Governance. Funding the NDIS

About CCI The Chamber of Commerce and Industry of Western Australia (CCI) was founded on the belief that the existence of a diverse and thriving business community is an essential ingredient to building a vibrant and prosperous society. For more than 120 years we have advocated on behalf of the Western Australian business community and in doing so we have proudly built a strong membership base representing businesses of all sizes in all parts of the economy. CCI remains dedicated to the pursuit of a competitive and responsible free enterprise economy for the benefit of all individuals in society. This paper has been shaped from the views of a number of CCI s Members in the disability sector, including some who operate in the current National Disability Insurance Scheme (NDIS) trial sites in WA. The recommendations outlined in this report are designed to ensure that all Western Australians with, or who may acquire, disability can access high quality care and support under the NDIS reforms, while ensuring a strong and viable WA disability services sector into the future. Contents Executive Summary... 1 Introduction... 5 Governance... 15 Funding the NDIS... 22 Other Areas of Reform... 26 Pricing Arrangements... 26 Funding Arrangements... 29 Structural and Organisational Changes... 30 Information Available to Participants... 31 Undeveloped Markets... 32 Disability Sector Workforce... 33 End Notes... 36

Executive Summary In 2011, a National Disability Insurance Scheme (NDIS) was identified by the Productivity Commission as the best way to deliver the required social safety net for people with significant and enduring disability in Australia. The previous Commonwealth Government accepted the findings of the Productivity Commission and committed to introduce the NDIS in 2013 through the progressive rollout of NDIS trial sites across Australia. The final year for full rollout of the NDIS across most Australian jurisdictions is scheduled for 2018-19. The primary change intended under the NDIS reforms is the implementation of a self- directed funding model in all Australian jurisdictions. This will place disability funding directly into the hands of people with disability, maximising their opportunities for independence and for full participation in the community. In addition to improving the wellbeing of participants by allowing them to make choices and consume services that they truly value, a self- directed funding model will also change the operating environment for many disability service providers by increasing competition and creating new business opportunities in the market for disability services. Prior to the commencement of the NDIS trial across Australia, the WA Government raised concerns that Western Australians with disability may not be better off under a national model of governance for implementing the NDIS reforms in WA. These concerns arose because: many of the key reforms embodied in the NDIS are not new or innovative to WA; the WA Government already has a strong track record of achieving better outcomes for people with disability when compared to other Australian jurisdictions; and the positive outcomes that Western Australians with disability have been able to achieve are underpinned by the strong partnership between the WA Disability Services Commission (DSC), WA not- for- profit sector, and other WA Government agencies that provide mainstream disability services. However, it was acknowledged that the additional funding proposed under the NDIS would expand and further develop the WA disability system, increasing the capacity of the system to meet unmet demand. As a result of the WA Government s concerns, an agreement was reached in 2013 between the WA and Commonwealth Governments to trial the implementation of the NDIS reforms in WA under two different governance models, the National Disability Insurance Agency (NDIA) national governance model and the WA DSC state implemented and administered disability care and support model, My Way. The trials began on 1 July 2014 and will run over a two year period, after which they are subject to an evaluation by an independent WA Joint Steering Committee. Without pre- empting the outcomes of the trial process, CCI considers that a federated model where DSC administers the implementation of the NDIS reforms in WA will deliver the most beneficial outcomes for Western Australian s with disability and the WA disability services sector. This recommendation is based on consultations with CCI s members in the disability sector and the evidence currently available from the trial sites. 1

Governance The right governance model for WA is critical to ensuring that the full range of benefits from the NDIS reforms are realised for all Western Australians and that the cost to the taxpayer is minimised. By ensuring that decision making occurs at a local level through state specific operational guidelines, a federated model allows decisions to more accurately reflect varying local circumstances and capacities of participants and service providers in WA. A federated model for reform would also preserve incentives for the WA Government to continue to explore innovative approaches to address local challenges, which would enhance the efficiency and cost effectiveness of the NDIS. In addition, the development of essential close relationships between key decisions makers and specialist and mainstream service providers is more likely to occur under a federated model, given WA s unique Delivering Community Services in Partnership Policy (DCSP Policy) and DSC s longstanding relationships with existing community service providers and other State Government agencies that provide mainstream disability services. It is also likely that a federated model, with reduced NDIA representation and bureaucracy in WA, will deliver more efficient and cost effective outcomes for participants on the ground from much of the key infrastructure and resources needed to implement the NDIS reforms already being embedded in the WA system. If a new, national model was implemented in WA, a number of structures and processes could be unnecessarily duplicated or replaced. Notwithstanding, the administrative efficiency of either model will be somewhat reliant on the implementation of necessary, modern business systems and processes. To reduce the risk of inconsistency across jurisdictions in regards to portability and entitlement, the NDIS reforms should be enacted by WA legislation. The WA Government should review the Disability Services Act 1993 (WA) (the DS Act) to include arrangements specified in the National Disability Insurance Scheme Act 2013 (Cth) (the NDIS Act), particularly in relation to: access criteria determination for participants; principles relating to plans; the meaning and assessment of reasonable and necessary supports; compensation payments; and provisions for participants nominees. Funding the NDIS The NDIS reforms come at a substantial cost, with the Australian Government Actuary estimating that in the final year of full rollout, the gross cost of the scheme will total approximately $22 billion. At a time when both the Commonwealth and State and Territory Governments are faced with significant fiscal challenges, all levels of government will need to look at budgetary efficiencies and other reform measures to ensure that sufficient funding is available to implement the NDIS reforms. Over the longer term, the financial sustainability of the NDIS will require that implementation follows best practice insurance principles, as well as the successful application of evidence- based early intervention practices. The implementation of best practice insurance principles includes the development of an actuarial framework to monitor financial performance, potential financial risks and trends against forecast for clearly defined outcomes. Doing this will reduce the risk that in the 2

longer term, the expected liabilities of the scheme exceed the funding stream available to implement it. Assuming that a federated model is implemented in WA, there is a possibility that the WA Government, rather than the Commonwealth Government, will carry the full financial risk associated with higher than projected population numbers or higher per person funded support costs. If this was to occur, it would be essential that any financial sustainability or performance monitoring frameworks adopted by the NDIA are also adopted by DSC, incorporated into a National Partnership Agreement (NPA) between the Commonwealth and WA Governments and implemented in the DS Act to ensure the long run sustainability of the scheme. Having uniform reporting requirements in WA will also ensure that data is consistent across jurisdictions, which is critical to tracking the progress of a federated model and to addressing issues with the scheme as they arise. Other Areas of Reform Even in WA where individualised services have existed for some time, the substantial increase in the amount of funding available under the NDIS combined with an enhanced focus on self- directed funding will stimulate a more competitive, market- based environment. This type of environment will create many challenges and opportunities for the disability services sector as it transitions. A prerequisite for the success of the NDIS is that there must be clear lines of responsibility between the scheme and the mainstream services that connect with it. Ultimately, the implementation of the NDIS should not be expected to meet the needs of people with a disability that are currently met by other service systems. Accordingly, it is anticipated that the NDIS will present many opportunities for private providers in the disability services sector. To ensure these opportunities can be met, it is important that transitional arrangements are put in place to minimise the risk of the capacity or capability of the WA disability services sector diminishing and resulting in a loss of service to some Western Australians with disability. CCI has identified the following areas of reform where there is a role for government to assist both disability sector organisations and/or people with disability in transitioning to the NDIS. Pricing A fully flexible, deregulated price model in which prices can freely adjust to changes in the level of demand will enable participants to exercise control and choice in terms of quantity and quality and give providers an incentive to innovate and provide unique services. Funding Arrangements Under the NDIA model of reform, public funding to disability service providers will be made in- arrears of service delivery, which will require an additional focus by providers on managing cash flow and bad debts at the expense of service provision. To minimise disruption to the sector, funding should be provided in advance of service delivery, as occurs in the My Way model. Structural and Organisational Changes To assist with the transition, the WA Government should deliver further information and education to service providers about the changing operating environment and the impact on the sector. 3

Information Available to Participants The WA Government should provide information to people with disability about the NDIS reforms, the rights of people with disability under the NDIS and the opportunities the NDIS will create for them to access the services they need. Undeveloped Markets Where undeveloped markets that cannot support highly competitive arrangements exist in WA (some rural and remote areas, for example), block funding arrangements should be maintained to mitigate the risk of services being withdrawn from the market. The WA Government should aim to progress these undeveloped markets so that in time, they become more competitive and can support individualised funding arrangements. Disability Sector Workforce - To help alleviate and meet workforce demand in the disability sector in the future, the WA and Commonwealth Governments should undertake the workforce strategies recommended by the Productivity Commission, such as marketing the positive contribution that disability support workers make and providing subsidies for the training of disability support workers. In addition, CCI considers that the industrial relations framework should be reformed to provide employers and employees in the disability services sector the opportunity to establish terms and conditions of employment that facilitate the delivery of individualised services to participants. 4

Introduction In 2011, the Productivity Commission recommended a National Disability Insurance Scheme (NDIS) in Australia as the best way to deliver the required social safety net for people with significant and enduring disability through the provision of high quality, individualised care and support. 1 In the majority of Australian jurisdictions, disability care and support has historically been provided through block funding arrangements, where governments directed funding to service providers through lump sum payments and in turn, service providers would use this funding to deliver disability care and support. However, this funding approach meant that people with disability had little choice over the types of services they received and who they received them from, as they could only obtain narrowly prescribed services from providers that have pre- existing contractual block funding arrangements with government. While the majority of disability care and support around Australia was provided through block funding provisions, due to each state or territory having their own budget restrictions, disability systems across jurisdictions were often inequitable and fragmented. The main aspects that varied across individual state or territory disability systems were generally in relation to: eligibility criteria; assessment tools and procedures; conditions of service provision; and the suite of services, aids and appliances on offer. 2 These localised arrangements created uncertainty in regards to the portability of services and funding across state and territory borders. In many instances under previous arrangements, if a person with disability that received services in one jurisdiction moved interstate, they would lose access to services altogether and have to reapply to receive funding and support services in their new area of residence. In addition, many State and Territory Governments previously offered varying disability support programs within their own jurisdictions, which created even more uncertainty for users in terms of realising the extent and types of supports available to them. In essence, the various disability systems that previously existed within Australia created an inequitable postcode lottery where the types and levels of support that people with disability received depended upon where they lived rather than their support needs. 3 The majority of previous disability care and support offered around Australia was also not sufficient to meet full demand. Analysis undertaken by the Productivity Commission showed that to reduce levels of unmet need and to provide disability care and support that is reasonable and necessary, collective state and territory budget disability spending would need to increase, as a proportion of total budget spending, from three per cent to six per cent. 4 In 2009 terms, this represents an increase in public expenditure of $6.5 billion per annum. Chart 1 shows the previous levels of unmet need in Australian for various types of disability supports. 5

