MICHELLE GRATTAN, HOST: Mark Butler, Minister for the NDIS, last week announced big changes to curb the scheme’s high costs. Butler wants to get the annual cost increase in the scheme down to about five to 6 per cent, largely by having children who have developmental delays or mild autism put on alternative supports in the future. The big question, however, is whether the supports that will rely substantially on state governments to roll them out will be properly delivered so that people don’t fall through the gaps. Butler is also Minister for Health, and his remit as well covers Aged Care. He joins the podcast today to discuss the issues in all these areas.
Mark butler, you announced last week big changes to the NDIS, centred on removing children with developmental delays and mild autism onto a new form of support under your proposed Thriving Kids program. Now, the states will mostly have to deliver the services for these children, and the states have dragged their feet in getting such services underway previously. How can people be confident that adequate services will become available when they need it?
MARK BUTLER, MINISTER FOR HEALTH AND AGEING, MINISTER FOR DISABILITY AND THE NDIS: That’s the work now that the Commonwealth and states have to do. You’re right to say this has dragged a little bit. I made that point at the Press Club last week. This was a recommendation from the independent NDIS review that there should be a different system for children with mild to moderate needs, and that was a recommendation accepted by National Cabinet way back in 2023. It's not a new concept or a new direction. It's just really, I tried to give it shape in a bit of urgency last week, because the number of young children with mild to moderate needs continues to grow on the scheme. I just don't think that's the right fit. This was a scheme designed for permanent and significant disability. We have to work with states to design a system really located in mainstream broad-based supports because this is a mainstream broad-based issue that ensures that states do lifting where they have particular advantages and the Commonwealth does lifting as well. Iif I think about it in a life course sense, families will generally have a lot of interaction in the earliest months of their child's life with infant and maternal health systems, or child and maternal health systems that are run by states. That means that at that part of the life course, states should do a lot of the heavy lifting. After that drops off though, the Commonwealth systems will kick in a little bit more. Primary care systems through the local GP, allied health funded by Medicare, early childhood education and care centres or childcare centres, again, funded by the Commonwealth, will be a lot of the interaction that families have. Then, of course, the kids end up at school after the age of five. It's a bit about horses for courses from my point of view, making sure at the end of the day that parents have access to supports in the most easy way possible in settings that they're familiar with, whether that's infant maternal health, childcare settings, community settings, and they get the supports that their child needs.
GRATTAN: Now, you're looking to get the growth in the NDIS down to about an annual four to 6 per cent, the growth in cost. The previous target was about 8 per cent, and we're not even there yet. Apart from what you have already announced, will more measures be needed to get down to this new range? And what sort of timetable are we looking at?
BUTLER: You're right to say that our target is 8 per cent growth next year. That was a target adopted by National Cabinet. Again, just reminding people that the NDIS is not just a Commonwealth program. It's a program stewarded by all governments, that was a decision made by all governments. It reflected the concern that it was growing when we came to government in 2022 at a rate of 22 per cent a year, which is just not anywhere near sustainable. We're on track to get to 8 per cent next year. I'm confident we will. Everything's got to go right that we've put in place, the agency itself, the NDIA and government have put in place, but I'm confident we'll get that down to 8 per cent from 22.
I said then that I think National Cabinet, or the Commonwealth's position is National Cabinet should consider a further wave of reforms to get further reductions in growth down to something like five or 6 per cent, which is where you see aged care and Medicare growth rates projected, and that will require more reforms. I set out some areas where those reforms might take place in my Press Club address around pricing. For example, drawing on the experience we have in aged care and hospitals for independent pricing; around the regulation of providers that I think will really start to squeeze out the frauds and the shonksters that are far too big a part of this scheme; and a bit more robust evidence about the services that are being provided. I think that's something that taxpayers rightly want to know, that people with disability want to know, that they're actually receiving services that will make a difference.
GRATTAN: Just on this question of registration of providers that you mentioned, I remember when Bill Shorten was bringing in his reforms to the scheme, the whole talk about the possibility of registering providers got a very negative reaction for reasons that are really, frankly, hard to understand. What's the extent of this problem, and why do you think there is resistance to regulating providers? It seems a sort of no-brainer to me, at least.
BUTLER: You've got to ensure that the registration or regulation of providers is calibrated to risk. If you're a provider of accommodation services, very intimate services for people with complex needs, it's a pretty heavy look that we will have at you. If you're mowing lawns or cleaning, or doing some of those important services, there's probably a lighter touch regulation, and we have that experience in aged care, for example, as well.
