In addition to ground-breaking cuts to company and small business tax rates, the 2016 Federal Budget contained a number of initiatives directed at Australia’s social safety net.
National Disability Insurance Scheme (NDIS) savings fund
- The Government will establish the NDIS Savings Fund Special Account to address the future costs and shortfall of the NDIS. This fund will hold NDIS underspends and selected savings from across the Government, and will be drawn down to fund the NDIS from 2019-20.
- The Budget credits the savings fund with $2.1 billion over five years.
- The $2.1 billion consists of $711.2 million, reflecting reduced net costs in NDIS transition agreements with the states and territories; and $1.3 billion in savings from the net proceeds targeting social welfare expenditure, after offsetting a range of new priorities in the Social Services Portfolio.
- The Budget provides WA (through the National Disability Special Purpose Payments) with:
- $162.7 million for the year 2016-17
- $169.4 million for 2017-18
- $176.6 million for 2018-19
- $185.5 million for 2019-20
- However, the Budget notes that ongoing arrangements for the National Disability Special Purpose Payments for WA are being considered through negotiations on disability reform in WA.
- The Commonwealth is also providing funding to WA for the trial of NDIS sites in the state of $67.6 million for 2016-17.
Aged care provider funding
- Efficiencies of $1.2 billion over four years will be achieved through changes to the scoring matrix of the Aged Care Funding Instrument (ACFI). ACFI determines the level of funding paid to aged care providers.
- The Federal Government will also establish a $53.3 million transitional assistance fund to support providers and reduce indexation of the Complex Health Care component of the ACFI by 50 per cent in 2016-17.
- These changes expand on the measures made in the 2015-16 Mid-Year Economic and Fiscal Outlook (MYEFO.) These measures are part of the Government’s response to continued higher-than-expected growth in ACFI expenditure, which has increased by $2.5 billion over the forward estimates (since the 2015-16 MYEFO.)
- The savings will be redirected to fund Health policy priorities.
Jobs for Families Package – deferred implementation
- Deferred implementation of the Child Care Subsidy, Additional Child Care Subsidy and Community Child Care Fund by one year to 1 July 2018.
- This will create more than $1 billion worth of savings over four years.
- This is due to the Family Tax Benefit reforms required to fund the child care package not being passed by the Senate.
Job Commitment Bonus – cessation
- Efficiencies of $242.1 million over five years from 2015-16 will be achieved by ceasing the Job Commitment Bonus from 31 December 2016.
- The Job Commitment Bonus is currently a payment of $2500 for Newstart and Youth Allowance job seekers that find a job and stay off welfare for 12 months, with a payment of $4000 for having a job and remaining off welfare for 24 months.