The Productivity Commission also found that disability spending across all Australian jurisdictions (barring NSW) was more volatile than health spending between the 2004-05 and 2008-09 financial years, which in turn created uncertainty for service users about their future levels of support. The calculation of volatility was based on the variation of annual growth in state and territory disability spending per potential service user. 5 In addition, many of the previous disability support programs delivered around Australia were pilot programs with undefined prospects and as a result, provided more uncertain outcomes for participants. To address these concerns, the Productivity Commission recommended a social insurance model, embedded with individualised funding principles, as the most effective and beneficial model for providing disability care and support to the Australian population (See Box 1). Box 1: Why a social insurance model is preferred The Productivity Commission reasoned that when considering the low risk nature of acquiring a disability, the large financial costs involved and that people often have little control over whether or not they sustain a disability, disability care and support should be considered a critical form of government expenditure like Medicare. Further, it should have the same certainty, through insurance principles, of future funding for all Australians regardless of where they live. A social insurance model will safeguard against uncertain outcomes by providing all Australians with confidence over future funding in the event they acquire significant and enduring disability. Further, as all Australians are given insurance, it also provides certainty that if a participant was to cross jurisdictional borders, they would not lose access to their current, or future, level of disability care and support. The total monetary value of certainty cannot be quantified, but is best demonstrated by the 6

common occurrence of individuals paying money to acquire it. For example, people will purchase travel insurance, pay a premium to lock in a fixed interest rate on their home loan and purchase extended warranties on everyday household items. The large value individuals place on having certainty is a significant reason why there is a considerable role for government to provide a social safety net for all of its citizens in the instance they are disadvantaged by disability. However, in considering this, it is noted that a private insurance model, as opposed to one where the Commonwealth Government pools the costs of lifetime care and support across all Australians, would result in less efficient and equitable outcomes for all Australians. If a private insurance model was used, the costs associated with purchasing insurance would be deemed too excessive, especially for those who are low risk and would result in many individuals not receiving full coverage and certainty of support. This would create a situation of adverse selection, where the only people who purchased insurance are those of high risk that have a higher probability of making a claim. Further, it is conceivable that even those who are high risk would find it difficult to afford insurance cover, as a high risk of disability is generally associated with lower socioeconomic groups that have lower than average incomes. In addition, private insurance cover would not be sufficient for severe, costly disabilities. An example of this was cited by the Productivity Commission, where an insurance company offers $50,000 to a family if their child is born with a congenital abnormality. A lump sum amount of this magnitude is very modest when compared to the potential costs associated with lifetime care and support. 6 The previous Commonwealth Government accepted the findings of the Productivity Commission and committed to introduce the NDIS. The introduction commenced in 2013 through the progressive rollout of NDIS trial sites across Australia. The final year for full rollout of the NDIS across most Australian jurisdictions is scheduled for 2018-19. The NDIS reforms will see the use of a self- directed funding model, which addresses many of the concerns relating to self- determination by placing disability funding directly into the hands of people with disability, maximising their opportunities for independence and for full participation in the community. This model will ensure that funding is used by people with disability to meet their own unique goals and aspirations, which will in turn increase their wellbeing through their increased capacity to make choices and consume services that they truly value. The key principle underpinning wellbeing improvements through self- directed funding is that individuals are best placed to know the intricate details of their own unique preferences and should therefore be the ones who ultimately make decisions regarding their consumption of services. There is also the principle that individuals value the capacity to make choices, even when the choices they make are the same as those an outside representative would make for them. This principle stems from the view that being self- determined and having control over one s life is an important aspect of wellbeing. Self- directed funding will also increase competition and provide exciting new business opportunities in the disability services sector. Unlike block funding provisions which create incentives for providers to please the government, providers operating in a self- directed funding model have greater impetus to innovate and differentiate their products to satisfy the individual needs of consumers and capture higher levels of market share. Under the scheme, there would be a substantial increase in public funding for disability care and support. This reflects the consideration that prior to the NDIS reforms, disability care and support in the majority of Australia was not sufficient to meet full demand, which was apparent in the amount of unmet need for disability care and support. 7

Recent estimates made by the NDIA suggest after full national rollout of the NDIS in 2019-20, the total cost of running the scheme will be in the order of $22 billion 7, with funding to be shared between the Commonwealth and State and Territory Governments. To ensure stability in the Commonwealth s share of funding for the NDIS, the Commonwealth Government increased the Medicare Levy by half a percentage point from 1.5 per cent of taxable income to two per cent effective from 1 July 2014. 8 While the costs of the NDIS are substantial, the economic benefits associated with maximising the opportunities for people with disability to participate in the community and contribute both productively and socially are also significant and estimated at an additional $32 billion added to GDP by 2050; largely stemming from employment growth of 320,000. In addition, the Productivity Commission estimated that the NDIS could also result in Disability Support Pension savings equal to a $2.7 billion constant price annuity over 90 years. Disability care and support in WA While people with disability in WA will benefit considerably from the increase in funding for disability care and support under the NDIS, it is important the new approach to disability reform delivers improved outcomes for Western Australians with disability. Prior to the commencement of the NDIS trial sites across Australia, the WA Government raised concerns that Western Australians with disability may not be better off under a national model of governance for implementing the NDIS reforms in WA. These concerns arose because: many of the key reforms embodied in the NDIS are not new or innovative to WA; the WA Government already has a strong track record of achieving better outcomes for people with disability when compared to other Australian jurisdictions; and the positive outcomes that Western Australians with disability have been able to achieve are underpinned by the strong partnership between the WA Disability Services Commission (DSC), WA not- for- profit sector and other WA Government agencies that provide mainstream disability services. WA has long been seen as a leader in the provision of frontline disability services. Over many years, successive WA Governments, in strong partnership with the WA not- for- profit sector, have demonstrated a commitment to high quality care and support for Western Australians with disability. Historical data on disability expenditure by State and Territory Governments shows, per potential recipient prior to the NDIS, WA Government funding to Western Australians with disability has generally been higher when compared to the average funding provided per potential recipient in other Australian jurisdictions. 9 In addition, the individualised funding and relationship- based principles identified by the Productivity Commission as a best practice approach to disability services provision have also been a part of the WA system for some time now. These have historically delivered better individual outcomes for people with disability in WA. As can be seen in Chart 2, the WA employment to population rate of people with disability aged between 15 and 64 years was the highest of all Australian states in 2009 and 2012 at 57.7 per cent and 52.8 per cent, respectively; and considerably higher than the national average in both of these years (50 per cent and 47.7 per cent, respectively). 10 Whilst a difference of a few percentage points can be considered marginal, for a state such as NSW where the employment to population rate of people with disability was 45.9 per cent in 2012, if it were to catch up to the WA figure reported in the same year, an extra 48,111 people with disability would have been employed in NSW in 2012. 8

As well as achieving better employment outcomes, Chart 3 shows that Western Australians with disability generally report higher social inclusion levels. In 2012, some 78.2 per cent of Western Australians aged between 15 and 64 years with a severe or profound disability reported that they had face to face contact with ex- household family or friends in the last week, while the national average during the same period of time was much lower at 70.6 per cent. 11 Further, Chart 4 shows that the proportion of Western Australians with disability in 2012, aged between five and 64 years who reported that the main reason for not leaving home as often as they would like is their disability or condition, was also much lower than the national average (10.1 per 9

cent versus 14.7 per cent, respectively). 12 This suggests that a higher proportion of Western Australians with disability, when compared to other jurisdictions, do not see their condition as disabling and as a result, continue to lead fulfilling lives. A study conducted by Fisher et al. in 2010 further demonstrates the positive outcomes of various individualised funding programs and trials around Australia. The study, which utilised interviews and questionnaires with people with disability and their families, found that 71.4 per cent of respondents reported they were either better off or much better off under individualised funding when compared to their previous funding arrangements, with none reportedly worse off. In addition, some 92.4 per cent of respondents reported that under individualised services, they were able to exercise choice over the types of supports they consume and 81.2 per cent of respondents reported they were either happy, or very happy under individualised services. 13 The WA Government s experience in delivering individualised disability care and support dates back to 1988 when it pioneered the Local Area Coordination (LAC) program that provided people with disability with individualised, responsive and flexible supports linked to local resources and support networks. This experience and expertise has been recognised internationally, with the Ontario Round Table on Individualized Funding, whose main purpose was to develop a policy framework and implementation strategy for individualised funding in Ontario, stating in 2000 that [WA] has the simplest yet highly developed approaches to individualized planning and direct funding. 14 In addition, after making the case that individualised funding was a best practice approach to providing disability care and support, the Productivity Commission found that Western Australia has the most developed and long- standing arrangements for some kind of self- directed support in Australia Most funding allocated to people with disability is based on individual assessment, allows portability of funding between service providers and provides the capacity for client- directed customisation of services Block funding is rarely used to fund service providers [in WA]. 15 10

The positive outcomes Western Australians with disability have been able to achieve are further underpinned by the strong focus of the WA Government to engage and collaborate with the WA not- for- profit sector for the delivery of disability services throughout the state. The benefits of delivering disability services through not- for- profit service providers are outlined in Box 2. Box 2: Benefits of service delivery by the not- for- profit sector There are substantial benefits to service delivery by the not- for- profit sector. In particular, not- for- profit service providers: can often access resources that are not available to government such as volunteers and private sponsorship; often have a long association and close relationship with a specific target group in a community and can be better engaged. This strengthens their capacity to deliver services to that group more efficiently and effectively than government service providers; are more adaptable and capable of delivering a flexible package of individualised support and services compared to government service providers, which are often bound by legislative rules and bureaucracy; are more mission driven than government service providers and as a result have the capacity to generate significant amounts of social capital in a community; and experience the relative stability provided by a five year Service Agreement. The benefits of delivering disability services through not- for- profit service providers have long been recognised by the WA Government. In 2013-14, 71.5 per cent of DSC funds were allocated to non- government organisations. 16 The strong partnership between the WA Government and WA not- for- profit sector is built from the WA Funding and Purchasing Community Services Policy, which was implemented in 2002. This has been further strengthened with the implementation of the Delivering Community Services in Partnership Policy (DCSP Policy) in 2011. The current DCSP Policy seeks to improve outcomes for all Western Australians by building a genuine partnership between the public and not- for- profit community sectors in the policy, planning and delivery of Community Services in Western Australia. 17 It does this through a set of partnership principles and behaviours that focus on: delivering demonstrated improvements in social, cultural and economic outcomes for the WA community; building a partnership between the WA Government and WA not- for- profit sector centred on trust, respect and transparency; actively involving not- for- profit organisations in decision making processes; recognising the valuable contribution of both the WA Government and WA not- for- profit sector in designing and delivering community services; ensuring the sustainability of community services into the future; and empowering and engaging service users in the planning, delivery and design of community services. 18 11