GRATTAN: Why are people so resistant to this, though, at least the milder form?
BUTLER: There's a unique philosophy in the NDIS or disability care about choice and control. And I think that is a philosophy we've got to keep in mind as we try to compare disability care or the NDIS to aged care, for example, or healthcare. And there's a very good reason behind that philosophy. If you're talking about lifelong support for people with permanent disability at a significant level, it's right that they have as much choice and control about way in which they receive their services as possible. For some, I think that does raise a debate about whether government has a role in determining which providers they use or not.
Now, I have a view that we do have a responsibility as the Government to ensure that taxpayer funds are being deployed appropriately, and a bit of a duty of care to ensure that providers being funded by the Commonwealth are of proper quality, proper character and have the right qualifications. But that is a debate that we will have as we progress some of the recommendations we have in front of us about a more robust system of registration and regulation.
GRATTAN: Now, in the run-up to Jim Chalmers' roundtable, you hosted one of the mini roundtables in your area. What came out of that?
BUTLER: There's a really terrific discussion. I wrote a letter to the Treasurer just outlining some of the conclusions that that group of leaders in health and disability and ageing talked about over the course of that day. Some of them were pretty traditional productivity measures. here is enormous opportunity to digitise health and social care. I often say that I'm told that about 75 per cent of the world's fax machines are used in health. It is very much behind other major sectors of our economy in digitisation. That's been a real focus of mine over the last three years, but we can accelerate that and get very, very good traditional measures of productivity out of the digitisation agenda. But also, frankly, improve the work of doctors and nurses and other allied health professionals and importantly improve the quality of care and the access to information that patients have.
Digitisation was one. The use of our workforce is another. Too many health professionals aren't able to use all of their skills and experience and training because of what we used to call in the olden days demarcation disputes, frankly. Ensuring that every worker is able to use every ounce of their skills and training is not just good for retention and recruitment of workers, but it ensures that we're getting the best return on our investment we make as taxpayers in training probably the best trained health workforce on the planet.
GRATTAN: Let's turn to bulk billing. The Government made ambitious promises at the election about extending bulk billing. But how are you going to ensure that some people aren't left behind in this in particular states? For example, New South Wales has greater access to bulk billing than some other states. What sort of guarantees are you going to put in there to see no one's left behind?
BUTLER: We don't operate a health system, like the British do, for example, where there's a very direct lever between the Government and what happens in healthcare settings like general practices. These are all private businesses, we have to put in place a pricing or a funding mechanism that leads GPs themselves and practice owners to conclude that they're better off, and, certainly, their patients are better off, if they move to bulk billing.
That's really what we had in mind when we designed the model we took to the election. We looked at every single general practice in the country. We have access to every dollar they bill, whether it's billing Medicare or charging a gap fee to a patient. We know that the funding we put on the table would mean that three quarters of practices are better off if they moved to 100 per cent bulk billing. The other quarter might not, but they'll still be majority bulk billing, most of them will still bulk bill pensioners and kids and so on. That's how we got to our 90 per cent figure. But you're right to say, Michelle, that there's not a single general practice market in the country. There's a bunch of different markets that operate with very different dynamics. Western Sydney and South Western Sydney have the highest rates of bulk billing in the country. It's pretty expensive to run a business there, but they have much higher rates of bulk billing than, for example, Tasmania or the Hunter Valley where it's significantly cheaper to run a business simply because of property prices.
GRATTAN: Or the ACT.
BUTLER: Or the ACT, which is a little bit more expensive. We are focusing on particular markets where they are a problem. Our first round of bulk billing investments in 2023 saw some of the best increases in bulk billing in some of those markets I was worried about. Tasmania, for example, saw the biggest increase in bulk billing. The ACT is a bit of an outlier. I think there's the need, frankly, for more competition in the ACT, is why at the last election I said that we would be targeting some funding to underwrite new practices in the ACT that were set up on a bulk billing basis to, frankly, introduce competition into a small market like this.
GRATTAN: Also in the health area, the issue of trans healthcare for young people is very controversial. Now, you have a review into this. How's that going?
BUTLER: It's being conducted, as you say, a review I asked the National Health and Medical Research Council to conduct of the clinical guidelines in place for what is described by clinicians as gender affirming care under 18 year olds. And that's the appropriate body to do that work. It's got a statutory charter under Commonwealth laws to review and approve clinical guidelines. It's been doing that work for decades. It's one of the preeminent bodies in the world to do that work. So it will take a little of time. I asked them particularly to issue some interim advice about the use of puberty blockers.
