Article Commentary: There is no evidence NDIS therapies help kids thrive

Summary: "It is no coincidence that Australia’s sluggish productivity, real wages and living standards coincided with massive amounts of taxpayer money being pumped into the now $52 billion National Disability Insurance Scheme and other social welfare programs over the past decade."

1. Australian Financial Review: There is no evidence NDIS therapies help kids thrive (John Kehoe)

Brief: Australia is pumping infinite money into supply-constrained markets such as disability and childcare, while the government also mandates and helps fund hefty wage increases in these sectors.

It is no coincidence that Australia’s sluggish productivity, real wages and living standards coincided with massive amounts of taxpayer money being pumped into the now $52 billion National Disability Insurance Scheme and other social welfare programs over the past decade.

Canberra’s fact-free social policy by fad, anecdotes, buzz words and feelings is the world we live in today.

Full Text:

Health Minister Mark Butler, who is agitating for reform, has his hands full – tasked with reining in the cost of the $52 billion National Disability Insurance Scheme. Alex Ellinghausen

The NDIS is injecting more than $5 billion a year – above 10 per cent of the program – into therapies without any evidence they are improving health and education outcomes, according to a former National Disability Insurance Agency executive who spoke on the condition of anonymity because they don’t want to upset their current private sector employer.

These treatments include behavioural therapy, occupational therapy, speech pathology, counselling, psychology, psychiatry, social work, art and music therapy and other interventions for autistic children.

The cost of these taxpayer-funded general and behavioural therapies is growing at more than 20 per cent a year.

The service providers often have unknown qualifications and there is an incentive for education tutors and other adjacent providers to classify their services as therapies to qualify for taxpayer-funded NDIS payments.

It is an article of faith among politicians, bureaucrats, disability advocates and allied health professionals that such treatments enrich the lives of children.

But what if they are not? It is plausible the billions of dollars of waste is doing more harm than good.

“The plethora of evidence-free therapies is tying carers in administrative red tape.”

There were 751,446 participants in the NDIS as at September 30, almost 23 per cent of whom were aged younger than nine.

Extraordinarily, one out of six boys aged six are on the scheme – more than double the rate of girls, largely due to diagnosis for autism and developmental delays.

Yet, Australia’s education results in literacy and numeracy have gone backwards in absolute terms and against the rest of the world, despite the NDIS spending much more on children with learning disabilities and developmental delays.

The NDIS outlays are on top of the extraordinary $319 billion Gonski school funding reforms over the decade to 2029 that were supposed lift academic outcomes. But maths and English results have got worse.

There is also no evidence that therapies funded by the NDIS are improving employment prospects for participants and carers.

One of the original justifications for the NDIS was that it would free up family members with caring responsibilities and allow them to do more paid work and boost labour supply for the economy.

But research by the e61 think tank shows the very opposite happens in the short term. The caring responsibilities of partners and parents goes up when a family member enters the NDIS.

Where an adult partner eventually enters the NDIS, the likelihood of the other partner being a carer increases from 26.5 per cent to 32.5 per cent.

For households where a child enters the NDIS, the likelihood of mothers caring for a young child with a disability increases from 42.5 per cent to 56.3 per cent at the time of entry.

The increase in caring responsibilities upon NDIS entry may be partly due to the participant’s physical or mental health deteriorating and requiring more hands-on care.

“In addition, the scheme, by design, places significant co-ordination demands on carers: finding providers, managing budgets, scheduling services, and navigating plan reviews and administrative requirements,” e61 researcher Pelin Akyol notes.

The plethora of evidence-free therapies is tying carers in administrative red tape and taking them away from working in productive employment.

Now, Health Minister Mark Butler is developing a so-called Thriving Kids program to divert children from the expensive NDIS to other foundational supports, hoping that it will save money.

The Commonwealth has committed $2 billion and wants the states and territories to match it, for an initial total outlay of $4 billion.

But Butler is simply trying to shift children from one arguably ineffective program to another. It’s old wine in new bottles.

There is also no guarantee Thriving Kids will cost less taxpayer money than the full-service NDIS. Every child will have a key support worker to co-ordinate support services and therapies.