In 2012, based on the principles and behaviours identified in the DCSP Policy and experience with the LAC program, the WA Government implemented its own disability system for WA residents, known formally as WA NDIS My Way (My Way). In consultation with more than 1,300 people including those with disability, their families and carers and the wider disability sector; My Way embeds the individualised, relationship- based approach to disability care and support that is unique to the LAC program, while enhancing and further promoting the capacity and opportunities for people with disability to manage their own funding, which had been underutilised in the LAC program. 19 In the rollout of the NDIS, the Commonwealth Government has followed a national model for reform where operational decisions relating to NDIS funding are centrally determined by the National Disability Insurance Agency (NDIA), which has statutory independence under Commonwealth legislation. In contrast, a federated model would allow the Commonwealth Government to provide additional NDIS funding to State and Territory Governments to manage and administer their own disability systems under nationally consistent guidelines. This would still enable operational decisions to be made at a local level. The Commonwealth Government s preference for a national model of reform is likely to reflect concerns articulated by the Productivity Commission that under a federated model there is a risk disability care and support would, over time, become fragmented, inequitable and subject to a postcode lottery both within and between jurisdictions with agreements breaking down into disputes about who is to pay, how much and for what 20 Despite this, the WA Government raised concerns that a national governance model in WA (as opposed to a federated governance model) would deliver poorer outcomes for Western Australians with disability. 21 In particular, the primary concerns were that under a national model of governance, many decisions would no longer reflect local circumstances, innovation would be stifled across jurisdictions and the high levels of community and cross government engagement built over years of service delivery by DSC would be lost. As a result of these concerns, an agreement was reached between the WA and Commonwealth Governments in 2013 to trial the NDIA model against My Way, in WA, over a two year period beginning on 1 July 2014. 22 These trials are subject to an evaluation by an independent WA Joint Steering Committee that includes senior officials in the State Government (from the Department of Premier and Cabinet, DSC and Mental Health Commission) and the Commonwealth Government (from the Department of Prime Minister and Cabinet, Department of Social Services and NDIA). 23 The current state of disability reform The NDIA and My Way trials (for key elements and statistics of both trials see Box 3) provides a unique opportunity for both the Commonwealth and WA Governments to test the implementation of the NDIS reforms under a national and federated model and to consider the implications of both. The right governance model for WA is critical to ensuring the full range of benefits from the NDIS reforms are realised for all Western Australians and that the cost to the taxpayer is minimised. In particular, the right governance structure will ensure that for any additional public funding, the NDIS reforms will deliver better opportunities for all Western Australians by unlocking the full potential of people with significant and enduring disability to contribute productively and socially in their local communities. 12

Box 3: Key elements of the NDIA Perth Hills and DSC Lower South West trial sites 24 a: Includes approved plans that are both funded and with no funding requested b: Average plan cost of approved plans that have funded supports that are costed c: This is the collective operating expense ratio of all NDIA trial sites The NDIA trial in the Perth Hills follows a national model The Perth Hills NDIA trial began on 1 July 2014. In this trial site, the NDIS has been implemented by the NDIA under the National Disability Insurance Scheme Act 2013 (Cth) (the NDIS Act) using national operational guidelines. The NDIA head office is located in Victoria and the WA regional office is located in Midland. Under the NDIS Act, the Chief Executive Officer (CEO) of the NDIA has a statutory responsibility for operational decisions relating to access, planning, information requirements, registered providers, nominees, compensation and debt collection. Under the Act, the CEO has the capacity to delegate any, or all, of his decision making powers to NDIA planning officers in the regional office. Any officer with delegated powers has a legal responsibility to comply with any directions of the CEO. In the NDIA trial sites across Australia, access and planning decisions have been delegated to NDIA officers, known as specialist planners, who must act in accordance with national operational guidelines. Depending on cost and complexity, some decisions and assessments must be referred to the WA NDIA Branch Manager. In most NDIA trial sites, once a plan has been approved by the NDIA specialist planner, the participant is connected with a Local Area Coordinator (LAC). The LAC then has responsibility to assist the participant to link their planning supports to local community services and disability service providers and to ensure that their supports are coordinated. 25 Across different trial sites in Australia, the NDIA is exploring a number of operating models for LACs that include direct employment by the NDIA and contracting and outsourcing arrangements to the 13

private sector. In the Perth Hills trial site, the NDIA is also exploring the benefits of combining the specialist planner and LAC roles as a best practice approach. 26 The My Way trials in the Lower South West and Cockburn and Kwinana regions follow a federated model The Lower South West My Way trial began on 1 July 2014, while the Cockburn and Kwinana region My Way trial began on 1 July 2015. In these trial sites, My Way has been implemented by DSC in accordance with Part 4B of the Disability Services Act 1993 (WA) (the DS Act), using state specific operational guidelines. The DSC is a WA State Government agency established under the DS Act to provide disability services and support directly and to fund non- government disability service providers. Under Part 4B of the DS Act, responsibility for operational decisions that are conferred to the CEO of the NDIA in relation to access and planning under the NDIS Act are transferred to DSC. However, these must be consistent with requirements in the NDIS Act. In the My Way model, access and planning decisions have been delegated to DSC officers, known as My Way Coordinators, who must act in accordance with state- specific guidelines established by DSC. Depending on cost and complexity, some assessments must be referred to the Office of the Director General at DSC. My Way Coordinators also have a direct responsibility for on- going assistance to participants to link their planning supports to local community services and disability service providers; and to collaborate with other State Government agencies that have responsibilities to provide disability services to ensure that all supports are coordinated. 27 14

Governance There are costs and benefits to both a national and federated model for implementing the NDIS reforms. However, CCI considers the benefits of a federated model where DSC administers the implementation of the NDIS reforms in WA outweigh the minor residual risks or costs accompanied with doing so. Capacity for decisions to reflect local circumstances Across Australia, the goals and aspirations of people with significant and enduring disability, their local communities and the capacities of local service providers will vary substantially and reflect a diverse range of economic, social, geographic and environmental factors. Under a national model, all decision makers must act in accordance with national operating guidelines established by the CEO of the NDIA. While national operating guidelines for decision makers are more likely to ensure uniform outcomes for people with disability regardless of their jurisdiction, there is a risk that they will restrict the ability of decision makers to make assessments that accurately reflect local circumstances, challenges and capacities. The principle of subsidiarity outlined in CCI s Federalism in Australia: A Discussion Paper suggests that political authority should be exercised by those agencies closest to the citizens affected by their decisions. 28 In the case of disability services provision in WA, this can be considered as the lowest competent authority that is able to effectively implement and administer the NDIS reforms. If there had been a demonstrated case of market failure in the previous provision of disability services in WA, then it would be understandable if DSC was not deemed the appropriate authority to implement the NDIS reforms effectively. However, given DSC s strong track record of being at the forefront of innovation in the delivery of individualised services to people with disability in WA and its long history of achieving better outcomes for people with disability in WA when compared to other Australian jurisdictions, CCI considers that there has not been a demonstrated case of market failure in the provision of disability services in WA. As a result, the responsibility for implementing the NDIS reforms in WA should remain with DSC under a federated model. One of the chief considerations of the subsidiarity principle is that State and Territory Governments are better placed than the Commonwealth Government to understand the local circumstances of people with significant and enduring disability in their jurisdiction. This enables them to identify the most efficient and cost effective mechanism for delivering supports based on local knowledge of the capacities of both mainstream and specialist disability service providers. CCI notes this was also the view expressed to the Productivity Commission in 2011 by numerous WA disability service providers through submissions to its Inquiry into Disability Care and Support. For example, the submission by the Autism Association of WA stated: The Autism Association of Western Australia has concerns regarding the establishment of any new system that bypasses State responsibility and the achievements of States such as Western Australia. In our view, the further people with disabilities are from those who ultimately make decisions about matters that impact on their lives, the more likely they are to be disempowered and disadvantaged. 29 15

While the submission by the Centre for Cerebral Palsy (WA) stated: State disability authorities have a good understanding of local features, characteristics and factors and have organisational structures that suit the needs of local circumstances. Western Australia has a very effective and inclusive approach to the development and provision of disability services. 30 Incentives for innovation and continuous improvement A federated model for reform would preserve incentives for the WA Government to continue to explore innovative approaches to address local challenges, which would enhance the efficiency and cost effectiveness of the NDIS. By ensuring decision making occurs at a local level, a federated model will also allow the State and Territory Governments to respond innovatively to local challenges within their own jurisdictions. This approach allows each jurisdiction to learn from experience in other states and territories and is expected to lead to the adoption of best practice which will deliver beneficial outcomes across Australia. As stated in CCI s Federalism in Australia: A Discussion Paper, Diversity encourages experimentation and provides examples against which to judge experiments The best examples are imitated by others. Equally important, the worst examples are avoided. 31 The capacity and freedom for the WA Government to respond innovatively to local challenges in the past has led to disability reforms that have been internationally recognised as best practice. Indeed, many of the reforms pioneered in WA are cornerstones of the NDIS, including an individualised, self- directed approach to providing responsive and flexible supports to people with disability and a greater reliance on the not- for- profit sector for the delivery of those supports. There is already evidence that, through the My Way trial, innovative approaches that are now established features in My Way have influenced the direction of disability reform at a national level. For example, the benefits of using My Way Coordinators as a single, continuous point of contact for participants in the NDIS has been recognised in the NDIA s first annual report, which states that Operating models at the Agency s three new trial sites Barkly in the Northern Territory, Australian Capital Territory and Perth Hills in Western Australia will trial combining planner and LAC roles to achieve continuity of relationships and streamlined processes so that people have less or more support during the planning process according to their needs. The My Way site in Western Australia will also serve as another means of testing operating models, ensuring the NDIS ultimately adopts the best model. 32 Community engagement and access to mainstream services The development of close relationships between key decisions makers and specialist and mainstream service providers in WA is more likely to occur under a federated model, given WA s unique DCSP Policy and DSC s longstanding relationships with existing community service providers and other State Government agencies that provide mainstream disability services. The Productivity Commission recognised the importance of a strong partnership between the NDIS and mainstream service providers by indicating that a key policy goal of the scheme should be to connect participants with mainstream services (both public and private) where possible. A strong interaction between the NDIS and mainstream service providers will increase participants community involvement and independence by reducing their reliance on isolated specialist disability services. A greater focus on providing informal supports will also enhance the efficiency and long run sustainability of the scheme. 33 16

