Another day, another major Productivity Commission report. And like last week’s aged care report, the government is hastening slowly on implementation: it has referred the PC’s groundbreaking recommendations for a National Disability Insurance Scheme to a COAG committee to design the framework and oversee its implementation, rather than take any immediate action.

This morning, the final report and the government’s response were both released. The guts of the PC report — similar to its draft report earlier in the year — are:

  • A National Disability Insurance Scheme providing insurance cover for the care (not income) of all Australians in the event of significant disability;
  • Guaranteed funding for the NDIS, entrenched in legislation, “funded through a combination of cuts in existing lower-priority expenditure, fiscal drag, and if necessary, tax increases”;
  • Funding for disability services needs to approximately double from ~$7 billion to $13.5 billion per annum;
  • A single new National Disability Insurance Agency, reporting to all governments, acting as assessor and funder, but not provider, of disability care and support services;
  • Funding based on needs, not how disability is acquired or where people live; and
  • A separate scheme for people requiring lifetime care and support for catastrophic injuries: the no-fault National Injury Insurance Scheme, providing full care, comprised of a federation of existing state and territory schemes.

But there’ll be no dramatic shift toward the new framework; the government response was careful to point out the PC had noted “it would take at least seven years to transform disability services”. That’s well over two elections away.

The government’s response consists of establishing a new COAG committee, advised by a high-level expert committee, with $10 million to start planning. Bill Shorten will head another committee to look at the catastrophic injury recommendations.

The government’s relative timidity partly reflects the cost of the scheme — the need to find an additional $6.5 billion a year, in the long-run, if the PC recommendations are accepted. “These reforms will be delivered in a way that is consistent with the government’s fiscal strategy,” according to Prime Minister Julia Gillard.

It also reflects the need to secure the agreement of the states and territories to at best replace existing state and territory disability schemes with the NDIS, or as a backup, and very much inferior option (in the PC’s view) of a federated scheme.

As with aged care, there appears to at least be the basis for bipartisanship on the issue (strange that, in Tony Abbott’s absence, the Coalition appears eminently capable of being more than mindlessly oppositionist). Mitch Fifield has acknowledged the current system for people with disabilities isn’t working effectively. And as with aged care, Labor is taking a very risk-averse approach indeed to implementation.