Senate Community Affairs Legislation Committee, , 4:01:22 to 4:36:04
Senators raise concerns about provider insolvency, tax compliance, and the vetting processes for registered and unregistered NDIS service providers.
Topics: Social services, Integrity
Speakers: Pauline Hanson, Louise Glanville, John Dardo, Hon Jenny McAllister, Hon Anne Ruston, Blair Comley PSM, Dorinda Cox, Luke Mansfield, Natalie Wade, Nory Mccay, Tim Eaton
>> Thank you very much. Um thank you. Can you tell us the number of known providers whose businesses have collapsed in the last three years?
It's Nory Mccay speaking. I'm the deputy CEO at the agency responsible for partners and providers. So in terms of providers who have left the market, we only have information about registered providers that leave the market. So I can tell you the number of registered provider exits that
>> for the the number of businesses that
So I can't tell you individually which providers leave the market if they're
not regul.
>> So in terms of the total numbers of providers that there are in the market that has grown year onear
>> I'm aware of it's nearly 260,000. I'm asking for the number of providers that have collapsed in the last three years
>> and we don't collect that data at an individual level. The only data that we have is the total number of providers who are making claims and where a provider is a registered provider. We do have numbers about how many registered providers have exited the market.
>> Right. Well, in total, you've got about 64 million that it's owed to the tax unpaid tax in superanuation and wages from providers that have actually collapsed. That's $64 million. And um that's why I'm asking and I want
So we don't have information about their tax that relates to how much unpaid tax or superanuation that an individual provider would have. That'd be question for other departments. We don't collect.
>> But you must you must know that you've got providers on your books that these organizations have collapsed. One for a case in point is cocoon collapsed and left the debt of payments owed owing millions. Now, if you're allowing these people to get on your books and to act as a provider or a company or a business and that type of thing, that's taxpayers dollars that are paying them. These are either scams or your governance of your organization is hopeless. So, which is
>> Senator, um John Do um and I I um am very aware of the issue you're raising and I'm very concerned about the issue that you're raising. Um, I might
>> Can I just ask the name plates be put up? Sorry. It just makes it easy for us to reference. Um, who's at the desk? Sorry to interrupt.
uh, I might continue while that's coming. >> Yeah. Um the the the first thing to note is that um under current tax secrecy provisions um uh the tax office is not allowed to share data with us um u before we register a provider or before we pay a provider. Um so that is just something that is not allowed under current tax secrecy provisions. Um so so even if we wanted to see that today before we register or before we pay a provider we are not allowed to see that. Um in the fraud fusion task force senator um we have uh created the ability um to see um tax data for very specific cases that are referred into the fraud fusion task force and we treat those cases holistically including having the tax office. We we refer cases to the tax office and we have the the the tax office work with us to treat those cases. Um we've been very transparent about this gap in the law. Um um and we went to you know it was included in a consultation paper that was distributed in December 2024 by Treasury on on um the tax secrecy provisions. uh and there was commentary um provided by the sector by the professional associations, the accountant professions and others on on on the fact that that secrecy provision exists and what the future may look like. But I just want to be really transparent that is not a new thing. That's always been a thing and unless the law is changed, we will not be allowed to know the tax circumstances of a provider before we register or pay
>> I'm quite well aware of that. So what I'm saying is if you got all these businesses that are folding, going under, owing millions of dollars. So along the way, you have not done your job properly and having a clear governance over how this monies are spent, especially when organizations get to millions of dollars that is owed not only to the tax debts, but other debts and payments and wages. That is taxpayers dollars. Now I've asked you questions now for a figure. I've got the figures here of 22 23 23 24 of fraud payments and you tell me that it's probably a lot bigger than what you said because it's $77 million over two years. You won't give me the fraud figures for 2425. You are moving the goalposts. You're moving definitions. You're not being upfront with the Australian people of what's going on. That's only recorded what you've caught them out to proven or in the courts. How much more fraud is going on there that you're not telling the Australian taxpayer? We're talking about a, you know, 52 to5 billion industry that it's going to blow out to 100 billion by 2032. And I know constantly I'm hearing from people the number of scams that's going on. I'll ask you this all this question also. The NDI NDIS integrity program blocked 86 million in payments in 2425. What are you going to do to ru um re in eradicate this fraudulent behavior? If you've picked this up to block it, why did they get to a stage they can actually be providers? >> So is it again your governance?
