualised plans does not sound like a source of unbridled joy to disability pensioners. Equally importantly, that process will be nowhere near completion on 14 September and will therefore be carried out under the Abbot government.

  37. kevin1
    May 3rd, 2013 at 20:15 | #37

    @Fran Barlow
    What would you see as the consequences of a company tax rate increase on new investment in Australia and capital migration to overseas, and how would you deal with the negative effects? Half a percent doesn’t sound much, but there seems to be an acceptance in policy circles of a greater price elasticity of capital nowadays ie. sensitivity to profitability change, but how big is the effect?

    The Business Tax Working Group Final Report 2012 Chapter 1 at sections 42-45 of “Economic impact of cutting the company tax rate” http://www.treasury.gov.au/PublicationsAndMedia/Publications/2012/BTWG-Final-Report/html/Chapter1#P150_29687 looks at the scenario of a 1% cut in company tax rates. By implication, I think we can reverse the sign of change (minus to plus and vice versa) to predict the effect of a 1% tax rate increase. This gives a 0.2% decrease in GDP, a 0.3% decrease in capital stock, and decrease in household consumption of 0.05%. And at section 46, “the Working Group considers that a cut in the company tax rate of two to three percentage points would be needed to drive a significant investment response” and so corollary is that a rise in tax rates of this order is required to significantly reduce investment. So overall a 0.5% rate increase looks like a very small effect. Happy to be corrected by others here!

    Political symbolism is the real obstacle – I think it’s just pouring oil on the fire at this point to campaign for a business levy, and there’s no groundswell for it – the disability sector is just relieved to get this done. Sorry, but management of a major institutional reform shouldn’t be jeopardised for what is – even at $3.5B – a small financial issue. And why should marginalised people with disabilities have to cater to objections from the mainstream about how much it costs to move up from the second class carriage after all these years when Medicare already runs a deficit of $8B p.a.?

  38. kevin1
    May 3rd, 2013 at 20:37 | #38

    @Alan
    I suspect a “rehabilitation plan” is the wrong phrase being used by functionaries who have just now had to grapple with the jargon of the disability field – there will be no “rehabilitation” for the great majority of the severely disabled people NDIS applies to – they are the extreme cases, this is not a medical support program and there is no “cure” for their condition. What I suspect is meant is a personalised plan to identify and supply their unmet needs, and measure the consequential finances.

    The Age and SMH today in the article “Cruellest cut as older sufferers miss out on scheme” list extracts from the Act or Bill on eligibility which requires that “The impairment results in substantially reduced capacity to undertake communication, social interaction, learning, mobility, self-care or self-management” and “The person is likely to require support under the National Disability Insurance Scheme for the person’s lifetime.” Very very few participants in my opinion will be primed for work as a result – this is not a “back to work” program, and if any pollies are saying this they are just doing sales hype.

    However, the many carers currently housebound or tied up daily in support or therapies will be freed to rejoin society in many ways including work, as a result of the provision of inhome support, travel provision, others taking the disabled person to appointments etc.

  39. kevin1
    May 3rd, 2013 at 20:52 | #39

    @Fran Barlow
    This replaces same posting shunted into moderation due to one link (so I won’t include links in future.)

    @Fran Barlow
    What would you see as the consequences of a company tax rate increase on new investment in Australia and capital migration to overseas, and how would you deal with the negative effects? Half a percent doesn’t sound much, but there seems to be an acceptance in policy circles of a greater price elasticity of capital nowadays ie. sensitivity to profitability change, but how big is the effect?

    The Business Tax Working Group Final Report 2012 Chapter 1 at sections 42-45 of “Economic impact of cutting the company tax rate” on Treasury website looks at the scenario of a 1% cut in company tax rates. By implication, I think we can reverse the sign of change (minus to plus and vice versa) to predict the effect of a 1% tax rate increase. This gives a 0.2% decrease in GDP, a 0.3% decrease in capital stock, and decrease in household consumption of 0.05%. And at section 46, “the Working Group considers that a cut in the company tax rate of two to three percentage points would be needed to drive a significant investment response” and so corollary is that a rise in tax rates of this order is required to significantly reduce investment. So overall a 0.5% rate increase looks like a very small effect. Happy to be corrected by others here!

    Political symbolism is the real obstacle – I think it’s just pouring oil on the fire at this point to campaign for a business levy, and there’s no groundswell for it – the disability sector is just relieved to get this done. Sorry, but management of a major institutional reform shouldn’t be jeopardised for what is – even at $3.5B – a small financial issue. And why should marginalised people with disabilities have to cater to objections from the mainstream about how much it costs to move up from the second class carriage after all these years when Medicare already runs a deficit of $8B p.a.?