GRATTAN: And when's that coming?
BUTLER: By the middle of next year. That obviously is one of the more contested or controversial aspects of gender affirming care and something the Queensland Government has decided to act in Queensland itself upon. Remembering, of course, that pretty much all of these services are delivered by state government services, clinicians employed by state governments. I saw our responsibility as making sure that those services and the parents and children and teenagers have access to the best, up-to-date clinical advice, because this has been moving at a global level, particularly because of a big review, the Cass review in the UK, but also in some other countries in Europe as well.
I want to make sure we have access to the best advice. I'm concerned that this not be politicised. I'm glad it wasn't at the last election, because that usually ends up just hurting young people and their parents. And I think taking a bit of the sting out of that, giving it to the preeminent authority in the country to review the evidence and issue sober, expert clinical guidelines was the right thing to do.
GRATTAN: Also for kids, you've flagged the possible addition of a new Medicare item for allied health professionals when kids have particular needs. Would that require a GP referral, or would they be able to go straight for treatment or assessment? And would the numbers be capped?
BUTLER: All of that is to be determined. What I did last week at the Press Club is flag some areas where states and the Commonwealth respectively are able to provide supports using existing systems. We're not getting a blank sheet of paper out and a pen and starting a system from scratch. We have existing systems that I've talked about earlier in our interview, and that is one of them. Now if generally, the way Medicare works is if a patient is referred to an allied health provider for a Medicare subsidised allied health session, that happens through GPs by and large, and that would be the starting point, I imagine. But equally, there are opportunities in group settings or congregate settings, in play groups, community health settings, for example, where children and their families might have access to allied health support other than through that traditional referral, single provider to single patient model. I've got a pretty open mind about this. I want to pull together the right group of people to give us the best possible advice about this system.
GRATTAN: Let's turn to aged care. The introduction of the new system has now been delayed for a number of months till November. But why can't you speed up the number of home care packages under the existing system? There's now a very long queue, people in great need, some in great distress.
BUTLER: We've been increasing the number of home care packages in the market every budget and every budget update. The mid-year economic fiscal outlook, by and large, in the time we've been in office, new packages are released into the system every week or two because people exit their home care package. There's a constant sort of flow of new packages into the system. The deferral of the act was really a product of feedback we got from aged care providers and consumers that, particularly because of the election taking place between the passage of the legislation and when it was due to start. That there just wasn't a long enough runway to get to what is a substantially new system. Only a four-month delay that a new package system will start on 1 November.
I recognise that there is a very steep increase in demand for aged care right now. The ageing of the baby boomer generation is really sort of hitting aged care right now. The average age of taking up a home care package is generally the late 70’s, and the average age of entry to residential care or nursing homes is 82 or 83. Now, the oldest baby boomers are about in that age bracket now.
That's why that lost decade where there was no aged care reform, up until we came to Government, has been so critical. We had to concertina what should have been a rolling decade of reform into three years. When I did reforms back in 2012, we deliberately set up a five-year rolling process of reform to ensure that it was ready for that ageing of the baby boomers, and nothing happened. David Tune did a really worthy report. It was shelved and instead, when Sussan Ley was the Minister as it happens, hundreds and hundreds of millions of dollars was taken out of the aged care system, which is what led to the Four Corners Report, the Royal Commission into Aged Care, and then exacerbated by the COVID pandemic as well.
We've had to compress what should have been a decade of reform into three years. And I know that's put enormous pressure on the aged care sector itself but, more importantly, on the community.
GRATTAN: One can understand, from what you're saying, the difficulties of revamping the whole system, but that doesn't quite answer the question of why the system of these existing packages can't just be hurried up, at least for the coming months till you move to the new system?
BUTLER: We are getting new packages into the system which are packages we -
GRATTAN: But faster than that -
BUTLER: packages we funded in MYEFO, packages that are coming available because people are exiting the system.
GRATTAN: Couldn't you put more money in now?
BUTLER: There is also a natural bottleneck in this scheme because of the availability of workers, as we experience in a whole bunch of areas particularly in health and social care. But it is harder to get workers into the home care system because of the nature of the work. It's just not paid as well as some of residential care. Fixing up aged care wages in the last term was a really important, not just justice for them but a way of alleviating some of those supply bottlenecks. There just is a natural limit to the number of packages we can introduce into the system in one fell swoop. They'll just sit there otherwise not being used because there aren't the workers.