The importance to the long run sustainability of the scheme of establishing these relationships has also been recognised by the Chairman of the NDIA Board. In the NDIA s first annual report, the Chairman s message noted a key feature of the NDIS is that in addition to formal supports, the scheme enables people with disability to achieve their goals by providing access to community and mainstream services the NDIS is as much about community engagement and improved access to mainstream services, as it is about the provision of funded supports 34 The interaction between the NDIS and other mainstream service providers, such as the Department of Health and the Department of Housing, will be extremely complex and will be surrounded by uncertainty regarding the boundaries of service delivery between specialist and mainstream disability service providers. CCI considers that DSC, rather than a new national agency such as the NDIA, would be best placed to manage this interaction. A new national agency such as the NDIA is less likely to establish the same close relationships that DSC has with other State Government agencies and is less likely to have the same inbuilt understanding that DSC has of these mainstream service providers. In addition, a national governance model could also lead to a loss of engagement with specialist disability service providers. Consultations with CCI members that have operations in both the Perth Hills NDIA and Lower South West My Way trial sites have already raised these concerns. As an indication, Box 4 provides two case studies of the planning processes and outcomes for two adolescent males with similar goals but residing in different trial sites. Prior to implementation of the NDIS, both adolescents received disability funding for supports that were provided to them by the same disability service provider. The different experiences in negotiating plans with NDIA specialist planners and My Way Coordinators provides an example of the importance of strong engagement and close relationships with disability service providers in achieving positive outcomes for people with significant and enduring disability. Box 4: Case studies The importance of community engagement Case Study One RJ, Perth Hills, NDIA Trial Site RJ is a young adolescent male in the Perth Hills region. Prior to implementation of the NDIS by the NDIA in the Perth Hills, RJ had access to respite (or short- term accommodation support) with Activ Foundation. After implementation, RJ wanted to continue with the same level and quality of respite. After gaining access to the NDIS, RJ and his family met with a NDIA specialist planner and access to respite was defined as one of RJ s goals in his initial plan. However, the level of respite that RJ had accessed prior to the NDIA trial was not fully explained to the NDIA planner. As a result, a realistic allocation of funding for similar respite was not included as part of his plan. After his initial planning session, RJ had only $2,000 allocated as a fixed support for respite and $8,000 as a flexible support but allocated to psychology services. Activ Foundation had a previous relationship with RJ as his primary service provider, including for respite. When RJ and his family contacted Activ Foundation to inform them about the funding allocation for supports determined in the initial planning session, Activ Foundation recommended that RJ and his family make another appointment with the NDIA planner to review the plan and allocate additional funding for respite. However, it took RJ and his family two months to obtain another appointment with the NDIA planner to review and amend his plan. After this appointment, the NDIA planner allocated $12,000 to RJ for respite services. 17

Through the planning process, despite knowledge that Activ Foundation was a previous service provider, the NDIA specialist planner did not liaise with Activ Foundation. RJ and his family consider that access to services and outcomes for RJ could have been improved if the NDIA had been more willing to talk to, and engage with, Activ Foundation during the planning process. With better engagement with Activ Foundation, it is likely the appropriate allocation of respite funding would have been allocated to RJ in his original plan leading to lower levels of uncertainty and frustration for RJ and his family throughout the process. Case Study Two HD, Lower South West, My Way Trial Site HD is a young adolescent male in the Lower- South West region. Prior to implementation of My Way by DSC in the Lower South West region, HD had access to respite with Activ Foundation. After implementation, HD wanted to continue with the same level and quality of respite. After gaining access to My Way, HD and his family met with a My Way Coordinator and access to respite was defined as one of HD s goals in his initial plan. After the planning session was complete, the My Way Coordinator contacted and engaged (with the participant s and family s permission) with Activ Foundation to confirm that HD was an existing customer. In addition, the My Way Coordinator actively consulted with Activ Foundation to determine if the respite allocation in the plan was appropriate to maintain HD s level of respite services prior to the implementation of the Lower South West My Way trial. Through HD s My Way Coordinator, Activ Foundation requested a copy of HD s plan and HD decided not to share his plan. Activ Foundation willingly accepted this decision due to the occasional nature of the service. Activ Foundation considers that access to the plans developed by My Way Coordinators, with the permission and in consultation with the My Way participant, to be essential for better outcomes. Although Activ Foundation would have received a copy of the funding sheet prepared by the My Way Coordinator that outlined the funding strategy for HD, Activ Foundation has indicated that it is not always possible to accurately infer desired outcomes for participants from funding strategies. After the planning process was completed, the My Way Coordinator has been in contact with HD to ensure that he is on track to achieve his desired outcomes. In addition, the My Way Coordinator has been readily available to talk to HD s family when this has been required. Further, the My Way Coordinator has made contact with Activ Foundation to confirm that services were being delivered to HD. CCI does, however, recognise the differences in the demographics between participants in the Perth Hills NDIA trial site and the Lower South West My Way trial site; institutional, historical and cultural factors working together; having a disability system that was already well- established in the Lower South West; and competition between the two trial sites, may have contributed to more favourable access and engagement outcomes in the Lower South West My Way trial site. CCI also recognises the ability of the NDIA to establish close relationships between both mainstream and specialist disability service providers would inevitably improve over time under a national governance model. However, the relationships and experience of DSC with the WA disability sector reflects 25 years of community and sector engagement, and this would take some time to replicate. 18

Efficiency and cost effectiveness It is likely a federated model, with reduced NDIA representation and bureaucracy in WA, will deliver more efficient and cost effective outcomes for participants on the ground from much of the key infrastructure and resources needed to implement the NDIS reforms already being embedded in the WA system. If a new, national model was implemented in WA, a number of structures and processes could be unnecessarily duplicated or replaced. CCI does note, however, that the administrative efficiency of either model will be somewhat reliant on the implementation of necessary, modern business systems and processes. Nevertheless, as the NDIS reforms are not particularly new or innovative to WA, much of the key infrastructure, resources and processes needed to implement these reforms are already well established in the State. In particular, these include the individualised funding principles and procedures that are already implemented in WA, DSC s already established physical infrastructure and a number of DSC directorates that have been in place for over 20 years. Because of this, the financial costs associated with the establishment of a new lead agency in WA and the recruitment and accommodation of new staff for this agency, are likely to be greater than if the existing structures in WA were built upon and expanded. In the Australian Government Actuary s (AGA) NDIS Costings Review, it was estimated that the total gross administrative costs (which includes regional administration costs and the costs associated with developing information technology and other required infrastructure) of establishing and operating the NDIS in Australia between 2013-14 and 2018-19, would total approximately $2.3 billion. Over the same period of time, the total gross costs associated with employing and sourcing LAC s was estimated at roughly $3.8 billion. For both of these estimates, the majority of expenditure comes as the implementation of the scheme approaches the first year of full rollout in 2018-19. 35 It has been argued that in the long run a centralised system run by a single Commonwealth Government agency will be more cost efficient as it can develop economies of scale. However, this concern is lessened when considering that the WA Government has a well- developed history of delivering disability services in a more cost efficient manner than all other State and Territory Governments, including the Commonwealth Government. As an indication of its recurrent aptitude to deliver disability services in a cost effective manner, for every financial year since 2004-05 (barring 2010-11) the WA Government has reported the lowest amount of administrative expenditure as a proportion of total recurrent expenditure on specialist disability services of all State and Territory Governments and the Commonwealth Government. Further, its current proportion of 3.7 per cent is much lower than the national average of 6.6 per cent (see Chart 5). 36 In addition, the DSC Lower South West operating expense ratio, which represents the proportion of total costs that are administrative, is currently lower than the NDIA s operating expense ratio. 37 19

The uniformity and portability of entitlements A key benefit of a national model is that it guarantees a consistent level of service delivery between jurisdictions for people with disability, with minimal risk of fragmentation. A national model is designed to ensure that the pace of disability reforms introduced under the NDIS will be similar across jurisdictions and that people who have, or may acquire, significant and enduring disability will receive the same entitlements based on need, regardless of their jurisdiction. Further, these entitlements will be portable across jurisdictions. The benefits of a national model are more substantial in jurisdictions where governments have been less committed to improving disability care and the capacity to access supports over time. Without a national model, there is a risk that governments in some of these jurisdictions could lack the political will, or the capacity, to fully develop and fund the institutional framework that is required to realise key reforms embedded in the NDIS. There is also the risk that over time, jurisdictions in a federated model would gradually develop their own unique assessment and eligibility tools and agreements would break down regarding each government s own relative funding contribution. This would once again result in disability spending across jurisdictions being inequitable and localised. Given ongoing bipartisan support for high quality care and support for people with disability, this issue is less of a concern for WA and is not likely to outweigh the benefits of a federated approach. WA s track record in providing high quality care and support for people with disability, based on local relationships and effective collaboration between various State Government agencies, means the introduction of a national model is not likely to deliver the same scale of benefits for WA as it will in other States where disability support has been lacking. 20