    There’s an undercurrent of scepticism from ignorant mainstream commentators behind this (I am not referring to any commenters on this blog). Dills like the Myers man, he of the mealy mouthed “if (sic) people are offended I am sorry”. He and many commentators can’t understand that if you tax the mainstream and transfer the cash to lower income groups with an accumulation of suppressed need, they are deadcertain to spend it, not save it! So I would not be at all surprised if Myer or an affiliate actually establish a sales operation to supply disability consumables and equipment of all sorts once they switch their brains back on, as it represents a growth opportunity (think how the aged care market for walkers, recliner chairs, therapy equipment etc. has expanded).

  40. May 3rd, 2013 at 21:33 | #40

    @Megan
    The point of the NDIS is not that it is insurance. It is just a way of appropriately paying people who need it because they have disabilities. Our current system is ludicrous. If you are a passenger in a car, that has an accident, you can sue the driver for damages and it gets paid by insurance, but if you are the driver, you can’t sue anyone, and you are up the creek if you have big ongoing medical expenses.
    I know someone who has a severely disabled child. Because it was attributed to medical negligence, they have a good life. They’ve been able to build a house fitted out for the child’s needs, and employ carers. If a hospital had not been involved, the child would have ended up just as disabled (or dead), but they would have had no compensation, and hence a really hard life.

  41. kevin1
    May 3rd, 2013 at 21:47 | #41

    Sorry if I’m banging on too much about NDIS, obviously there is a personal angle here, but I am enthused about the potential for some fundamental improvements in real people’s lives (yes Megan, I don’t have a blueprint or all the answers, there is an element of a “journey of discovery” about this – including the dialectical interchange when ideology confronts personal circumstances).

    I don’t work in the disability field and I’m not an expert, but for those who want to dig deeper, there is a rich lode to mine, and the PC’s “Disability Care and Support” 2011 report is worth looking at, especially Ch 20 The Benefits of Reform.

  42. kevin1
    May 3rd, 2013 at 21:49 | #42

    Also the discussion at The Conversation “Coalition support for levy just a step along the road to an NDIS”

  43. May 4th, 2013 at 00:26 | #43

    @John Brookes

    You could look into ideas such as “no fault” compensation. My argument is that we, as a society, should look after all our broken, troubled, unlucky, sick and disabled and we should never accept the idea that a “market mechanism” can do it better than a fully accountable, transparent, publicly funded and controlled system.

    Of course we’ll buy the band-aids, aspirin, wheelchairs and so on from the “free market” vendors of such products, but “we” should be the stronger participant in that transaction. Why should it be Ok for Coles/Woolworths to dominate a market for milk etc.. but “we” can’t use our buying power to get rock bottom prices and top quality from private enterprises selling goods and services to members of our society who need them? After all, we’re proposing to pay billions for that.

    You ask why it is that a passenger can sue a driver but a driver is left in the lurch. The whole idea of insurance is to commodify risk and profit from a margin of premium against eventuality.

    The law of tort (negligence) developed from the idea that “someone” should pay for “my” damages when the damage was caused by “accident”. Sounds logical until you get run over by someone with no wealth. OK, we’ll introduce compulsory third party insurance. Good, but you now have to fight with the insurer to get adequate compensation for your loss. Invariably the insurer views you as a malingerer and you view the insurer as a vampire squid.

    Usually these arguments get worked out after a costly exercise called litigation (which takes place in expensive buildings paid for and staffed at the taxpayer’s expense).

    If we just taxed appropriately to care for all the needy in our society and ensured that the cost/ quality was as low/high as possible, we wouldn’t need this pretzel-shaped argument about NDIS.

  44. May 4th, 2013 at 00:46 | #44

    PS: We haven’t heard anything from the insurance industry about the NDIS. That is because they will still collect the premiums and pretend to cover the risk but you, as the injured party who fell off the balcony, will now be covered by a scheme that will greatly reduce their exposure. Their premiums will miraculously stay the same and their profits will soar.

