Issues Presented by Legislative and Executive Implementation of the National Disability Insurance Scheme

ISSUES PRESENTED BY LEGISLATIVE AND EXECUTIVE IMPLEMENTATION OF THE NATIONAL DISABILITY INSURANCE SCHEME

Michael Sassella*

The National Disability Insurance Scheme (NDIS) is an unusual Commonwealth scheme. It is administered by the National Disability Insurance Agency (NDIA)
that, unlike almost all other Commonwealth agencies, is a joint venture involving the Commonwealth and all of the states and territories. Forty percent
of funding for the scheme is provided by the Commonwealth and 60% by the states and territories. This arrangement creates an unusual governance structure;
there is a structure inside the NDIA and, in addition, an intergovernmental governance arrangement involving the joint venturers. The joint venture
structure is reflected in the legislation, legislative instruments, financial arrangements and general administration of the scheme. The implementation
of the scheme is also influenced by the fundamental compact informing the creation of the NDIS.

Implementation

It is well known that the NDIS had its genesis in the work of the Productivity Commission. Between February 2010 and July 2011 it researched a strategy
to enhance the quality of life and increase the economic and social participation of people with disability and their carers. This project resulted
in the two-volume report, Disability Care and Support: Productivity Commission Inquiry Report No 54, 31 July 2011 (the PC Report).[1]

There followed discussions between the Commonwealth, states and territories at the Council of Australian Governments (COAG).There was a general acceptance
that the then disability support system was underfunded, unfair, fragmented and inefficient, and gave people with disability little choice and no certainty
of access to appropriate supports. The stresses on the system were growing, with rising costs for all governments.[2]

The COAG discussions led to an Intergovernmental Agreement (IGA)[3] signed by all heads of Australian governments on 7 December 2012.By that date considerable work had already been done to implement the NDIS. The National
Disability Insurance Scheme Launch Transition Agency (NDISLTA) had been operating as part of the Commonwealth Department of Families, Housing Community
Services and Indigenous Affairs since early in 2012.The NDIA’s legal title is still the NDISLTA.[4]

At officer level, a Design Working Group met frequently to discuss policy, process and miscellaneous arrangements, sometimes in person but usually by telepresence.
At Ministerial level a Standing Council on Disability Reform, known generally as the Ministerial Council[5],
had been created and was functioning. The Bill for the National Disability Insurance Act 2013 (the NDIS Act) was introduced
into the House of Representatives on 12 December 2012.

The IGA is a high level agreement which has had to be supplemented for each host jurisdiction[6] by a bilateral agreement between that state or territory and the Commonwealth. Each bilateral agreement is unique but each covers matters such as transfer
of funds, phasing of particular groups in the state or territory into the NDIS, location of offices, what state or territory contracts with providers
will be continued and utilised by the NDIA, continuity of supports for those who do not qualify for access to the NDIS (such as those aged over 65)
and any other matters unique to the relationship.

All states and territories are now host jurisdictions with the exception of Queensland which has, however, agreed to join the NDIS when the full scheme
commences in July 2016.

At Commonwealth level the NDIA is a corporate Commonwealth entity[7] situated within the Social Services Portfolio. The Department of Social Services is responsible for formulating, negotiating and legislating NDIS policy.
The NDIA is responsible for the proper administration of the NDIS.

For the Commonwealth, the joint venture basis of the NDIS has presented particular challenges: how the Commonwealth implements a new scheme or agency and
how it then goes about the business of governance and administration.

The remainder of this paper emphasises the operation of this joint venture arrangement as it affects:

• external governance of the NDIS;
• internal governance of the NDIA;
• financial arrangements;
• decision-making; and
• interaction between Commonwealth and host jurisdiction laws.

The merits review arrangements for the NDIS are not affected by the structure and are standard Commonwealth arrangements.

External governance of the NDIS

While the NDIS is administered by the NDIA and is governed by a Board, the Standing Council on Disability Reform, a COAG Ministerial Council made up of
Treasurers and Ministers responsible for disability, from the Commonwealth and each state and territory, is the decision-maker on the NDIS policy issues.

The NDIA holds all funds contributed by the Commonwealth, states and territories in a single pool, manages scheme funds, administers access to the scheme
and approves the payment of individualised support packages.

The NDIA Board is responsible for the performance of these functions and the strategic direction of the NDIA.
The Board manages its costs and liabilities from year to year, including through the development of a reserve and investment of funds.

The NDIA Board is advised by the NDIS Independent Advisory Council (IAC), established by s 143 of the NDIS Act.

The Commonwealth Minister is responsible for administering the NDIS Act, and exercises statutory powers with the agreement of states and territories,
including a power to make the NDIS Rules and direct the NDIA.

The need to obtain consent from, or at least consult with, host jurisdictions, before taking many actions within the NDIA is a necessary precondition to
the Minister taking certain administrative, policy or legal actions. The intention, with regard to development of policy and, with reservations, legislation,
is for the states and territories to have an effective influence on developments.