GRATTAN: Last term, you announced a ban on the sale of vapes except through pharmacies. Has this ban, though, been a failure? And on the question of cigarettes, the excise goes up partly to try and dissuade people from smoking. But what this has resulted in is a whole black market, criminal activity, shops being torched all the time. How should that be addressed? How is this whole area of vapes and cigarettes to go forward in a more positive way without all these disasters?
BUTLER: Let me deal with them separately because they're slightly separate issues. The vaping ban, frankly, should have happened five, six years ago. It sort of exploded under the cover of COVID, not just here in Australia but the rate of young people's vaping just sort of came out of nowhere and became a very serious public health concern and the number one behavioural issue school principals were reporting. The bans we've put in place on vaping are working. Fewer kids are vaping, there's no question about that.
GRATTAN: Do you have numbers on that?
BUTLER: Yeah. We've got three waves of substantial research, two from the University of Sydney and one from the South Australian Medical Research Institute. Both of them show rates of vaping down among teenagers, and that really was our major focus. In South Australia, that rate is quite sharp because I think South Australia has the best system of enforcement around this, and that is a common issue across cigarettes and vaping.
What we also know is some of the measures were put in to reduce demand for vaping. Not just a supply constraint but demand reduction as well has been hugely successful. We're now rolling out in every school, a proven program, published in The Lancet Medical Journal, a clinical trial, probably the preeminent medical journal in the world that shows about a 65 per cent reduction in willingness to vape among high school students who've done this program.
We've got a range of things happening across the board; supply reduction, demand reduction. We're in social media using influencers, advertising on TikTok, trying to get anti-vaping messages to kids who have until now been inundated with pro-vaping messages. I didn't expect it to work overnight, but I'm really confident that we've seen the peak in vaping rates that were climbing at an alarming level year upon year.
Illicit tobacco is a much more worrying issue. The big increases in excise were actually over the last decade. Under the last government, excise increased by 220-odd per cent. They've increased by a bit more than 20 per cent since we came to Government. Price is a factor, but the big driver of the change in the market is organised crime has just decided this is a really low-risk, high-reward source of revenue for them to bankroll all of their other criminal activities. And you've had a couple of big gangs get into it big time. And the idea that we could reduce excise in a way that would mean legal cigarettes were competitive with the illicit packs, it just doesn't really stack up. Every country has illicit tobacco. Countries that have very cheap legal cigarettes still have high levels of organised crime in them.
I don't pretend price is not an issue, but a simplistic response to reduce legal prices is not going to solve this issue. The only way to solve this issue is solid, enforcement. And we're doing our bit at the borders. I want states to do their bit. As I said, jurisdictions like South Australia that are leaning into this, for example, giving ministers the power to order shops to be shut without taking them to court where they're doing the wrong thing, is already starting to be picked up elsewhere. New South Wales have just said they'd pick that up. We've just got to get more serious about tracking these people down, putting them in court, taking their profits away and changing that risk-reward balance.
GRATTAN: Now, just finally, you were asked in Question Time this week about the Medical Research Future Fund. This is now at $24 billion. It was envisaged that it would pay out about billion a year, but it's now paying much less than that. Why is there a cap of, I think, around $650 million payout a year?
BUTLER: There's been a policy decision in place for some years to cap the amount of $650 million, which was largely about trying to grow and protect the capital in the fund. As I said in Parliament this week, there is a review: the 10-year review after the creation of the MRFF undertaken by the Treasurer and the Finance Minister in accordance with the MRFF Act that will be published in the near future.
GRATTAN: Has that been done already?
BUTLER: It's been done. It's been considered. It will be published in the near future.
GRATTAN: You can't tell us the outcome?
BUTLER: No, I'd love to, Michelle, but I can't on this podcast, there's also a health and medical research strategy for the first time covering the whole sector that Rosemary Huxtable, the former Secretary of Finance and a Former DepSec of Health as well, has been doing for us. And she's publishing that draft this week for further consultation that will, I'm sure, deal with this issue.
I do want to say, though, that $650 million has vastly increased the amount of health and medical research investment in our country. When I had responsibility for this area 12 or 13 years ago as a Minister, the total health medical research budget was $650 million. Now, it's $1.5 billion because it's that $650 million on top of the traditional funding from the National Health and Medical Research.
GRATTAN: But those extra hundreds would help too?
BUTLER: Of course. We can always deal with more. There's still a low success rate amongst our terrific health and medical research workforce, which for eight decades since the creation of the NHMRC has been one of the best on the planet. I'd love to see more funding into this sector, but this has been a longstanding policy position of both governments.
GRATTAN: Mark Butler, thank you for talking with us on this busy parliamentary day. That's all for today's podcast.
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