Imagine yourself, for a moment, temporarily transported from where you are right now. You are in a clearing in the woods. Around you are nine other people. You all appear to one another in the same, shapeless form. You have no knowledge of your position in society, your appearance, race, gender or wealth. In the middle of the clearing is a table, on which sit 10 identity tags and a set of instructions.
It says that one of you is the legendary US investor Warren Buffett, another an unemployed, single mother, one a well-to-do accountant, another a person with cerebral palsy, and the others a child, a grandmother, a TV presenter, a nurse, a homeless person and the Prime Minister. But none of you can remember which.
The instructions say you will all be restored to your former identities, but, first, you have the opportunity to agree how you would like to distribute your wealth once you are.
With no idea whether you will be Warren Buffett or severely disabled, what sort of support mechanisms would you put in place? What sort of social contract would your group design?
In his 1971 treatise A Theory of Justice, the American philosopher John Rawls argued that in such an “original position”, behind a “veil of ignorance”, the only rational thing for risk-averse, self-interested human beings to do would be to decide to redistribute resources to ensure the least well-off are protected.
We can’t control the lottery of birth, but we can organise society to ameliorate the suffering of those who, through no fault of their own, draw the short straw.
And so we come to last week’s report by the Productivity Commission on its inquiry into the federal government’s proposed National Disability Insurance Scheme.
If you ever feel you’re having a rough day, try reading one of the more than 1000 submissions to the inquiry from disabled people and their carers about their daily lives.
Here is a smattering: “Absolutely terrified”; “Devastated”; “In crisis, physically, emotionally and mentally”; “Emotional and financial rollercoaster”; “Incredibly arduous and draining”; “Confronting and disconcerting”; “Humiliation and isolation”; “I feel completely abandoned”; “Completely unsupported”; “The stresses over the years is unrelenting and huge”.
Together, these heartfelt submissions and the commission’s final report paint a picture of a disability support system in complete disarray. In the commission’s words: “The current disability system is underfunded, unfair, fragmented and inefficient, and gives people with a disability little choice and no certainty of access to appropriate supports.”
We spend just 1.8 per cent of our annual gross domestic product on payments for people with disabilities, carers’ payments and disability pensions – less than half the spending of comparable economies such as Norway (4.2 per cent), Denmark (4.2) and Sweden (4.5).
The commission estimates bringing disability support services up to an acceptable level would require a doubling of the current $7 billion annual spend on disability support (comprised of $2.3 billion from the federal government and $4.7 billion from states and territories.).
Get that? According to the Productivity Commission, disabled people in Australia receive just half the support they need to lead a dignified and happy life. If a society is to be judged by care provided to its most disadvantaged, Australia is failing.
What to do about it? A simple answer would be to double spending on disability support payments tomorrow. The Gillard government could do it, if it hadn’t committed itself to a completely arbitrary budget surplus by 2013. Indeed, while the commission has proposed a seven-year pathway to a full disability insurance scheme (with pilot schemes starting in 2014 in some states) it also recommends that in the meantime “the Australian Government should supplement funding under the National Disability Agreement to reduce some of the worst rationing”.
Longer term, however, there’s little point throwing more money at a broken system. That’s why the commission’s recommendations for overhauling the entire system of delivering support to the disabled are so important.
Under the proposed scheme, similar to Medicare, the federal government would guarantee to meet the lifetime care needs of the 410,000 Australians with permanent and significant disabilities.
Funding would be locked in, set aside at a legislated rate out of federal government revenue, rather than “subject to the vagaries of government’s budget cycles”. Disabled Australians would be assessed to determine their levels of need. Then money would be put directly in their hands, or those of their carers’, allowing them to choose the services and service providers that best meet their needs. At present, funding goes mainly to service providers.
This reflects one of the most fundamental principles of economics: that choice and competition are necessary to drive efficient, low-cost, high-quality service delivery. Under the scheme, if a service provider is not up to the mark, disabled people will be able to take their money elsewhere.
By driving such efficiencies and smoothing a path for disabled people, and their carers, into the workforce, the commission estimates the scheme will generate “profound economic benefits” that more than make up for the direct budget cost.
It is estimated the scheme would boost employment by 220,000 people by 2050, adding 1 per cent to gross domestic product in that year alone.
Lower income support payments would reduce costs for government. Earlier and more effective intervention in disabled people’s lives would reduce health costs over time.
Savings would also be achieved by reducing “bed block” in hospitals where beds are taken up by people who could be supported at home. Reducing the number of people in the community with untreated psychiatric conditions would also drive savings in the justice system.
With a soft heart and hard head, the commission’s report provides a complete blueprint for disability support reform. I dare say, if we gathered in the woods, we’d struggle to come up with anything better.