Joe Hockey promises to deliver NDIS, signals rollout changes after budget blowout

Updated

The Federal Government has promised to deliver the National Disability Insurance Scheme "in full" but says it will not be delivered with a "blank cheque".

Concerns about the future of the multi-billion-dollar scheme have been triggered by yesterday's release of the Abbott government's first economic statement, which painted a dire picture of the economy and warned of major budget cuts ahead.

The NDIS was a popular policy, initiated by the Gillard government, which passed Parliament last May with bipartisan support.

It will be paid for with an increase to the Medicare levy, and an extra $14.3 billion over seven years committed by the Labor government in the 2012-13 budget.

But Treasurer Joe Hockey, who released the Abbott Government's first budget statement yesterday, has signalled changes to the rollout of the scheme.

"We are determined to deliver the NDIS but it has to be affordable," he told AM.

"I know it might surprise some, but you can actually deliver a program in full but also make it affordable.

"The bottom line from my perspective is we have to find ways to deliver services within an existing budget framework rather than promise on the never-never things with a blank cheque," he told AM.

Assistant Minister for Social Services Mitch Fifield says the scheme is running over budget and he is worried about the costs of administration and overheads.

It is currently being trialled in four areas - Tasmania, South Australia, Victoria's Barwon region and the Hunter Valley in New South Wales.

Senator Fifield has ordered a review of spending so far, but says the Government will honour its spending commitments over the next four years.

Prepare for a cheaper, slimmer NDIS

The Abbott Government has maintained it will honour its commitment to the NDIS. But some signs have emerged that change might be afoot, writes the ABC's Annabel Crabb.

"The Coalition is committed to the announced funding for the scheme," he said.

"But we are determined to make sure the scheme is delivered within the funding envelope and we are determined to ensure the funding gets to the people who need it."

The NDIS is designed to cater to the individual needs of more than 400,000 people with significant and permanent disability.

Labor's Disability Reform spokeswoman Jenny Macklin says the Government must rule out changes like limiting the level of support or slowing the rollout.

"There is no evidence whatsoever that it is ineffective of inefficient," she said.

"It has only just started and people with disability need additional care and support, they need the extra money to make sure that at last people with disability get the support that they deserve."

Former NSW Labor minister John Della Bosca, who heads the Every Australian Counts campaign that lobbied for the NDIS, says the scheme will save money in the long-run.

Hockey defends keeping paid parental wage scheme

"It will actually cut costs over time as many of the other services that are strained and stressed by supporting people with a disability inappropriately, don't have as much expenditure," he said.

"So the scheme will pay for itself over time."

Yesterday's Mid-Year Economic and Fiscal Outlook forecast combined deficits over the four years of the forward estimates of $123 billion, higher unemployment and massive revenue write downs.

Budget deficits forecast in MYEFO 2013/14 - $47 billion

2014-15 - $34 billion

2015-16 - $24 billion

2016/17 - $17.7 billion

The figures have prompted Mr Hockey to tell Australians they will have to "adjust their expectations" about what the Government can provide, signalling heavy cuts to programs and services in the May Budget.

In light of that dismal economic picture, Mr Hockey has been forced to defend keeping the Prime Minister's "signature" policy of a wage replacement parental leave scheme.

"The Paid Parental Leave Scheme actually improves productivity by improving participation in the workplace," he said.

"And the PPL, the Paid Parental Leave Scheme, is fully funded - fully funded and more - in our budget.

Sorry, this video has expired Video: Graeme Innes dismisses suggestions of waste in NDIS (ABC News)

"So we've actually done the yards on finding the savings to pay for a program that improves productivity."

Tony Abbott's scheme is slated to begin in 2015 and will give a baby's primary carer six months leave on the mother's full pay, up to an annual salary of $150,000.

The PPL scheme will cost $5.5 billion a year and will be partly paid for by a 1.5 per cent levy on big business - to be offset by a corporate tax cut.

Opposition Leader Bill Shorten told RN Breakfast the Government needed to "reconsider" the PPL scheme, calling it a "$22 billion white elephant".

The existing paid parental leave scheme was introduced by Labor three years ago and pays a baby's primary carer the minimum wage, currently $622.20 a week for 18 weeks.

Topics: federal-government, government-and-politics, budget, disabilities, australia

First posted