There is no evidence such supports will improve the lives of kids. It seems that in social policy these days, policy-based evidence making is in vogue, and evidence-based policy-making is dead.

A much-vaunted “care economy” has exploded without empirical evidence that it is delivering better outcomes for people with less serious disabilities, particularly children.

And it has produced an industry of rent seekers who care mostly about the magic money tap continuing to gush, and less about the outcomes the care economy is supposedly delivering.

Stakeholders who have built industries from the largesse will squeal loudly if it is taken away. Governments and bureaucrats can’t admit that what they have been pumping hundreds of billions of dollars into over the past decade is failing.

Does anyone in Canberra care about taxpayer value-for-money and policy outcomes these days?

“The explosion in low-value government services is creating other problems in the economy.”

The nation is overdue for an honest, critical, self-reflection. Reforms are needed to help align incentives with evidence-based practices and to improve the efficient allocation of resources.

NDIS therapies require an urgent deep dive review to investigate if they are delivering substantial, value-for-money outcomes.

Therapies and supports should only be funded where they demonstrate clear, evidence-based benefits through independent review and health technology assessment. They should face regular independent assessments to see if they deliver meaningful improvements for participants, such as education, employment and quality of life.

Activities without clear beneficial outcome data should have their funding cut off or curtailed.

At a minimum, co-payments and means-tests for therapies for people with less serious disabilities should be introduced for these demand-driven programs, as the International Monetary Fund has recommended – presumably with Treasury’s tacit backing.

Most children do not need 50 sessions a year of occupational therapy, compared with a limit of 10 individual mental health sessions a year under Medicare.

More broadly, the explosion in low-value government services is creating other problems in the economy.

Large amounts of taxpayer money and labour are being diverted into unproductive activities.

Australia’s labour productivity had stagnated at 2016 levels, before Wednesday’s national accounts showed a recent pick up.

This country’s productivity performance has been the second-worst since the pandemic among rich club nations in the Organisation for Economic Co-operation and Development. New Zealand, which did not introduce an NDIS, has not suffered the same productivity dive.

Productivity accounted for more than 80 per cent of national income growth over the past 30 years, according to the Productivity Commission. Hence, it is not surprising that real wages have barely grown over the past decade and living standards are flatlining.

Australia is pumping infinite money into supply-constrained markets such as disability and childcare, while the government also mandates and helps fund hefty wage increases in these sectors.

As a result of the large subsidy increases, prices for NDIS services and childcare have exploded, contributing to sticky inflation and cost-of-living pressures.

All Australians are paying the price for the uncontrolled spending on the fact-free care economy.

2. How Australia Really Works Commentary

- By spending endless money on politically-popular and feel-good but ineffective (or very sub-optimal) programs, Australian governments are escalating a permanent cost-of-living crisis for the least-advantaged third of the population, and forcing another third to be wage slaves for decades.

- Australian governments deliberately create some level of welfare/state dependency - both for recipients and, in the case of programs like the NDIS, for a giant pool of unskilled workers, able to reside in any town, yet tap into flexible service work funded by government. However, the inability of politicians and bureaucrats to distinguish between essential needs (shelter, food, energy, useful healthcare, access to work/study/services) and ineffective service work, is going to create a permanent cost-of-living crisis.

- The NDIS is primarily a source of desirable, better-paid employment for Australians born here (they are advantaged in being selected, particularly on the client-controlled platforms (e.g.Hireup, Mable). In turn, Australia becomes increasingly dependent on an unofficial guest worker program where temporary migrants do the undesirable, low-paid but essential jobs: aged care, transport, cleaning, undesirable hospitality work, factory work, security, low-paid night shifts, etc. Because migrants will escape low-paid, low-skill work for better opportunities as soon as they can, the government runs a permanent, unofficial guest worker program while also inevitably creating permanent residencies beyond the efficient supply of well-located housing.

- In the short term and for individuals/families, such programs can seem helpful, but they are inexorably raising the minimum costs of essential needs in Australia, and, thus, the minimum cost of a basic life where individuals are freer to choose meaningful pursuits and diverse skills/hobbies while earning sufficient income (e.g. part-time).