Internal governance of the NDIA

In the internal operations of the NDIA the states and territories wield influence in the following ways:

• Before the Minister may give general directions about the performance of its functions under s 121 of the NDIS Act, or strategic guidance
  under s 125, to the NDIA, the Commonwealth and the host jurisdictions have to agree to the giving of the statement.

• After giving a direction to the NDIA the Minister must give a copy to the Ministerial Council (s 176(1)).

• In making appointments to the NDIA Board and the IAC the Minister must consult with all states and territories about the Chair and Principal Member
  appointments and, for all Board and IAC members, the Minister must seek and receive the support of all states and territories (ss 127(3)-(4), ss
  147(2)-(3)).

• If appointing an acting Board or IAC member, the Minister must consult the states and territories, although their support is not required (s 129(2A),
  s 149(2A)).

• If considering giving leave of absence to the Board Chair or IAC Principal Member, the Minister must consult with host jurisdictions but their agreement
  is not required (s 131(2), s 151(2)).

• Where the Minister is considering termination of a Board or IAC member for misbehaviour or incapacity, or, in the case only of the Board, want of confidence,
  the Minister must consult the host jurisdictions and seek and obtain their support (ss 134(3)-(4), ss 155(2)-(3)).

• If the Minister is considering terminating the Chair of the Board or the IAC Principal Member, consultation with the host jurisdiction, without necessarily
  obtaining agreement, is required (s 134(3), s 155(3)).

• The Minister must tell the Ministerial Council of any of the above actions to do with appointments of Chair or members of the Board and IAC, of the
  CEO, an acting Chair, Board member or IAC member, granting leave of absence, resignation or termination (s 176).

• The Minister must be satisfied that the Commonwealth and a majority of host jurisdictions agree to the terms and conditions of office of Board and
  IAC members (s 135(2), s 156(2)).

• The Minister must consult the host jurisdictions before appointing a CEO of the NDIA, although agreement to the proposal is not required (s 160(7)).

• The Board must give the Ministerial Council a copy of various documents including the corporate plan (and any subsequent variations), the quarterly
  report on NDIA operations, annual reports, any interim reports, notification of significant events and sensitive information to the Minister or
  Finance Minister, the appointment of a new CEO, resignation of a CEO or termination of a CEO (ss 173, 174, 177).

• Under s 201 the Minister can delegate to the CEO the Minister’s powers under s 209 (the power to make rules in the form of legislative instruments)
  but each host jurisdiction must agree to this delegation.

• Under s 209 the Minister can make rules which have legislative force to flesh out provisions in the NDIS Act. Around 20 sets of rules have
  been made and are on the Federal Register of Legislative Instruments. In s 209 there is a complex set of categories for the various subject areas
  of the rules. Depending on the category into which a rule falls, the NDIS Act will require that the Minister secures agreement from each
  host jurisdiction, or agreement from the one host jurisdiction affected by a proposed rule, or agreement from a majority of host jurisdictions,
  or merely consult with host jurisdictions.

• The regulation making power in s 210 of the NDIS Act also requires consultation with, or agreement by, host jurisdictions before the regulations
  are made. There are no NDIS regulations as yet.

The NDIA is, as a consequence, substantially constrained in its freedom to operate in the ordinary way that other Commonwealth agencies without the substantial
state and territory interest can do.

Financial arrangements

The joint funding of the NDIS by the Commonwealth and the states and territories has necessitated particular legislative provisions. Section 178 provides
for the Commonwealth to pay money appropriated for the NDIS to the Agency. Section 179 provides for the NDIA to receive money from a host jurisdiction
to be used to provide supports funded by the NDIS to participants in the host jurisdiction’s geographical area. This has obvious implications for NDIA’s
accountabilities for expenditure.

In this connection s 175 requires the NDIA to advise the Minister on request about expenditure of money received from a host jurisdiction and NDIA activities
relating to a particular jurisdiction. Similarly, the Minister of a host jurisdiction who is a member of the Ministerial Council must be given information
requested about how money from that jurisdiction has been spent, how money from the Commonwealth has been spent in that jurisdiction and NDIA activities
relating to that jurisdiction. To date the NDIA has not received any requests under s 175.

The NDIA can also charge fees if the Minister, by legislative instrument, prescribes the functions for which fees can be charged and how the fees are to
be quantified (ss 120(1)- (2)).The legislative instrument requires the agreement of all host jurisdictions (and the Commonwealth) before the Minister
can make the instrument (s 120(4)). No such instrument has been promulgated as yet.

