03 March 2011

Of disability, carbon and terrorism - new entitlements for a new century

Three interesting things happened this week.

The Productivity Commission draft report on disability care and support, proposing a number of new assistance programmes, was released.

It proposed a National Disability Insurance Scheme (NDIS) to provide disability-related services and supports to the community at large, with a particular emphasis on funded support for people with significant disabilities and their carers.

People with a ‘permanent disability’ will receive ‘reasonable and necessary’ support free of any income or assets test, determined on the basis of satisfying criteria contained in ‘assessment tools’ which are ‘relatively easy to administer and exhibit low susceptibility to gaming’.

It also proposed a National Injury Insurance Scheme (NIIS). Building from existing schemes, it is to provide lifetime care and support to those suffering catastrophic injuries from accidents, such as quadriplegia, acquired brain injuries, severe burns and multiple amputations, administered under consistent ‘state-based, no-fault arrangements.’

The report notably suggested ‘common law rights to sue for long-term care and support should be removed’.

The House of Representatives debated Tony Abbott’s private members bill creating an entitlement for people (or families of people) injured or killed overseas as a result of ‘terrorist acts’ under a Assisting Australian Victims of Overseas Terrorist Scheme Framework operating under guidelines prepared by the Attorney-General.

Finally, the carbon tax, was imposed on all carbon emitting sectors except (apparently) agriculture and (depending on the time of day) those using petrol, with ‘every cent raised’ to (amongst other things) ‘ assist families with household bills’ was (again) proposed by the Prime Minister.

Each proposal incorporates the payment of new entitlements to particular classes of people satisfying particular criteria.

And they are all dear.

Abbott is silent as to where the money for his proposed entitlement comes from – undoubtedly consolidated revenue.

The Productivity Commission proposes NDIS be funded by direct payments from consolidated revenue, with an alternative option being a levy on personal income (a national disability insurance premium) to be imposed so as to allow the scheme to operate.

The NIIS is to be funded from third party insurance premiums and state based property taxes.

The carbon tax of course, pays for allowances to families to compensate the effect of…well….the carbon tax.

This is odd.

One reason to bring something to tax is to encourage change in behaviour.

In this case, you would have thought the intention of the carbon tax is to get across to the ordinary family the idea that ‘turn on the air conditioner and you will receive a painful smack in the hip pocket. Don’t do it!’

Compensating for the increased cost of electricity arising from the imposition of a tax from its proceeds is….a little circular, really.

There are other concerns with these proposals.

The first is, as many small businesses who geared up to provide to supply pink batts and solar panels for now reduced or removed government programmes (and those people who have, or intended, to change behaviour on the basis of the programmes) know, what the Lord giveth, the Lord can taketh away.

People can, in good faith, organise their affairs on the basis of the conditions of programmes or ‘relatively easy to administer assessment tools’ and find that all of a sudden the rules have changed, with great personal cost.

The second is the increase of the role of government.

For example, when the Prime Minister announced the carbon tax, the Sydney Morning Herald reported that:

Together with the Climate Institute, (Independent MP Tony) Windsor says more than 30,000 jobs are waiting to be created in the transition to environmentally
friendly electricity generation.
However, the report went on to say:

The institute’s chief executive officer John Conor said the net figure of 30,000 jobs would be impacted by challenges in the coal-rich Hunter Valley and Victoria's La Trobe.

"If you manage this problem you can grow opportunities," Mr Conor said.
You have to hope that the outcomes to be achieved by imposing the carbon tax are so whizzer that it’s worth having the lives of Hunter and La Trobe valley residents turned upside down – and that the residents of those areas will enjoy having changes to lifestyles ‘managed’.

The final concern is the possibility that a culture of dependency can be developed.

An example is the proposed entitlement right to be created if someone is identified as being ‘disabled’ under the proposed NDIS.

There is no particular argument about the appropriateness of providing government support to those with catastrophic illnesses or injuries.

Moreover, there is substance to the proposal of creating an entitlement right on the basis of an objective level of disability rather than the current multiple pathways to, and different levels of, entitlement depending on circumstance.

However, if the threshold level of eligibility is cast too low, there can be circumstances where a person could become eligible to receive a benefit because something objectively identified as a disability is simply part of getting old – a reasonably foreseeable circumstance that an individual could plan for.

The mere knowledge that there is a ‘right’ that will accrue in due course can mean that many will simply not prudently plan for the future, ensuring that future generations will have to ensure that this scheme (and all the others, like Abbott’s proposal and compensation to ensure families are not impacted on carbon taxes etc) are fully funded or face the electoral fury of the entitlement class and its supporters.

Tax levels will need to reflect this.

Finally, as we have previously discussed, the quality of the services provided will vary depending on the competing pressures on the budget at any given time.

Many will simply be stuck with whatever the government dishes up…….which may not be much at all.

The increasing temperature of the debate in Canberra illustrates that people are slowly becoming aware that this Parliament could really make decisions that influencing the structure of Australian society in the 21st century.

Better buckle up for the ride.

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