So, so I I think um just to be very very transparent um there are multiple layers of work that we're doing to to to give us an assurance that providers that are working in the scheme um are the right providers for registered providers and and keep in mind is the difference between registered and unregistered. For registered providers, we have now improved the way we identity proof them. we've improved the way we identif is um a lot more work happening in identifying those providers that need to be removed at an earlier point in time because of their claiming. As I as I shared earlier, we've taken out at least 2 and a half thousand of those that have previously claimed $5 billion and we've stopped them from being able to claim. Um, we we we are referring to the tax office every provider that we think has a problem with their affairs. We are referring them to other agencies if they've been involved in any other agency process and we're using the fraud fusion task force to take them out. We're referring to the commission for the commission to treat through a range of mechanisms. I I the the the breadth of the interventions is unprecedented. It's never been done in any government program in history. and and some of these interventions never existed before we built them in the fraud fusion task force. On top of that, on top of that, we are you know there is work that will happen, you know, um in reform about unregistered providers and what they may need to look like in the future. And so so as we go forward, we have, you know, a forward work plan about how we make payments more more more transparent so we can see the bank account that they're going to for every provider and so that we can report that information to the tax office in a more timely way. And so that will mean the tax office will be able to see that. We are already working on that design and we're already building the But there is no doubt that there are things that we are not allowed to see and not allowed to do today under current law. We are not allowed to see today for the 270,000 providers something that indicates for us whether they have or haven't paid tax for the last year or the last 3 years. We are not allowed to see that by law. That is not a fault of the NDIS or the NDIA administering it. That is just a fact a fact of law.
>> So is that government policy?
It's it's been the law for decades. So that that is the current state of the law. As I said, we we've the consultation has occurred around what that may or may not look like. But but the question that you're asking that limitation is a limitation of the law, not our administration.
>> Then I then I got to ask the question then these providers that come on board, what investigation is done into them that they are actually going to do the right thing by the client? because a lot of these people that they care for um have no ability to actually manage money or do anything like that. What qualifications if if these people have got um past criminal convictions and different things of fraud or whatever, are they still allowed to be a provider? >> Is there investigation into them? Um,
Senator, can I say one broad thing and I might ask the quality and safeguard commission to give you information about how we assess whether or not providers are doing good quality work or not. Um, as a whole, your observation that this is a big market that needs to be well regulated is perfectly correct and I agree with that. Um, in this market, just like other service markets, we expect every business that's participating in this market to pay their taxes, pay their workers, including their superanuation, uh, make only those claims on government that are actually owed and deliver quality services. We also expect them to offer services to consumers that are good quality and perform the function that are advertised. Just like in every other market where um businesses are offering a service, those expectations are managed by different regulators. So the obligation to behave fairly and in line with consumer law is regulated by the AC. The obligation to pay your tax is regulated by the ATO. The obligation to pay your workers is, you know, regulated by a number of agencies including the Fairwork OMBbudsman. But the NDIS system which includes the NDIA officials who are here and the quality and safeguard uh officials who commission officials here have some particular obligations uh to ensure that services are delivered safely and to ensure that services are delivered with integrity and that this the payments that are claimed are genuinely owed. Um and I just offer that perspective because that's not uncommon. We've got lots of markets where there's more than one regulator. I think the really important development in the last few years which Mr. as evidence alludes to is we created this fraud fusion task force and it brings together a lot of those different regulators so they can share information compare notes effectively and conduct joint operations where they identify that a particular business is in breach of more than one of their obligations to the Australian government and the Australian people. I I just offer you that perspective because that's how we think about the problem. We want this market to work well, but we recognize it's going to involve drawing on the levers that are available in different bits of Thank you for indulging that explanation. You asked about how quality is secured, who can work in the system and what businesses can
