NDIS Independent Pricing Review

The Independent Pricing Review undertaken by McKinsey & Company has now been released. The report made 25 recommendations all of which have been accepted by the National Disability Insurance Agency (NDIA). 

Jobs Australia, along with most employers in the sector, National Disability Services (NDS), unions and academic researchers, has been concerned for a long time that NDIS prices are inadequate to cover real labour costs and infrastructure for most established providers.   

The report’s recommendations go part of the way to addressing some concerns, but still fall short of addressing all our concerns. In particular the recommendations don’t sufficiently deal with the real labour costs of a skilled and stable workforce. Some of the recommendations which will assist include establishing a higher price for more complex supports, and some improvements in relation to travel time and client cancellations.

The tight pricing under NDIS has been a driver of much of the debate between employer organisations and unions in the 4 yearly modern award review for the Social, Community, Home Care and Disability Services Award. 

Pricing is also a major constraint for organisations engaged in enterprise bargaining. Our experience in assisting disability providers with bargaining has been that the price is pushing employers to industrial strategies around casualisation and cost shifting on to employees. The problem is that these types of approaches cut across the workforce strategies needed to recruit and retain a long term skilled and committed workforce.  

A recent article in Pro Bono highlights the effect on workers of this type of cost shifting, according to an academic case study. The experiences of those workers are consistent with the evidence unions have been presenting in the modern award review to resist employer claims for more flexibility.