NDIS: Plans to fix in turmoil after State treasurers refused to consider reforms without extending GST top-up

Plans to urgently fix the National Disability Insurance Scheme are in turmoil after State treasurers refused to even consider major reforms unless the Federal Government agreed to permanently extend GST top-up payments. The treasurers issued the bombshell edict after a meeting with federal counterpart Jim Chalmers in Brisbane on Friday. “State and Territory Treasurers believe the GST no-worse-off guarantee needs to be resolved before any States and Territories can consider any proposals for change (to the NDIS),” the treasurers said in a joint statement. The treasurers have also told the Commonwealth that it would be held “fully responsible” if the States had to consider new taxes or levies to fund essential services if the GST deal was pulled. It is a blow to Prime Minister Anthony Albanese, who was hoping to use next week’s national cabinet meeting to secure a deal with the States to reset the out-of-control NDIS. The States have been ramping up the pressure on the Federal Government to commit to making the GST top-up payments a permanent feature of the distribution. The payments — agreed as part of the 2018 deal that guaranteed WA’s GST floor — are due to expire in 2026-27. Dr Chalmers has guaranteed WA’s GST floor will be protected but doesn’t want to make a call on the “no worse off” payments until a Productivity Commission review due in 2026. That has left the other States starting at the prospect of losing a combined $5bn each year — if the deal isn’t extended. The budget fears are mounting just as the Federal Government is turning to the States to help ease pressure on the $40bn — and rapidly growing — disability insurance scheme. A landmark review of the NDIS, due to be discussed at next week’s national cabinet, is expected to recommend the Commonwealth, States and Territories agree to a new model to fund not just the NDIS but also “foundational supports” for the millions of disabled people who aren’t on the scheme. The Commonwealth wants the States to do more to support children with autism and developmental delays — the major cohort driving the scheme’s rapid growth. But any hopes of quickly securing a deal have been dashed as the States dig in over the GST. “Without permanently honouring the no-worse-off guarantee, the Commonwealth will leave most states and territories with a significant decrease in ongoing revenue,” the treasurers said. NDIS Minister Bill Shorten earlier this week said it would be a “betrayal” to people with a disability if Governments didn’t act quickly to mend the scheme. Premier Roger Cook said he had received a brief update from Treasurer Rita Saffioti following the Brisbane meeting and it was clear there was “a lot of anxiety” around future funding of the NDIS and related services. “Clearly the Treasurer’s would like to see other issues resolved before we can start in earnest to confront the issues around the reform of the NDIS system,” he said. Dr Chalmers on Thursday sounded an ominous warning about the prospect of the “top up payments” being extended, saying the States were already doing “really well” out of the Commonwealth. He also pointed to the massive blowout in the cost of the deal, which is forecast to reach almost $34 billion. He repeated that warning in a statement after Friday’s meeting. “The cost to the Commonwealth of the GST no-worse-off guarantee has substantially increased since the original deal was put in place, and any extension would have significant fiscal implications for the Commonwealth,” he said. “Any developments on GST need to recognise the pressure on all our budgets, not just on state budgets” In the statement, the State treasurers also blasted the Commonwealth’s handling of the review of its $120bn infrastructure pipeline as “disappointing”. The review laid the platform for the Federal Government to axe funding from more than 50 projects nationwide — with WA stripped of just under $320 million allocated to five projects. The treasurers also unanimously rejected the Commonwealth’s decision to shift to 50:50 funding for regional road projects. At the moment the Commonwealth typically chips in 80 per cent for those projects.