  45. John Quiggin
    May 4th, 2013 at 04:13 | #45

    Megan, I haven’t read all your comments, so maybe I’m missing something, but it seems to me as if you’ve taken offence at the word “insurance” in the title of the scheme, then made your own assumptions about what such a scheme might mean. In particular, you seem to be claiming that the insurance function will be administered by private companies (like subsidised private health insurance) rather than by a national agency (like Medicare, which is also an insurance scheme). As far as I can see that’s incorrect

    http://www.pc.gov.au/__data/assets/pdf_file/0011/111404/disability-support-executive-summary.pdf

    So, I’ll invite you to restate your position briefly, then take this debate to the sandpit

  46. J-D
    May 4th, 2013 at 08:51 | #46

    I have read all of Megan’s comments, and I get the same impression, that all of this suspicion springs from the use of the word ‘insurance’ in the title. I pointed out that you often can’t tell anything from titles, but Megan seems to have ignored that comment.

    But I also get the impression that Megan is trying to have it both ways, on the one hand repeating that all she wants is to know what the NDIS will be and how it will work, because she can’t find that information, yet at the same time carrying on as if she thinks she does know what it will be and how it will work: that insurance companies will be involved in its structure (that’s not the way I read it), that it will involve ‘market mechanisms’ (that’s not the way I read it), that it will involve privatisation of something currently publicly owned (that’s not the way I read it). That’s a suspect way of arguing.

    And it’s also suspect when Megan suggests that her idea about how to do things is better than the NDIS when her explanation of how her alternative would work has no more detail than the explanations of the NDIS that she complains about. That looks like another double standard.

    Just from looking at the legislation, it seems to me that the key improvement offered by the NDIS is supposed to be that people with disabilities won’t need to get a series of different approvals from a series of different government agencies to get funding for the things they need; instead they’ll need just one approval from just one agency which will cover funding for a list of the things they need. I’m guessing that if they want to add more things to the list they’ll probably need one more approval, but it still sounds like an improvement to me. Also any extra money that comes with the scheme can’t hurt.

  47. kevin1
    May 4th, 2013 at 09:03 | #47

    @John Quiggin
    The PC report Exec Summary includes a lot of info germane to this discussion. The involvement of people with disabilities in mainstream work in Australia has been going backwards for a long time. But on productivity effects, it does expect some a small percentage of disabled people to move into the workforce as a result of its proposals (some of which have not yet been accepted by the govt, such as changes to the Disability Support Pension) including efficiency gains at the support worker level. A site of regular confrontations is between parents wanting to enrol their children into mainstream schools, and having the schools reject them as too difficult or not funded adequately for the additional support needed. This is outside NDIS, but for productivity boosters is an obvious place to focus attention, as work opportunities for people without certificated education are bleak.

    The PC’s use of “cameos” at 1.12-13 will be useful for those grappling with what NDIS actually looks like at ground level, including A service provider under the NDIS, A young adult with an intellectual disability, A newborn with a severe disability, An adult with disabilities resulting from illness, An adult with a newly diagnosed degenerative disease. These illustrate how this is not just “more money” but a new support paradigm leading to life-changes. It’s probably very useful that the minister in charge, Jenny Macklin, was a senior technocrat involved in the Federal govts long-term co-ordinated care trials before entering parliament.

    Under 1.5 “When will it happen? Implementation of the NDIS” are listed July 2014 Milestones, including “in all regions, work would commence with local groups on a compact to increase social participation and employment opportunities for people with disabilities” These include “concerted efforts to support ‘community capacity building’ and ‘social inclusion’ initiatives “, such as Scouts and Rotary. I suspect that the greater presence of disabled people in educational and social settings over the last 20 years has promoted an ethic of social solidarity and group responsibility which has led to the wide support to the NDIS. Clearly more of this therapeutically benefits people needing psychiatric support, but also will be preventative for others. Also significant for wellbeing is “belonging” as a a citizen with equal value and rights to others.

    An important issue which hasn’t got above the radar yet is how the social inclusion resulting from this has efficiency and effectiveness benefits, through tapping into informal and structured community supports. We already have various programs of disability accommodation monitoring (Community Visitors who are trained volunteers), matchmaking of community volunteers with disabled people who have need of advocacy (Citizen Advocacy), and various “friends” programs, but more informal support is needed. The more the disabled get out and about due to NDIS and expand their personal networks, the more the day to day barriers between them and the mainstream will dissolve, increasing the incidence of people feeling disposed to help one another in small ways, and addressing simple obstacles which can be significant to disabled people, and costly if funded services are required. For instance perhaps when mum needs to go out and leave her disabled son at home, a neighbour helps who is no longer fearful of his strange behaviours, and knows how to toilet him properly.

