Levy or GST rise could fund disability insurance, says lawyers’ group

A lawyer’s body has warned of a funding risk to the national disability insurance scheme.Australia’s Goods and Services Tax could be broadened or a Medicare-style levy considered to pay for the National Disability Insurance Scheme, a top lawyers’ body believes.

The Australian Lawyers Alliance says Labor’s proposed $8 billion-plus NDIS is a necessary social reform but risks becoming financially unsustainable over the longer term unless it is both well-designed and given dedicated funding.

It also wants to see rigorous external pricing oversight, perhaps using the corporate and consumer watchdog, the ACCC, to guard against private insurers offloading risk to the public sector.

The group, which is not claiming specific economic expertise, argues the funding base of the proposed scheme must be realistically confronted because it is impossible to guarantee individual legal rights if those same rights later become hostage to limited funding.

ALA President Tony Kerin will give evidence on Tuesday to a Senate inquiry into the NDIS in Adelaide where he will argue the design and funding arrangements need to be fully worked out to ensure the integrity of the NDIS for generations to come.

He told Fairfax Media the New Zealand experience showed the scheme would be vulnerable to a constant tinkering and narrowing of entry criteria unless its future operating costs could be accurately forecast and funded.

The ALA also believes the way the scheme is being legislated is problematic.

In a letter to Prime Minister Julia Gillard before the Senate inquiry, Mr Kerin said the ALA opposed establishing it through ”shell” legislation, which left major design features to be set out in rules.

”The Bill grants power for ‘NDIS  Rules’ to be created, at any time, without any extensive parliamentary scrutiny of such rules,” Mr Kerin writes in the letter obtained by Fairfax Media.

”Insufficient clarity about what support people will receive, and what ‘reasonable and necessary support’ truly means, is another concern.

”We believe that this is liable to change in the future, under the NDIS Rules, unless people are protected by clearly defined legislation.

”It appears the individuals’ current legal rights may be suspended, or revoked, under the bill’s present wording – with potential catastrophic impact for people.”

The government has so far ruled out using a special levy to meet the scheme’s costs, but the ALA says merely funding its operation from consolidated revenue means it will always be buffeted by competing priorities and subject to contraction.

The government has not yet quantified how much the system will cost into the future but has allocated $1 billion for five introductory sites to begin operating from July 1.

It is consulting with interested groups as it works through initial design issues and will use the Senate inquiry to help inform its final design.

GST revenue, which is raised by the Commonwealth but provided directly to the states under the terms of its inception, is expected to collect about $54 billion next financial year.

However, discussion of either increasing its 10 per cent rate or broadening its incomplete scope to include fresh food for example, has been a political no-go zone since its inception in 2000.

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