CCI considers that there is minimal risk the NDIS reforms implemented under a federated model in WA would proceed at a slower pace, or that entitlements for Western Australians with disability would be lower, compared with other jurisdictions where the NDIS reforms are implemented under a national model. The risk of inconsistency across jurisdictions in regards to portability and entitlement, under a federated model in WA, can also be mitigated by the introduction of a National Partnership Agreement (NPA) between the Commonwealth and WA Governments, which will ensure policy consistency and guarantee Commonwealth and State funding for the scheme. The NDIS reforms should be enacted by WA legislation. The WA Government should review the DS Act and include arrangements specified in the NDIS Act, particularly in relation to: access criteria determination for participants; principles relating to plans; the meaning and assessment of reasonable and necessary supports; compensation payments; and provisions for participants nominees. Governance Recommendations G1: The NDIS should be implemented under a federated model of reform in WA, where DSC is retained as the lead WA agency for reform. A federated model will result in better outcomes for people with significant and enduring disability in WA including: better capacity for local decisions and assessments to reflect the local circumstances and capacities of Western Australians with disability and their service providers; incentives for innovation, continuous improvement and the adoption of best practice reforms in WA, which can then be shared with other jurisdictions; a high level of community engagement and better access to mainstream service providers; and more cost effective and efficient outcomes for participants by utilising existing infrastructure and resources that are already embedded in the WA system. G2: A National Partnership Agreement between the Commonwealth and WA Governments is needed to remove any residual risk that a federated model in WA could lead to outcomes for Western Australians with disability that are lower than in other jurisdictions, or not portable across jurisdictions. A National Partnership Agreement will also guarantee Commonwealth and State funding for the scheme. G3: The WA Government should review the Disability Services Act 1993 (WA) to include arrangements specified in the National Disability Insurance Scheme Act 2013 (Cth), particularly in relation to: access criteria determination for participants; principles relating to plans; the meaning and assessment of reasonable and necessary supports; compensation payments; and provisions for participants nominees. 21

Funding the NDIS Given the significant costs for both the Commonwealth and State and Territory Governments in implementing the NDIS, it will be important that the reforms are considered in the broader budget context to ensure the viability of the scheme over the longer term. The NDIS reforms come at a substantial cost and are being introduced at a time when all levels of government are faced with significant budget challenges. The cost of the NDIS to government has been subject to actuarial review. The AGA has estimated that the cost of the NDIS, in its final year of rollout (in 2018-19) will be in the order of $22 billion. 38 The NDIA has indicated that, in 2019-20 (the first year of full implementation), the Commonwealth will provide funding of $11.7 billion (approximately 53 per cent of total scheme costs) and that the remainder will be paid by the State and Territory Governments. 39 As outlined in Box 5, CCI has also identified a number of upside risks to these cost projections. CCI notes, however, that the future financial costs of the NDIS are also dependent on the effectiveness and successful implementation of early intervention approaches. The Productivity Commission identified evidence- based early intervention as a necessary part of the NDIS and as a way of potentially lessening the impact, or preventing the deterioration, of an existing disability. This will lower the costs associated with lifetime care and support over the longer term, enhancing the financial sustainability of the scheme. 40 Box 5: Upside risks to cost projections for the NDIS Based on an examination of the assumptions that underpin the AGA estimates, CCI considers there are several upside risks to these cost projections. On the demand side, the AGA estimates: could underestimate growth in NDIS participants as the scheme matures the AGA has estimated growth in participant numbers to be one per cent per annum whereas data from the Survey of Disability, Ageing and Carers; Census data; and Disability Support Pension data suggest that the population of people with disability in Australia has been growing in excess of two per cent per annum in recent years; do not take into account the rising prevalence of disability as Australia s population ages; do not take into account impacts from scheduled pension age increases which will mean that more people with disability are eligible for the NDIS. This could lead to back end growth because, under current arrangements, participants have the option of staying on the scheme or deferring to the aged care sector once they reach the pension age; do not take into account the possibility that political pressure from various disability support groups will lead to an expansion in the number of people with disability that are eligible for the scheme. There are already those in industry advocating for eligibility to be expanded to individuals over the pension age; and do not take into account the financial costs of the newly developed framework for Information, Linkages and Capacity Building (ILC) or formerly known as Tier two. 22

On the supply side, the AGA estimates: do not take into account rising costs as demand for disability care and support workers expands over time, creating shortages in the workforce for this sector that will result in upward pressures on wages over time. These pressures are likely to be exacerbated by additional demand for similar workers in the aged care sector as Australia s population ages. In addition, for a geographically large state such as WA, any cost estimate is likely to underestimate the true cost of providing individualised support in rural and remote regions. Not only will costs be escalated through potential premiums payed to service providers in these regions, but they will also be escalated due to the costs associated with establishing necessary regional infrastructure. As well as these risks, there is also the risk that the economic employment gains stated by the Productivity Commission will not be achieved and if so, the associated economic and financial benefits will not be realised. The realisation of the Productivity Commission s stated employment gains is dependent on a number of other scenarios taking place in combination with the NDIS reforms, for example, Disability Support Pension reform, people with disability having greater aspirations to gain employment and an increased willingness of businesses to employ people with disability. 41 All governments will need to reorder their funding priorities Notwithstanding the above, the full cost of the NDIS, as estimated by the AGA, is not currently reflected in either the 2015-16 Commonwealth or WA Budget Papers. The Commonwealth Government has, in an attempt to ensure a level of funding stability, increased the Medicare Levy by half a percentage point from 1.5 per cent to two per cent. This increase will not cover the full costs of the scheme and, as a result, the revenue stream required to cover the full rollout of the NDIS remains uncertain. It is therefore quite clear that all levels of government will need to look at quantifiable efficiencies and other public sector reform measures to ensure that sufficient funding is available to implement the NDIS reforms and ensure the scheme can be funded into the future. Reforms undertaken by the public sector to secure the magnitude of funding required to implement the NDIS should be guided (in the first instance) by the National Commission of Audit at a Commonwealth level, and the Economic Audit Committee and Economic Regulation Authority s Microeconomic Reform Inquiry at the WA State level. Further, given the significant revenue write- downs that have occurred since the 2014-15 State Budget, the WA Government should expand the current Agency Expenditure Review process to a second tranche of government agencies. This will ensure programs funded across the state still remain a priority for the government, are delivered as efficiently and effectively as possible and savings measures can be implemented as required. If governments do not undertake these needed reforms, there is the risk that the full costs of implementing the NDIS will result in significant public sector debt and the scheme may be deemed unsustainable in the future, potentially resulting in many people with disability not receiving the levels of care and support guaranteed by the NDIS. 23

An insurance culture must be embedded across DSC Over the longer term, the financial sustainability of the NDIS will require that implementation follows best practice insurance principles, which includes the development of an actuarial framework. This will reduce the risk that in the longer term, the expected liabilities of the scheme exceed the funding stream available to implement it. According to a report by PricewaterhouseCoopers, Planning for a sustainable disability sector, some of the key insurance principles that should be adhered to are: an accurate assessment of reasonable and necessary support to ensure that the levels of supports provided are uniform across jurisdictions and maintained within these definitions; a performance monitoring framework that assesses and reports on the individual outcomes achieved by participants, with particular reference to participants ability to exercise control and choice in their lives; a focus on early intervention and prevention to ensure that needs are met before support becomes costly; and a strong actuarial monitoring and governance framework that monitors the financial costs of the scheme and comments on any identifiable financial trends or risks. 42 Sound risk based and financial performance monitoring frameworks are essential Assuming that a federated model is implemented in WA, it will be essential that DSC has a sound risk based management framework, so that forward estimates are accurate and can be carefully budgeted. A sound performance monitoring framework to measure actual financial outcomes against projections is also critical for DSC, when considering that under a federated model there is the possibility that the WA Government, rather than the Commonwealth Government, will carry the full financial risk associated with higher than projected population numbers or higher per person funded support costs. The NDIA risk management framework is set out in the National Disability Insurance Scheme Risk Management Rules 2013, which aligns closely with the provisions in the Commonwealth Risk Management Policy. In accordance with part 6A of the NDIS Act, the NDIA has also hired a scheme actuary, who produces quarterly reports to the NDIA CEO that are used by the NDIA Board and an appointed Reviewing Actuary to monitor financial performance, potential financial risks and trends against forecast for clearly defined outcomes. Further, the NDIA has also introduced management information dashboards to monitor operational performance. CCI considers that NDIA is following good practice and that, under a federated model in WA, any financial sustainability or performance monitoring frameworks adopted by the NDIA should also be adopted by DSC, incorporated in a NPA between the Commonwealth and WA Governments and implemented in the DS Act to ensure the long run sustainability of the scheme. Having uniform reporting requirements in WA will also ensure that data is consistent across jurisdictions, which is critical to tracking the progress of a federated model and to addressing issues with the scheme as they arise. Given the expense associated with establishing financial performance and risk management systems, in the event a federated model is adopted in WA, DSC could also consider collaborating and 24

utilising the expertise of the NDIA Scheme and Reviewing Actuaries, which will also have the benefit of avoiding duplication and potentially reducing costs. In the current My Way trial this is already occurring in part, with DSC utilising the NDIA s Reviewing Actuary, the AGA, as their Reviewing Actuary also. Sustainability Recommendations S1: For the NDIS to be sustainable in an environment of fiscal constraint, all governments should undertake a program of public sector reform. This should be guided by the National Commission of Audit at a Commonwealth level and the Economic Audit Committee, Economic Regulation Authority s Microeconomic Reform Inquiry and an expanded Agency Expenditure Review process at the WA state level. S2: Assuming that a federated model for implementing the NDIS reforms is adopted in WA, an insurance culture must be embedded in DSC that includes the establishment of sound risk management and financial performance monitoring frameworks that are consistent with those arrangements in the NDIS Act and other associated Commonwealth legislation. The establishment of these arrangements should be incorporated in a NPA between the Commonwealth and WA Governments and implemented in the Disability Services Act 1993 (WA). S3: Given the expense associated with establishing risk management and financial performance monitoring frameworks, if a federated model is adopted in WA, DSC should consider collaborating and utilising the expertise of the NDIA Scheme and Reviewing Actuaries, which will also have the benefit of avoiding duplication and potentially reducing costs. 25