  48. kevin1
    May 4th, 2013 at 09:09 | #48

    Mainstream schooling for disabled people is addressed in this paper by Prof Robert Jackson of Edith Cowan University “Why should schools include children with a disability?” http://www.include.com.au/wp-content/uploads/2011/11/Whyinclude.pdf

  49. Fran Barlow
    May 4th, 2013 at 09:59 | #49

    @kevin1

    What would you see as the consequences of a company tax rate increase on new investment in Australia and capital migration to overseas, and how would you deal with the negative effects?

    As things stand — too small to measure and distinguish from other factors. The risks attached to FDI in Australia are very low as things stand, and a tax hike of 0.5% is neither here nor there compared with the turbulence in other potential investment markets.

    Insofar as the NDIS for which the levy is hypothecated protects state balance sheets it’s probably good for the medium term investment picture. NDIS will almost certainly underpin greater productivity facilitating greater workforce participation — which is good for companies.

    Let’s put this into perspective. For every $100 of profit a company makes, the government asks for an extra 50 cents. It’s going to pay this 50 cents to people who will spend nearly all of it here on goods and services supplied by companies trading here. That’s not even a ripple in an investment pool surrounded by mountainous seas.

  50. kevin1
    May 4th, 2013 at 11:19 | #50

    @Fran Barlow
    Well I asked and then tried to answer my own question in the post, concluding it was a small negative effect on econ variables: 0.2% reduction in a 1.5 trillion dollar economy is $3b p.a. And half of the change takes 7 years to occur with the rest over 13 years more, so these are long-run effects anyway. So I don’t think it’s the direct economic effect that matters, it’s the U-turn on company tax rates – when the trend everywhere is down – which can affect international sentiment to Australia’s detriment, irrational and fair though it is. Quite apart from the theory which claims that higher company taxes are a “higher cost of capital” to companies, so passed on in higher prices or lower wages. These are unintended consequences we don’t need to risk.

    And I don’t find your analysis convincing on higher workforce participation, which will likely translate as a small increase in low productivity labour in a currently oversupplied sector of the labour market, possibly driving down wages – a benefit to companies but one which policy should try to prevent! Other than that it’s not a boon to employers – they will have to cajoled and pushed into doing anything for people with disabilities because it likely costs money. They haven’t done it absent compulsion to date, with a very few exceptions. From my own enquiries I have found even Fed govt depts are largely uninterested in a programmatic focus on disabled people. So you’re drawing a long bow saying companies will get “benefits” which justify taxing them.

    You say protecting state balance sheets (I presume you mean the Fed govt) will promote investment, but as Koukoulas, Colebatch, Ben Eltham etc say, the fiscal panic is fanned by politics not economic fears – has anyone outside the Libs claimed the deficit will have any effect whatsoever on investment decisions? Even “crowding out” effect on interest rates seems irrelevant when the trend is down. I repeat that there is a whiff around of “another big spending welfare program we can’t afford” and putting the onus on disabled people excluded from equal status for so long to find solutions to the govt’s dilemma to justify NDIS is a discriminatory hangover. I don’t include you in that backlash which I expect to grow, but the weak substance of your argument makes it look ideological. The NDIS funding levels need to be approached on a human rights and equal citizenship basis.

  51. kevin1
    May 4th, 2013 at 11:28 | #51

    @Fran Barlow
    Why not use the opportunity to go for sustainable structural reform like chasing rorts in the economy, such as negative gearing? Tim Colebatch has a shopping list of rorts. http://www.canberratimes.com.au/opinion/political-news/mr-swan-its-simple-to-save-12b-20130430-2ir76.html

  52. kevin1
    May 4th, 2013 at 11:37 | #52

    @kevin1
    Saul Eslake (Liberal Party member) has a nice list of rorts too:

    ”I have to translate the words ‘negative gearing’ to people overseas because it just sounds crazy to have a system that rewards people for losing money. Removing it would be close to the top of my agenda.

    I have a list of what I regard as the worst tax decisions of the last 20 years. One is the halving of the headline rate of capital gains tax [in 1999] that made negative gearing attractive. The others are the abandonment of indexation of petrol excise, the Senior Australian Tax Offset – the measure that says if you are over 65 you pay less tax on a given amount of income than if you are under 65 – and the abolition of income tax on super fund earnings paid to people over 60.

    ”They would be my contenders for the dumbest tax decisions of the last 20 years. Frankly, I can’t choose between them.”