>> investigations done into them because on one case there you had um an Marie Smith that incidents of what happened to her. So I want to know what qualifications these people should have and taking on these jobs and positions because if you don't do it your department NDIA or NDIS doesn't um look at the qualifications of these people we're going to have many more and Marie and we've seen it out there the care that these people supposed to be getting are not getting
it senator absolutely critical and it's why we've put additional resources into Miss Glanville's organization we've There are an additional 320 staff working there. It's another area of investment because people have to be safe and uh we check we have a worker registration system. We also have a provider registration system and a compliance system for quality that Miss
they're really good questions you ask and I'm very pleased you're asking them. And I've asked um one of my colleagues to come up to give you the detail you're seeking because you're asking what do we actually do before someone is gets the ticket to ride sort of thing. So I'm going to ask um Mr. Eaton just to explain the steps we take um in terms of registration of a provider. For example,
>> Senator Tim Eaton, acting deputy commissioner um regulatory operations. Um Senator there's a range of legal tools available across the agency and the commission. Uh some of which are preventative and some of which are reactive. Amongst those preventative tools for example we have requirement for registered entities on on registration uh to be found to be a suitable person which involves a number of checks in terms of their integrity um both going to their you know criminal history and uh work performance and and so forth. Um so they must pass that suitability test and then they have an ongoing auditing requirement as well to ensure they remain suitable persons and that applies to all key personnel in those organizations. So essentially the people that that run the place also in terms of individual workers where those workers are providing a certain range of supports um the higher intensity type of supports they are subject to worker screening criteria that's administered by the jurisdictions but we in our agency keep a database that looks across the entire country. So there some of the preventative mechanisms that are in place. We also have a range of instruments to look at um I guess a responsive or reactive approach to things that do go wrong in the system and my colleague mentioned earlier criminal prosecutions is of course one of those. Uh but in our agency we have a number of other tools that are um able to be deployed in a more timely fashion and they're immediately effective. So for example, we can issue banning orders on key personnel or on organizations or on individual support workers. Those banning orders uh turn on a balance of probabilities rather than the criminal um rather than the criminal test. That means that we can uh respond to bad actors in the market in a prompt fashion and ban them uh often times for life. We of course recognize that some of those banned people will seek to Phoenix under other other organizations, other companies. And of course, that's why we continue to invest in our in our data systems to make sure that we've got improved data matching so that we can better detect those sorts of furnacing activities. So it's a comprehensive mix of preventative and reactive legal mechanisms we've got available to us that help us deal with the entirety of the problem. The problem is very significant in our organization alone. We receive 25 to 30,000 complaints every year. Those complaints can range from the trivial to the very significant. to triage and find the right priorities amongst those 30,000 or so complaints and 100,000 or so reportable incidents. We have to have a riskbased system in place. That was noted by the ANAO when they audited us and we continue to build a riskbased prioritization system that lets us find the most important thing amongst those complaints and incidents.
uh Natalie Wade, associate commissioner, I just wanted to highlight the importance of determining quality service uh to be by people with disability at the commission. We are firm and committed to and have put uh effort into ensuring that what a quality service is and the way in which registration practice standards and other levers that the commissioner has available to her uh underpins what people with disability uh see to be a quality service for their life so that they can deliver uh the human rights that they want to see um in their everyday life. And so a part of that is absolutely central to ensuring that we um set uh regulatory uh frameworks that reflect contemporary and modern expectations uh for people with disability that is led by them.