Decision-making

The states and territories have a priority status in some limited NDIA decision-making. These situations are:

• Where a child, ie a person under 18 years of age, is a participant in the NDIS, it is necessary to identify the person or persons with parental responsibility
  for that child. Whereas the CEO (or a delegate) can routinely decide who should have parental responsibility, where a state or territory Minister
  or head of a Department of State has guardianship or parental responsibility for a child, the CEO must accept that arrangement unless the Minister
  or head of Department has agreed in writing that the CEO can make a different determination (ss 74(1A), 75(3A)).
• Where the CEO needs to appoint a nominee for a participant requiring assistance or representation in their dealings with the NDIA, if there is a person
  who, under a law of the Commonwealth, state or a territory has guardianship of the participant, or has been appointed by a court or other tribunal
  to make decisions for the participant, the CEO is to have regard to that arrangement in appointing the nominee (s 88(4)).

Interaction between Commonwealth and host jurisdiction laws

The NDIS Act contains strong provisions in ss 55-57 permitting the NDIA to seek information relevant to its functions under the Act. Section 58
starts with the presumption that, when these provisions are used to obtain information from a person, even if a state or territory law purports to
prevent that person from cooperating, the person must still provide the requested information. However, s 58 permits an exception where the NDIS rules
state that certain listed state or territory laws preventing disclosure of information apply to a particular request. In that situation the person
required by the NDIA to provide information can resist doing so.

The states and territories provided lists of provisions for inclusion in the National Disability Insurance (Protection and Disclosure of Information) Rules 2013 (the Information Rules); these are far reaching and could serve to greatly impede the NDIA in its legitimate work. In practice the experience has been
that the states and territories have not invoked these provisions to refuse to cooperate with the NDIA.

Section 67 of the NDIS Act provides for NDIS rules to regulate the CEO’s power to certify that disclosure of protected information can occur in
the public interest (in accordance with s 66(1)(a)).Protected information has much in common with personal information as understood under the Privacy Act 1988.Relevantly,
it is information about a person held in the records of the NDIA[8].The
Information Rules deal with disclosure in the public interest. Examination of the rules shows that, while the states and territories have been able
to provide a lengthy list of provisions designed to limit the provision of information to the NDIA, paragraph 4.6 in particular facilitates the provision
of NDIS protected information for the enforcement of possibly minor criminal law enforcement by states and territories. This reflects the relatively
powerful position of the states and territories in negotiations leading up to the launch of the NDIS in 2013.

The states and territories receive some additional recognition in ss 118 and 207 of the NDIS Act. In s 118, the section dealing with
the functions of the NDIA, s 118(2)(a) requires that, in performing its functions, the NDIA must use its best endeavours to act in accordance with
any relevant intergovernmental agreements, although those agreements are expressed not to be legally enforceable and include some provisions not included
in the NDIS Act.

Section 207, headed ‘Concurrent operation of State laws’, states that it is the intention of Parliament that the NDIS Act is not to apply to the
exclusion of a law of a state or territory to the extent that that law is capable of operating concurrently with the NDIS Act. This again
reflects a desire to reinforce the place of the joint venture partners in the NDIS project, although s 207 does no more than reinforce what the general
law would provide in any case.

Conclusion

The NDIS represents the increasing use of joint venture initiatives involving the Commonwealth and some or all of the states and territories, but the ambition
and complexity of the NDIS arrangements represent a high water mark. This is because of the high cost of the full scheme and the interest and pressure
from stakeholders who approach all joint venturers with their policy prescriptions.

The extensive requirements for agreement or consultation with all host jurisdictions and, occasionally, with all states and territories before the Minister
can perform most of his or her actions, and the role of the Ministerial Council in approving policy and receiving regular performance reports serve
to emphasise the ongoing importance of all parties in the operations of the NDIS and the NDIA.

Reference was made earlier to the lack of symmetry between the Commonwealth and states and territories in the matter of disclosure and protection of personal
information. It was thought that these arrangements might cause some friction between the Commonwealth and the other parties. However, the Commonwealth
and the states and territories have operated in this area much as occurs in other portfolios with similar statutory provisions. The relationship has
been professional and cooperative.

More generally, the NDIA experience in working with the states and territories in the first year of the scheme has been uneventful with only a few areas
of disagreement. The issues that have arisen have tended to involve aspects of the bilateral agreements between each host jurisdiction and the Commonwealth.
The issues have involved processes such as the numbers of participants admitted to the NDIS and the numbers of plans implemented by due dates.

The joint venture is ambitious but it is clearly extremely worthwhile and all parties are working to make it a success.

*Michael Sassella is Special Counsel, National Disability Insurance Agency.

Endnotes 

[1] The Report can be accessed at http://www.pc.gov.au/projects/inquiry/disability-support/report.

[2] PC Report 2.

[3] Intergovernmental Agreement for the National Disability Insurance Scheme (NDIS) Launch – see https://www.coag.gov.au/node/485.

[4] National Disability Insurance Scheme Act 2013 (NDIS Act) s 117.

[5] NDIS Act s 9 (definition of ‘Ministerial Council’).

[6] Defined in NDIS Act ss 9 and 10.

[7] As defined in ss 11 and 12 of the Public Governance, Performance and Accountability Act 2013 and s 117(2) of the NDIS Act.

[8] NDIS Act s 9 (definition of ‘protected information’).