Other Areas of Reform Even in WA where individualised services have existed for some time, the substantial increase in the amount of funding available under the NDIS combined with an enhanced focus on self- directed funding will stimulate a more competitive, market- based environment. This type of environment will create many challenges and opportunities for the disability services sector as it transitions. Increasing competition is expected to improve the range, quality and quantity of disability services available to people, create new business opportunities for existing service providers to expand their operations and create new business opportunities for new service providers to enter the market. To capture these opportunities as the NDIS rollout occurs, it is important that transitional arrangements are put in place to minimise the risk of the capacity or capability of the WA disability services sector diminishing and resulting in a loss of service to some Western Australians with disability. Pricing Arrangements Under the NDIS, a more competitive market for disability service providers will ensure that the supports available to people with disability are exactly those that will enable them to achieve their goals and aspirations, and that these supports are delivered as cost effectively as possible. In particular, a fully flexible price model in which prices can freely adjust to changes in the level of demand will be the driving mechanism to ensure the services provided meet the needs of people with disability. CCI supports the recommendation made by the National Disability Services (NDS) and NDIA Pricing Joint Working Group that, when the market for disability supports is fully mature, the maximum prices of all supports should be deregulated to enable participants to exercise control and choice in terms of quantity and quality and to give providers an incentive to innovate and provide unique services. 43 In addition, CCI also considers a mature market would also benefit from a deregulated minimum price. Compared to a model where minimum prices are fixed, this could provide opportunities for people with significant and enduring disability to purchase more supports at lower prices without compromising their health or safety. However, it will be critical in this market where some providers may compete on price at the expense of quality, participants have the information and assistance required to make informed judgements about the quality and risks of services they choose to consume. In principle, the pricing models in the NDIA and My Way trials differ quite substantially. The NDIA trial operates with a fixed price model while the My Way trial operates with a flexible price range. CCI considers it important to identify both the costs and benefits of all pricing models as the Commonwealth and WA Governments explore pricing arrangements during the transition period. The NDIA uses a fixed price In the NDIA trial, all supports are priced according to a fixed price, determined centrally by decision makers in the NDIA. The fixed price is a maximum price that service providers can charge, and is a price which service providers have agreed to provide services at. Over time, the NDIA has indicated that it will move to an efficient price model and finally to a deregulated pricing model when the market is sufficiently mature. The advantage of a fixed price model is that it provides a level of certainty about the quality and quantity of service from any given level of disability funding. The disadvantage is that, unless the price is actually efficient, it could limit both the quantity and quality of services that are available. 26

This will not only limit opportunities for choice and control, but could also have a negative effect on outcomes and, in turn, the sustainability of the NDIS. In consultation with members, CCI considers that the NDIA fixed price may be efficient in some cases, but only for a limited range of disability supports. Box 6 considers the capacity of any agency to determine an efficient price for supports under different scenarios. In line with both the intent of the NDIS and free market principles, CCI considers any model of fixed prices will impose costs in terms of reduced outcomes for people with significant and enduring disability that exceed the benefits of certainty and could compromise the sustainability of the NDIS over time. Box 6: The capacity of any agency to determine efficient prices The capacity of any agency to determine an efficient price for disability supports is reliant on its capacity to correctly identify all of the costs and benefits associated with providing supports. While costs may be reflected in large part with reference to the underlying costs of service provision, the benefits are more difficult to quantify and should include an assessment of the benefits to outcomes for people with significant and enduring disability. Fixed prices are more likely to be efficient for supports that are accessed regularly by people with and without significant and enduring disability. In these markets, an efficient price may be determined through a comparison of prices paid for similar supports by people without disability as long as the demand and supply for supports is similar across both cohorts. Useful examples include some physiotherapy supports and most information technology. However, a fixed price is less likely to be efficient for supports where there is no comparable market price outside of the disability sector, particularly if these supports are quite unique to people with significant and enduring disability. Many supports for people with significant and enduring disability are not required, at least to the same extent, by people either without disability or without a similar level of disability. In these instances, the demand and supply of disability supports to people with significant and enduring disability is likely to be more unique and there will be no efficient reference price. Without an efficient reference price outside of the disability sector, a fixed price must be determined by decision makers who, more than likely, do not have a disability and therefore are unlikely to fully understand the range of benefits of the support. In these markets, decision makers may be tempted to price according to an assessment of the underlying costs in order to reduce the costs of the NDIS. A fixed price that only reflects the underlying cost of the support may be efficient, but only for supports where there are a large number of service providers able to deliver that support. In these markets, where competition for disability funding is high, it is likely that prices would be driven down to the cost of providing the support under a deregulated pricing model. In the transition phase, this may be detrimental to some existing service providers who do not have the capacity to adjust quickly to a new operating environment. In a mature market, this loss of service is unlikely to affect the outcomes of people with significant and enduring disability as either the remaining service providers would expand; or new service providers, that are more viable in a competitive market, would enter the market and close any remaining gaps. A fixed price that only reflects the underlying cost of the support will be less efficient in markets where supports are more specialised and are only required by people who have a unique disability. 27

In these markets, where supply is thin, a fixed price that only reflects underlying costs may reduce the quantity and quality of supports below that required to ensure all people with significant and enduring disability have the same equitable access to supports according to need. Specifically, if prices only reflect underlying costs, the fixed price will not provide enough incentives for existing and new disability service providers to expand or offer a wider range of disability supports. This will limit choices and opportunities for some people with significant and enduring disability and particularly those with limited financial capacity to augment their disability funding. My Way uses a flexible price range In the My Way trial, disability supports are priced according to a price band, which prevents the price of supports from falling and rising outside of the stated range. Compared to a fixed price model, CCI considers that there are distinct advantages to a flexible price range. By allowing service providers to charge prices that are not fixed, but rather reflective of the true underlying costs of service provision, a flexible price range provides more incentives for existing and new disability service providers to expand the quantity and quality of disability supports in line with the goals and aspirations of people with significant and enduring disability, as they are more adequately remunerated for doing so. This will consequently give participants more choice and control in terms of selecting their preferred service providers. In addition, it should also allow My Way Coordinators to design more individualised packages. Once an entitlement for any single support is determined and the funding level is fixed, My Way Coordinators, under the price range system, should have the capacity to consider a wide range of support options that include either a lower quantity of higher quality care or a higher quantity of lower quality care. In contrast, under a fixed price model, once entitlement and funding levels are determined, the fixed price of any single support will also be linked to a fixed quantity of that support. In line with the intent of the NDIS and free enterprise principles, CCI considers that the capacity for My Way Coordinators to design more individualised packages for people with disability provides greater opportunity for them to achieve outcomes in line with their goals and aspirations at no extra cost to government. In this way, a price range system will enhance the sustainability of outcomes in the My Way trial. In the transition phase, given the potential for a flexible price range to improve the sustainability of the NDIS, CCI supports the price range model over a fixed price model as long as appropriate mechanisms are in place to safeguard against operational practice that could lead to lower outcomes and a restriction of choice for people with disability. Under a price range system, this includes only presenting support options to participants that have been priced at the lowest price in the flexible range in order to reduce costs. Pricing Recommendations P1: If the NDIS is implemented through a federated model in WA and when the disability services market in WA is sufficiently mature, the maximum price of disability supports should be deregulated. Provided that participants have the information and assistance required to make informed judgements about the quality and risks of services they choose to consume, the price of all disability supports should be fully deregulated. A fully deregulated pricing model will substantially improve the long run sustainability of the NDIS. 28

P2: In the transition to a deregulated pricing model, a flexible price range should be used. The upper and lower limits of this price range for all services should be developed by the WA Government through extensive consultation with WA industry. P3: Under any pricing model, to ensure that choices available to participants are not restricted or distorted, operational guidelines should require that individual planners present participants with the full range of support and service options available to them. Funding Arrangements There are substantial differences in funding arrangements for disability service providers in the NDIA and My Way trials. In the NDIA trial, public funding is provided in- arrears of service delivery. In the My Way trial, public funding is provided in advance. The NDIA trial provides public funding in- arrears The funding arrangements in the NDIA trial have demonstrated that the long run viability of disability service providers will require that they build capacity now to increase and retain a level of cash flow that is sufficient to meet their day to day operating costs and to manage bad debts. According to the NDS May 2014 Business Confidence Survey, only 33 per cent of disability service providers in the disability sector meet recommended cash flow standards, which is three months or more of spending reserves. 44 If disability service providers do not build their capacity to meet required cash flow standards now, then there is a considerable risk that they will fail under the NDIA funding arrangements where payments are made in- arrears of service delivery. The My Way trial provides public funding in advance In the My Way trial, DSC provides public funding to service providers in advance of service delivery on a quarterly basis. In addition, any contractual arrangements between service providers and DSC that were established prior to the introduction of the NDIS have been maintained. 45 Under these funding arrangements, constraints on cash flow in the My Way trial have not been quite so acute as the market has opened up to increased levels of competition and, in turn, has provided greater levels of certainty for the sector. CCI considers that funding arrangements where payments are made in advance of service delivery is preferable, at least in the transition to a more competitive operating environment under the NDIS. Funding in advance of service delivery will be particularly important in WA, where disability services are predominantly delivered by not- for- profit disability service providers. In advance funding arrangements, which allow not- for- profit disability service providers to maintain their previous budgetary systems without undue focus on the management of bad debts, will ensure that the NDIS reforms can be implemented with the least disruption to a substantial proportion of the WA disability services sector. This will be important to ensure that a continuous stream of valuable and diverse disability services can be delivered as the disability sector adjusts to the NDIS self- directed funding model. 29

Funding Recommendations F1: Public funding to WA disability service providers should continue to be in advance of service delivery. This will ensure that service providers can operate with more certainty, without an undue focus on the management of bad debts and that a continuous flow of valuable and diverse services can be provided in WA as the disability service sector adjusts to the NDIS reforms. F2: If in- arrears funding is chosen as the preferred model in WA following the completion of the NDIA and My Way trials, the timing of any transition in funding arrangements to payment in- arrears must be known with certainty and only determined after extensive consultation with the WA disability services sector. Structural and Organisational Changes Regardless of whether the NDIS is implemented under a national or federated model, there will be structural and organisational challenges for disability service providers as the sector becomes more competitive. As well as developing capacities to deliver new services, organisations will also have to develop strategies to increase their presence in the market as well as identify and capture new opportunities for collaboration, both within and outside the disability services sector. In its Report to the Commonwealth Government, Planning for a sustainable disability sector, PricewaterhouseCoopers has indicated it will be essential for all disability service providers operating in a more competitive operating environment to update their business strategies and processes. They will need to pay particular attention to developing: governance arrangements; risk management frameworks; stakeholder engagement strategies; pricing and cost modelling; marketing and communication strategies; staffing levels; and information and communication technology. 46 There is evidence that many disability service providers have not yet started preparing for the structural and organisational changes that will ensure their long term viability under the NDIS. In a survey conducted by PricewaterhouseCoopers, some 55 per cent of respondent organisations in the disability services sector believed that only minor changes were necessary to their organisation s formal structure in transitioning to a NDIS. 47 In consultation with its members, CCI considers there is a general lack of awareness across the WA disability services sector about the sorts of challenges that can be expected, the changes that may be required under the NDIS and the logic of transition to full implementation of the NDIS reforms in WA subsequent to the completion of the My Way and NDIA trials. This information gap is causing considerable uncertainty and confusion and is one reason why disability service providers are not getting prepared, either quickly enough or at all. While there has been some work done by the WA Government to provide adequate levels of information to providers, there is still a considerable role for the WA Government to close the information gap now by, for example, visiting and presenting information to disability service providers through more publicly known consultation sessions. To further aid organisations in identifying new business opportunities and developing their services, CCI supports the view of NDS 30