    Peter Martin The Age, 1 May 2013″Negative gearing losses a key drain on revenues”

  53. VoterBentleigh
    May 4th, 2013 at 11:45 | #53

    John Quiggin makes an excellent case. It is interesting to note that those who criticise the NDIS do not apply the same logic and reasoning to the Opposition’s position. If the NDIS will not deliver for those with disabilities, then why are those with disabilities and their carers so ardently in favour of it? Private insurance is profit based, public insurance is focussed on providing the service. The Coalition’s only committed promise on Medicare is to devolve health care to local communities and hospitals, which sounds like the Federal Government will absolve itself from funding public hospitals. There is no commitment to funding from the National level. If Medicare is privatised, which appears to be the intention of devolving to the local level, it will not just be the disabled who will suffer as a result of a profit-based health care system.

  54. May 4th, 2013 at 11:50 | #54

    Barry Brookes expressed concern that the increased levy would mean that people would have less money to spend at his stores. I expect that he will chuck a fit once I tell him that it costs me 28 cents to send a text from my mobile phone. After all, that’s all money I could be spending at Myers. I feel glad that Barry will no doubt soon be crusading for economic justice for the poor and/or unsociable Australians using prepaid mobile phone services.

  55. May 4th, 2013 at 11:53 | #55

    Arrrgh! I got my Brookes mixed up! I meant Bernie Brookes! I don’t know how I could have made that mistake! Well, actually I do know, so I guess that makes me a liar.

  56. May 4th, 2013 at 18:29 | #56

    @John Quiggin

    Thanks, I’ll let it go.

    Simply restated:

    Billions will be spent. Even my critics here can’t be specific about how this thing is going to work and exactly where the billions will go. I am generally concerned about transparency, oversight, accountability and (a word I despise) “outcomes”.

    I see that the unbridled joy has just started to be tempered with some circumspection about those very issues (here and in the general media) – I see that as a positive thing.

    The future will tell whether I had any reason to be concerned about those things or whether I was just an untrusting fool.

  57. kevin1
    May 4th, 2013 at 20:50 | #57

    @Megan
    Megan, there is a difference between a blueprint (which is what you want) and a roadmap (which enables a choice about direction but the destination is unclear.) The latter is uncertain (it’s a vision) but wouldn’t you expect “real” change – root and branch – to be like that? The journey unveils knowledge about what we want.

    If you think this is a bunch of dreamers indulging themselves, I hope you look at the PC Report (hey, they are as hard-headed as it comes!) and especially the “cameos” I referred to in a previous post, which put some flesh on the bones of the model, and are real scenarios about diverse beneficiaries. The benevolent/govt led model is out of date in today’s society where distributed knowledge and “bottom up” driven programs are the only way forward. People with disabilities don’t want to be “dependents”, just part of a society which acknowledges diversity, and their outsider status means they often know more – living in a mainstream and an alternative culture – than what “we” do!

    This provides the opportunity for social transformation through structural reform because it hands back decision making power over everyday living. It will show what’s possible when trust and power is devolved to the people who are supposed to benefit, and potentially will open the eyes of many mainstream people who need to see “change in action” about how it is possible, and can be initated from below.

  58. May 4th, 2013 at 21:52 | #58

    @kevin1

    I’ve been asked to drop it.

    Please don’t take any lack of further comment or response from me in this thread as acquiescence, concession or acceptance of anything you’ve written.

  59. kevin1
    May 4th, 2013 at 21:58 | #59

    @Megan
    That’s wrong. Our host JQ said “So, I’ll invite you to restate your position briefly, then take this debate to the sandpit.” This is not closing down dialogue, and I’d like to continue it. I don’t expect “acquiescence, concession or acceptance”, just dialogue – this is an important discussion. Please continue to put your opinions out there and engage with others’ opinions.

  60. May 5th, 2013 at 00:27 | #60

    @kevin1

    I’m not sure an assertion of interest in continued dialogue should commence with “That’s wrong.”

    I wasn’t going to raise this but, are you aware that the organisation behind the site you linked to at #12 is run by John Della Bosca?

    I will definitely continue to put my opinions out there. Nothing has stopped me from doing that in the past and nothing will stop me from continuing to do that, but thanks for the encouragement.

  61. J-D
    May 6th, 2013 at 15:18 | #61

    @Megan
    Simply put, the billions of dollars will be spent on giving people with disabilities the things they need.

    The lack of specificity is because people with disabilities have such widely varying needs. It’s ridiculous to ask for a specific list of every specific thing that will be funded, because it’s impossible to make such a list.

    Simply put, again, the way it will work will be that people with disabilities will write plans that describe what they need, and funding will be available for whatever’s in those plans once the plans have been approved.

    Why you (or anybody) would have a problem with either of those ideas is more than I can see.

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