The Greens have secured an eight-week extension of the Senate inquiry into the government’s National Disability Insurance Scheme (NDIS) legislation, but declared they will vote against it regardless. The extension, which will run until August 14, will cost the government several hundred million dollars in projected savings.
Government Forced to Agree
The government had little choice but to agree to the extension, as it needed the Greens’ support to pass its tax package before parliament rises for its winter recess. If it had held out, the Greens and opposition would have had the numbers to vote for the longer inquiry in the Senate.
Minister for the NDIS Mark Butler said the delay would cost “a few hundred million dollars.” The original timetable for passage has shifted from this fortnight to August, holding up some changes, though Butler noted the major reforms do not start until October 1.
Greens’ Stance
The Greens said extending the inquiry “would grant more time to build pressure on both Labor and the Liberals to withdraw their support for the bill entirely.” However, they stressed in a statement: “Regardless of amendments, the Greens will oppose the NDIS bill if it comes to a vote.” The Greens noted they had already secured several amendments, including limiting ministerial powers.
Impact on Reforms
The delay complicates the start of implementing the reforms. The cuts to the NDIS are the biggest area of savings in the budget. The budget projects that over the forward estimates, spending will grow about an average of 2% every year as the government resets many of the scheme’s design features, before returning to 5% growth from 2030. Its present spending growth rate is about 10%.
Butler said a six-month extension, which the Coalition wanted, “would cost the budget billions of dollars, but would also delay our ability to get those cost blowouts under control, to clear up eligibility rules, and to crack down on the fraud and the integrity issues that the community knows are there with the NDIS.” He said the government would use the extra time to provide reassurances about the NDIS reforms. Labor is looking to the Coalition to ultimately provide the Senate numbers to pass the legislation.
Tax Package Amendments
On the tax package, the Greens won an amendment to prevent people purchasing investment residential properties through self-managed superannuation funds to dodge the capital gains tax increase. The Greens said this would stop “wealthy property investors exploiting a loophole.”
Last week the government announced several changes to the controversial tax reform package, after sustained attacks from business and other critics. In relation to the latest change, the government said superannuation funds were generally banned from borrowing money to invest, with the exception of “limited recourse borrowing arrangements” (LRBAs) used by self-managed superannuation funds. These arrangements will be banned for residential property in the future, although current arrangements will stand.
Treasurer Jim Chalmers said multiple inquiries had raised concerns about the current arrangements, including under the Coalition government. The arrangements make up under 1% of total residential property borrowing. The change is a saving to the budget of $50 million over the forward estimates.
Additional Spending
Overall, the government has been spending substantial extra money since the budget. Earlier changes to the tax package cost $475 million over the forward estimates, while the partial extension of fuel excise relief, announced at the weekend, will cost $400 million.