in its Disability Support Markets in 2025 paper that consumer demand data should be made available to service providers, which includes detailed analysis of market trends and projections of future demand. 48 Structural and Organisational Recommendations SO1: The WA Government should act to close the information gap that currently exists in the WA disability services sector about the sorts of changes that might be required of them under the NDIS reforms. This can be done by providing detailed information to service providers, with a specific focus on: business and strategic planning in a competitive operating environment; and the logic of transition to full implementation of the NDIS reforms in WA subsequent to the completion of the My Way and NDIA trials in WA. SO2: To assist organisations in identifying new business opportunities in a competitive operating environment, the WA Government should provide service providers with consumer demand data, which includes detailed analysis of market trends and projections of future demand. Information Available to Participants In order to realise the substantial economic and social benefits associated with the NDIS reforms, participants must not only have the opportunity to access their existing range of disability and community supports, but they must also be aware of new opportunities and their enhanced capacity to direct funding towards them. There is a role for government to ensure that information gaps for people that have significant and enduring disability are minimised. Previous experiences with individualised, self- directed funding arrangements in Australia suggest that this will be important. In its Report to Government, Planning for a sustainable disability sector, PricewaterhouseCoopers stated that Some people in Victoria have a registered Individualised Support Package without knowing they have one. Examples given included people with flexible respite funding not knowing they had control to choose a service and consequently there was no difference to giving service providers block funding. 49 In the same Report, in reference to WA s LAC program, PricewaterhouseCoopers also found that as with Victoria, the person may not know they have individual funding held by a service provider and therefore do not use it more flexibly then [sic] that used through block funding. 50 To reduce the possibility of these types of information gaps under the NDIS reforms in WA, the WA Government should carefully consider how they can inform Western Australians with significant and enduring disability about ways that the NDIS will affect them as well as the rights of people with disability in WA. Along with mainstream mechanisms, which include providing information to advocacy groups, forums, expos and workshops, the WA Government should also consider innovative and disability friendly approaches such as an interactive online information system or a smartphone and tablet application. These options were considered by the Productivity Commission in its original report and by the JFA Purple Orange agency in their NDIS emarket Paper, which consulted with people with disability, their families, carers and service providers to identify the characteristics that an online NDIS market place should have. 51 From the NDIS emarket Paper, it was established that an online market place should contain relevant information for participants, such as the rights of people with disability, the price and range of products and services available, how participants can access 31

supports and the quality of supports. In addition, it should enable people with disability to interact and share the personal experiences they have had with service providers. This type of information and capacity building is especially critical in a more competitive environment with deregulated prices where some service providers may compete on price at the expense of quality. Information Available to Participants Recommendations I1: The WA Government should act to close any information gaps for Western Australians with disability about the NDIS reforms and how they will be affected. To do this, the WA Government should not only consider mainstream mechanisms for delivering information (such as through advocacy groups, forums, expos and workshop sessions) but also innovative approaches that are more friendly for people with disability such as a comprehensive and easily accessible online information system. This online information system should contain information on: the rights of people with disability in WA; the price and range of products and services available; how people with disability can access supports in WA; and the quality of supports in WA. The online information system should also be used as an online community where people with disability in WA can interact with each other and share the personal experiences they have had with service providers. Undeveloped Markets Like many critical health services, there is a risk that some disability services delivered in undeveloped markets, where overall demand is low and costs are high, may not be commercially viable and could be withdrawn from the market altogether. In particular, there is concern among existing not- for- profit service providers that for- profits will enter the market and cherry pick the most profitable services that will, in turn, reduce the capacity of existing service providers to cross subsidise high- cost, low demand services leading to a loss of services altogether. Where undeveloped markets that cannot support highly competitive arrangements exist in WA for example, some rural and remote areas CCI supports the option outlined by the Productivity Commission in its Inquiry Report on Disability Care and Support that block funding arrangements are maintained to mitigate the risk of services being withdrawn from the market. 52 However, where block funding arrangements are maintained, to safeguard against the risk of participants or providers achieving poor outcomes, the WA Government should ensure these services are monitored and reviewed regularly to assess the efficiency, contestability and quality standards of supports being provided. CCI also considers that the WA and Commonwealth Governments should aim to progress these undeveloped markets so that in time, they become more competitive and can support individualised funding arrangements. To do this, the WA and Commonwealth Governments should implement measures that make it easier for high quality disability care and support to be provided in these markets by a range of service providers. Examples of measures that could be undertaken include negotiable set up fees for service providers, the development of key infrastructure projects in these markets and appropriate employee incentives such as cost of living support or taxation incentives. 32

Undeveloped Markets Recommendations U1: Block funding arrangements should be maintained in undeveloped markets that are not profitable enough for services to be provided in a highly competitive environment and as a result, carry a high risk of market failure. In particular, this will ensure that in some rural and remote areas, where the costs of providing services are particularly high, participants will continue to receive supports that would otherwise be withdrawn from the market. U2: Where block funding arrangements are maintained, the WA Government should monitor and conduct regular reviews that assess the efficiency, contestability and quality standards of these undeveloped markets. U3: The WA and Commonwealth Governments should aim to progress undeveloped markets by undertaking measures that make it easier for disability service providers to deliver high quality, individualised supports in these markets. For example: set up fees could be negotiated with service providers; key infrastructure projects in undeveloped markets could be developed; and appropriate employee incentives could be considered such as cost of living support or taxation incentives. Disability Sector Workforce The introduction of the NDIS reforms will present substantial challenges for the disability services workforce that will not only need to substantially expand and be trained in a timely manner, but also diversify. In consultation with CCI members, CCI understands that there are serious concerns across the disability services sector about the capacity of the existing workforce to expand and provide the quality of care that is required under the NDIS reforms. CCI considers that there is already evidence of shortages in the disability workforce. In the NDS May 2014 Business Confidence Survey, approximately two thirds of respondent disability service providers indicated that they were expecting difficulty in recruiting paid and full- time staff in the next six months. 53 Analysis by NDS suggests the Australian disability sector workforce will need to almost double between 2013 and 2018 to reach approximately 200,000 workers. 54 This raises further concerns about the capacity of the existing Vocational Education and Training sector to produce the number of appropriately skilled workers required under the NDIS. To the extent that actual growth in the disability workforce falls short of demand for appropriately trained disability workers, shortages could emerge across the sector and wages will rise. While increasing wages should attract more workers to the sector, it will also increase the cost of the NDIS to Government and this could threaten the overall sustainability of the scheme. CCI supports the workforce strategies recommended by the Productivity Commission to help alleviate and meet workforce demand in the disability sector in the future. These strategies include, but are not limited to: marketing the positive contribution that disability support workers make and the increased opportunities for employment in the sector; providing subsidies for the training of disability support workers; 33

promoting the use of mainstream disability services as opposed to specialist disability services where appropriate and possible; encouraging school leavers to consider employment in the disability services sector; and sourcing appropriately trained disability support workers from overseas under the Temporary Work (Skilled) visa (subclass 457) program if workforce shortages cannot be met by the domestic population. 55 The shift toward a more individualised approach to disability care and support poses some significant challenges for the regulation of employment and attracting suitable workers to the sector. The individualised nature of the NDIS means that service providers need to be flexible in the way they deliver their services in order to meet the requirements of the client. However, this flexibility is hampered through the industrial relations regulations that apply to service providers, particularly with respect to the full- time and part- time employees. For example, the Social, Community, Home Care and Disability Services Industry Award 2010, provides that, in the case of part time employees, before commencing employment, the employer and the employee will agree in writing on a regular pattern of work including the number of hours to be worked each week, the days of the week the employee will work and the starting and finishing times each day. Any agreed variation to the regular pattern of work will be recorded in writing 56. Clauses of this nature require the employer to lock in employee start and finish times at the time of engagement, with limited scope to quickly change these arrangements, thus hampering the ability for service providers to deliver the flexible services required by participants using permanent employees. Consequently, service providers are compelled to utilise casual employees to deliver the required services, which reduces their ability to attract a suitable and stable workforce. It is important service providers have the ability to establish terms and conditions of employment that facilitate the delivery of appropriate, individualised services to participants. Currently, this is unachievable under the existing industrial relations framework for the sector. As part of the Productivity Commission s review into the workplace relations framework, CCI has made a series of recommendations that would allow service providers to establish work practices that facilitate the aims of these individualised programs. 57 In order to promote successful outcomes of these programs, the Commonwealth Government should undertake broader industrial relations reform. Disability Sector Workforce Recommendations W1: To plan and respond to future potential disability sector workforce shortages, the WA Government should undertake the workforce strategies suggested by the Productivity Commission. These strategies include, but are not limited to: marketing the positive contribution that disability support workers make and the increased opportunities for employment in the sector; providing subsidies for the training of disability support workers; promoting the use of mainstream disability services as opposed to specialist disability services where appropriate and possible; encouraging school leavers to consider employment in the disability services sector; and 34

sourcing appropriately trained disability support workers from overseas under the Temporary Work (Skilled) visa (subclass 457) program if workforce shortages cannot be met by the domestic population. W2: The industrial relations framework should be reformed to provide employers and employees in the disability services sector with the opportunity to establish terms and conditions of employment that facilitate the delivery of individualised services to participants. 35

