Labor to tackle two of budget’s biggest headaches – aged care and NDIS – in one go

Health Minister Mark Butler will unveil fixes to the country’s struggling aged care system alongside his overhaul of the $50 billion National Disability Insurance Scheme in his pre-budget speech on two of the government’s fastest-growing cost pressures.

Labor will spend $1 billion extra in next month’s budget to cover costs for older people in home care who need help showering, dressing and managing incontinence – services that started incurring out-of-pocket fees when Labor’s new aged care system came into effect last November.

The change for about 350,000 older Australians with home care packages, whether full-time pensioners or self-funded retirees, follows a flood of complaints about people forgoing showers or not leaving the house because of increased costs.

The policy reversal is expected to be among a handful of aged care changes Butler will reveal in a keynote to the National Press Club on Wednesday. The speech will also unveil Labor’s plans to slow growth in the NDIS, including by boosting services outside the scheme so fewer people rely on it.

The aged care system is forecast to cost more than $40 billion this year, while the NDIS bill will hit $50 billion, putting both among the five fastest-growing items in the federal budget and presenting an urgent challenge for Butler, who is in charge of both those areas and the health system.

The government is dealing with unforeseen growth in the NDIS as well as broad integrity problems: the Australian Criminal Intelligence Commission has this month lodged a submission to parliament saying organised crime and professional fraud syndicates have infiltrated the scheme.

The agency has detected NDIS funds used for large cash withdrawals and asset purchases, while cash incentives, or “kickbacks”, were being offered to participants or their families, some of whom were unaware or coerced with intimidation or threats of violence.

The main challenge for aged care is booming demand, as Australia’s ageing population butts up against long wait lists for home care, shortages of nursing home beds and workforce constraints.

Further aged care changes coming in budget

Butler and Aged Care Minister Sam Rae introduced a new aged care system to deal with the influx of Baby Boomers in November, expanding home care services and increasing user payments for those who could afford it. But teething problems, higher costs and resource issues have beset the rollout.

Rae said in a statement provided on Tuesday that the government did not want people missing out on essential care because of cost, which is why Labor listened to feedback and was changing its policy to cover showering, dressing and continence care.

These services will be moved into the “clinical care” category of home care packages, which means they are fully funded. Previously, they incurred co-payments of between 5 per cent and 80 per cent, depending on a person’s means.

“We said when the Aged Care Act commenced that we’d keep watching how the reforms landed and fix what needed fixing. That’s exactly what this is. And as our population ages, we’ll keep doing the work to make sure the system is strong enough, and fair enough, to meet the moment,” Rae said.

NDIS overhaul prompts fear and caution

Additional aged care changes will be unveiled on Wednesday alongside Labor’s broader plans for an NDIS overhaul, which will form the centrepiece of the government’s budget savings plan.

With the scheme still growing at 10 per cent a year, Labor is arguing major changes are required to bring the NDIS onto more sustainable footing and retain its social license.

Large non-profit NDIS providers have welcomed the shift, giving their support to reforms that will return the scheme to its original purpose of providing individual supports to the most severely impaired people with disabilities.

However, many participants and families who use the scheme are anxious that support will dry up in Labor’s efforts to deliver budget savings, particularly because robust disability services outside the scheme are not yet available.

The Greens on Tuesday said they would fight against any cuts, while advocacy group People With Disability Australia launched a national campaign to warn that people risked losing support that enabled them to live full and inclusive lives.

“I rely on about 25 to 30 hours of support each week. That support is not a luxury. It is what allows me to work, spend time with my family and stay out of hospital,” said the group’s president, Jeramy Hope.

“There are pressures in the NDIS, and they are real. But they are coming from bureaucracy, delays and poor decision-making, not from people getting the support they need to live. The NDIS works. I am living proof of that.”

State treasurers, who were briefed on Butler’s changes on Tuesday, reserved their commentary on the federal government’s plans until they were unveiled publicly.

“We do want to see what additional role we can play, but it has to be in accordance with our resources, and we’re looking forward to having further conversations with the Commonwealth after they make their announcements tomorrow,” said NSW Treasurer Daniel Mookhey.

But Queensland was more critical. It is the only state government that has not yet signed onto Thriving Kids, the new disability scheme for autistic children and those with development delays.

“[The Commonwealth] cannot be allowed to abandon the most vulnerable kids without the long-term support they need, simply to meet their budget bottom-line,” said state disability services minister Amanda Camm.

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