>> And Senator, just to add to the couple of bigger picture things, um the commission uh I'm certainly very pleased that there is a bill before this parliament. uh and uh we don't talk a lot about that bill because it's been referred to a committee but um we will soon I will soon be appearing before that committee with one of my colleagues to uh give um evidence to that committee about why the reforms that are in that bill which relate a lot of them to the regulatory powers of the regulator that's the commission um and and enhancing those powers. A good example is um uh uh for example auditors and uh you know how we monitor what might be the role of auditors in the sorts of things that Mr. Dardo has been talking about and how we understand that. So that's a really important piece and the other really significant thing I'd have to say that I'm very pleased government has done is um uh commence the process of us uh registering areas of highest risk as Mr. Eaton said. So um supported independent living um platform providers these are provision of services that that we understand from our regulatory work and our understanding of what what we see in markets that these are areas of the highest risk and so um we've started the process and the process of um registration for those areas um uh uh will commence from 1 July this year. That's very significant um because al allbeit um everyone has to comply with the code of conduct whether they're registered or unregistered um once they're registered we can look at those things more thoroughly.
>> It's just why I raised this that it's been brought to my attention to look at the immigration immigration agents across Australia look to see if they are importing people as students or as new workers in NDIS and age care. This is where um harm is stemming from in a majority of cases. Additionally, they are often NDIS providers, RTO's or the front for an RTO which is funneling people into recognition of prior learning qualifications. they are not as robust as the RPL as they should be and that's why the concern has been raised. Have we got a lot of people coming in the country as students or as migrants to take up positions um in the NDIS and um are not qualified to be taking on those jobs and just a way of backdooring into Australia.
>> Uh I can't comment comment on that specifically but what I can say is that um when providers are seeking to become registered within the uh in DIS
>> Yeah. Yeah, but hold on. You say registered. You've only got about 25,000 people that are registered and you've got about 260,000 that aren't registered.
>> Yes.
>> Can we just let Miss Gan uh complete her? Um
>> no, but I want the question to be right. What I'm getting an answer to. So both
both registered but also under certain provisions in our code of conduct, it is um essential that employers of staff um can support their staff and understand that their staff are actually able to do the work that they're being given. That is a critical and fundamental component of providing quality and safe services. And as recently as I think the week or the week before um we've been putting out material um and we've done quite a big um circuit around the country in different parts to explain the importance of for example meal time management um and that the um level of skill required to assist people uh with eating when that is part of what they need um must be done by uh with the appropriate training the appropriate understanding of what the purpose needs the appropriate diet plan. So all of these things contribute to the issues you're raising about better quality services and safer services. And to be honest with you, um I don't like the thought of workers being asked to do work that they actually can't do. I think that's a shocking position to put anyone in. Um and I think it's really important that we we consider not only the quality and safeguards for people with disability, but what workers need to make them feel safe in the work that they're delivering that is very important to the lives of people with
disabilities. I've got you say about 280,000 providers registered
somewhere between 283
>> when is it enough why are you still registering more providers
>> uh well um I there's many answers to that question um of course we want a rich and diverse market the scheme is based on um choice and control for people with disability and it's always been contemplated from the very early days of the scheme in 2012 that um there would be a rich market in that way. But let me say this that of course we want the right providers in the market and I think there's already been some conversation about that here at Senate Estimates. We want providers who um who are committed to the work who understand their obligations, their very critical obligations in part of delivering that work um and who um on the whole as we find them are complying. uh and that's what we want to see much more of that um within the systems that that we work in and that's a pretty important part of the sustainability of the entire scheme.
>> I agree. Um just uh flagging that I will question. Okay.
>> Thank you. >> Um and and yes, we do want people there for the right reasons, not ripping off the Australian taxpayer as well. Ali um Biag is a Sydney Southwest owns a registered training organization, an immigration agency and an NDIS service. He belongs to a broader network of NDIS providers where the director's names are constantly moved around a group of NDIS registered organizations. The providers, all shared ownership, refer only to their networks. Isn't that against the choice and control element of the NDIS is built upon?