End Notes 1 Productivity Commission. 2011. Disability care and support. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report. 2 Productivity Commission. 2011. Disability care and support, page 146. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 3 Productivity Commission. 2011. Disability care and support, page 37. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 4 Productivity Commission. 2011. Disability care and support, page 141. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 5 Productivity Commission. 2011. Disability care and support, page 646. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 6 Productivity Commission. 2011. Disability care and support, page 637. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 7 National Disability Insurance Agency. 2014. 2013-14 Annual Report. Accessed online at http://www.ndis.gov.au/sites/default/files/documents/annual_report_2013_14.pdf 8 See https://www.ato.gov.au/general/new- legislation/in- detail/direct- taxes/income- tax- for- individuals/medicare- Levy- increase- to- fund- DisabilityCare/ 9 Productivity Commission. 2011. Disability care and support, page 137. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 10 Productivity Commission. 2015. Report on Government Services Statistical Table, Services for People with Disability. Accessed online at http://www.pc.gov.au/research/recurring/report- on- government- services#data 11 Productivity Commission. 2015. Report on Government Services Statistical Table, Services for People with Disability. Accessed online at http://www.pc.gov.au/research/recurring/report- on- government- services#data 12 Productivity Commission. 2015. Report on Government Services Statistical Table, Services for People with Disability. Accessed online at http://www.pc.gov.au/research/recurring/report- on- government- services#data 13 Fisher, K., Gleeson, R., Edwards, R., Purcal, C., Tomasz, S., Dinning, B., Laragy, C., D Aegher, L. and Thompson, D. 2010. Effectiveness of Individual Funding Approaches for Disability Support. SPRU Occasional Paper no. 29, FaHCSIA. Accessed online at https://www.sprc.unsw.edu.au/media/sprcfile/32_occpaper_29.pdf 14 Ontario Round Table on Individualised Funding. 2000. Linking individualised supports and direct funding: making money work for people, page 26. Accessed online at https://individualizedfunding.files.wordpress.com/2014/07/the- round- table- report- with- current- contact- info.pdf 15 Productivity Commission. 2011. Appendix D Existing self- directed support arrangements in Australia, page D.4. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report/28- disability- support- appendixd.pdf 16 Disability Services Commission. 2014. 2013-14 Annual Report. Accessed online at http://www.disability.wa.gov.au/global/publications/about%20us/corporate%20publications/annual%20reports/disability- Services- Commission- 2013-2014- Annual- Report- full.pdf 17 Government of Western Australia. 2011. Delivering Community Services in Partnership Policy, page 2. Accessed online at https://www.finance.wa.gov.au/cms/uploadedfiles/government_procurement/policies/dcspp.pdf?n=1765 18 Government of Western Australia. 2011. Delivering Community Services in Partnership Policy, page 5. Accessed online at https://www.finance.wa.gov.au/cms/uploadedfiles/government_procurement/policies/dcspp.pdf?n=1765 19 See http://www.disability.wa.gov.au/wa- ndis- my- way/wa- ndis- my- way/my- way- - the- history/ 20 Productivity Commission. 2011. Disability care and support, page 2. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 21 Western Australian Government. 2011. Western Australian Government Submission: Productivity Commission Inquiry on the draft report into Disability Care and Support. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/submissions/subdr0683.pdf 22 See http://www.disability.wa.gov.au/wa- ndis- my- way/wa- ndis- my- way/the- trial/ 23 See http://www.disability.wa.gov.au/wa- ndis- my- way/wa- ndis- my- way/the- trial/governance/wa- joint- steering- committee/ 24 Disability Services Commission. 2015. Quarterly Report to the Commonwealth Government June 2015. Accessed online at http://www.disability.wa.gov.au/global/publications/wa- NDIS- My- Way/Quarterly%20reports/Q4-2014- 15- DSC- Quarterly- Report- to- the- Commonwealth- Government.pdf; and National Disability Insurance Agency. 2015. Quarterly Report to COAG Disability Reform Council June 2015. Accessed online at http://www.ndis.gov.au/sites/default/files/q4- Report- to- COAG- Disability- Reform%20Council.pdf 25 National Disability Insurance Agency. 2013. Operational Guideline Gateway Local Area Coordinators. Accessed online at http://www.ndis.gov.au/sites/default/files/documents/og_gateway_lac.pdf 26 National Disability Insurance Agency. 2014. 2013-14 Annual Report, page 51. Accessed online at http://www.ndis.gov.au/sites/default/files/documents/annual_report_2013_14.pdf 27 Disability Services Commission. 2014. Fact Sheet: WA NDIS My Way, The Role of My Way Coordinators (MWCs). 28 CCIWA. 2007. Federalism in Australia: A Discussion Paper. 29 Autism Association of Western Australia. 2011. Autism Association of Western Australia NDIS response, page 1. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/submissions/subdr0795.pdf 30 The Centre for Cerebral Palsy, Western Australia. 2012. Disability Care and Support, Draft Inquiry Report; Response from The Centre for Cerebral Palsy, Western Australia, page 3. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/submissions/subdr0680.pdf 31 CCIWA. 2007. Federalism in Australia: A Discussion Paper, page 18 36

32 National Disability Insurance Agency. 2014. 2013-14 Annual Report, page 51. Accessed online at http://www.ndis.gov.au/sites/default/files/documents/annual_report_2013_14.pdf 33 Productivity Commission. 2011. Disability care and support, page 238. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 34 National Disability Insurance Agency. 2014. 2013-14 Annual Report, page xi. Accessed online at http://www.ndis.gov.au/sites/default/files/documents/annual_report_2013_14.pdf 35 Australian Government Actuary. 2013. NDIS Costings Review by the Australian Government Actuary, page 26. Accessed online at http://www.treasury.gov.au/~/media/treasury/access%20to%20information/disclosure%20log/2012/national%20disability%20insuranc e%20scheme%20costings%20review%20by%20the%20australian%20government%20actuary/downloads/pdf/doc1.ashx 36 Productivity Commission. 2015. Report on Government Services Statistical Table, Services for People with Disability. Accessed online at http://www.pc.gov.au/research/recurring/report- on- government- services#data 37 Disability Services Commission. 2015. Quarterly Report to the Commonwealth Government June 2015, page 30. Accessed online at http://www.disability.wa.gov.au/global/publications/wa- NDIS- My- Way/Quarterly%20reports/Q4-2014- 15- DSC- Quarterly- Report- to- the- Commonwealth- Government.pdf; and National Disability Insurance Agency. 2015. Quarterly Report to COAG Disability Reform Council June 2015, page 46. Accessed online at http://www.ndis.gov.au/sites/default/files/q4- Report- to- COAG- Disability- Reform%20Council.pdf 38 Australian Government Actuary. 2013. NDIS Costings Review by the Australian Government Actuary. Accessed online at http://www.treasury.gov.au/~/media/treasury/access%20to%20information/disclosure%20log/2012/national%20disability%20insuranc e%20scheme%20costings%20review%20by%20the%20australian%20government%20actuary/downloads/pdf/doc1.ashx 39 See http://www.ndis.gov.au/about- usgovernance/federal- funding 40 Productivity Commission. 2011. Disability care and support, page 605. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 41 Australian Government Actuary. 2013. NDIS Costings Review by the Australian Government Actuary; Motor Neurons Disease Australia. 2014. Aged Care and people diagnosed with MND Position Statement; National Disability Insurance Agency. 2015. National Disability Insurance Scheme, A Framework for Information, Linkages and Capacity Building; Multiple Sclerosis Australia. 2012. Position Statement: National Disability Insurance Scheme; and Productivity Commission. 2011. Disability care and support, page 961. 42 PricewaterhouseCoopers. 2012. Planning for a sustainable disability sector, page 5. Accessed online at https://www.dss.gov.au/sites/default/files/documents/05_2014/fahcsia_sector_capacity_report_november_2012.pdf_- _adobe_acrobat_pro.pdf 43 National Disability Insurance Agency and National Disability Services. 2014. Final Report of Pricing Joint Working Group, page 19-20. Accessed online at http://www.ndis.gov.au/sites/default/files/documents/final_report_of_pricing_joint_working_group.pdf 44 National Disability Services. 2014. State of the Disability Sector Report 2014, page 9. Accessed online at www.nds.org.au/asset/view_document/979324120 45 See https://www.dss.gov.au/our- responsibilities/disability- and- carers/publications- articles/early- intervention- transition- to- the- national- disability- insurance- scheme- wa- ndis- my- way 46 PricewaterhouseCoopers. 2012. Planning for a sustainable disability sector. Accessed online at https://www.dss.gov.au/sites/default/files/documents/05_2014/fahcsia_sector_capacity_report_november_2012.pdf_- _adobe_acrobat_pro.pdf 47 PricewaterhouseCoopers. 2012. Planning for a sustainable disability sector, page 38. Accessed online at https://www.dss.gov.au/sites/default/files/documents/05_2014/fahcsia_sector_capacity_report_november_2012.pdf_- _adobe_acrobat_pro.pdf 48 National Disability Services. 2014. Disability support markets in 2025, page 1. Accessed online at www.nds.org.au/asset/view_document/979324474 49 PricewaterhouseCoopers. 2012. Planning for a sustainable disability sector, page 18. Accessed online at https://www.dss.gov.au/sites/default/files/documents/05_2014/fahcsia_sector_capacity_report_november_2012.pdf_- _adobe_acrobat_pro.pdf 50 PricewaterhouseCoopers. 2012. Planning for a sustainable disability sector, page 20. Accessed online at https://www.dss.gov.au/sites/default/files/documents/05_2014/fahcsia_sector_capacity_report_november_2012.pdf_- _adobe_acrobat_pro.pdf 51 JFA Purple Orange. 2013. NDIS emarketplace. Accessed online at http://www.ndis.gov.au/sites/default/files/documents/jfa%20purple%20orange%20ndis%20pdf%20e- Market%20report%20updated%2017%20May%202013.docx; and Productivity Commission. 2011. Disability care and support, page 486. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 52 Productivity Commission. 2011. Disability care and support, page 523. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 53 National Disability Services. 2014. State of the Disability Sector Report 2014, page 42. Accessed online at www.nds.org.au/asset/view_document/979324120 54 National Disability Services. 2014. State of the Disability Sector Report 2014, page 43. Accessed online at www.nds.org.au/asset/view_document/979324120 55 Productivity Commission. 2011. Disability care and support, page 87. Accessed online at http://www.pc.gov.au/inquiries/completed/disability- support/report 56 Clause 10.3(c) of the Social, Community, Home Care and Disability Services Industry Award 2010 (MA 000100). This is an award of the Fair Work Commission that applies to employers in the: crisis assistance and supported housing sector; social and community services sector; home care sector; and family day care scheme sector. Other relevant awards include similar provisions with respect to part time employees. 57 57 CCIWA. 2015. Productivity Commission Review into the Workplace Relations Framework, Submission by the Chamber of Commerce and Industry of Western Australia. Accessed online at http://cciwa.com/docs/default- source/advocacy/cciwa- submission- - - productivity- commission- review- into- the- workplace- relations- framework.pdf?sfvrsn=2.. 37