>> I think um the the Thank you for your question, Senator. Um uh um Mr. Eaton briefly referred to Phoenixing and I think Mr. Dardo did as well, which is where um organizations take on a a a different role and take on different um work obligations, different names and all those sorts of things,
>> which can be a scam. So is that
investigated? That is that is definitely part of um the fraud work to see what what movements are happening and where people are going. Um and that is that is a particularly important part of that work to understand movement change and shift uh in organizations and and when we um are given material that indicates these sorts of very serious issues particularly where people with disability are not getting the quality and safety in the services they receive then as Mr. Eaton has pointed out we have many ways of taking action and that is what our desire is particularly mine and um uh and Miss Wade who as the associate commissioner uh we are dead keen to see these things get better and better and better and I'd have to say I am feeling far more optimistic than I did when I started a year and a half ago because I can see some of the changes and the impact they're having and I would be hopeful at future sessions here of being to talk m be able to talk much
uh thank you uh Miss uh Glennville. Um it's a precedence that I've created, well continued in this uh committee um Senator Hanson of offering a private briefing with witnesses if um there are uh senators who would like to take advantage of that. I am very open to uh organizing a private briefing um so that um there is much more conversation that can flow not just here at estimates but also um for an area of interest that I'm sure other senators share. Um very very happy to facilitate that. Um uh I think that would be worthy. Uh thank you. Um Senator Ruston,
>> thank you very much. Um okay, where were we? Oh, that's right. you you were going to try and get me some numbers on um the projections in relation to the impact on budget of the um 4% to 8%. I think I actually said
that they would be updated at budget in the ordinary way like the because they as the secretary described to you uh they interact with a range of other things including the way that the states and territories will work with the commonwealth to move from our you know the target of 8% uh which it was the target until the recent meeting of first ministers uh to the uh goal of reaching 5 to 6% rate
>> Do you think the public should be concerned that neither you minister nor your department are able to answer fundamental questions about the budget?
>> Senator, I think the public will understand that the budget is produced and has been for some time. you your
government made an investment in the states and territories hospital system through the NH of 25 billion dollars and another2 billion dollars over 5 years in relation to the thriving kids program and you're telling me that we just have to wait for the budget. I'm sure and I asked the department I'm sure you have done some around the impact of this Mr. head um on the NDIS going forward.
>> Sorry, Senator. Yes, I we've clearly done some work. We have scenarios. That's a different thing to putting a published estimate out ahead of the budget. That's what I think what Minister McAllister is saying. Apologize. I had to step out the room for a moment, but that's that's not unusual for us to do scenario analysis, but not necessarily publish that or put it in
the public domain. You must have had an outcome that you were trying to achieve in relation to convincing the states to increase their um preparedness on funding growth, the the funding growth >> And you're sitting here today and neither the minister nor you can give us any indication at all as to what the budgetary impact of that very big decision. You know, you make funding announcements all the time before the budget. you're quite happy to make a funding announcement if it's, you know, going to go out there and buy a vote. So, I just don't understand why you can't make provide clarity here about a funding announcement in relation to the NH and thriving kids, but you won't give us any budgetary implications of those decisions. I mean, we know we spent $25 billion and $2 billion. What is the
>> Sorry. And I think as I described the primary motivation of that um agreement was to change the risk sharing arrangements between the comworth and the states. It wasn't necessary understand that >> well that that is the fundamental part of this which actually then potentially changes the trajectory >> on an ongoing basis. We are looking we and I mean this is obviously uh advised by the NDIA actuary and then goes through a budget estimates process. We continually update the view of what the forward trajectory of the scheme is which will have an implication for that risk sharing but we will publish that in the budget.
>> Okay. So quite frankly there's one of two things you either don't know the answer or you're not prepared to give it to me until the budget.
>> There's a third option Senator which is that we are following the ordinary conventions about how budgets are prepared. You could contemplate that as your third option. Well, I could
contemplate that apart from the fact that you're quite happy to make lots of budgetary announcements outside of the budget cycle, but apparently this isn't one of them. Um, in his press release, the prime minister indicated that Thriving Kids was the first phase of foundational supports, and I think you might have mentioned that in your opening statement, Minister. What additional phases are forthcoming in relation to financial supports and um foundational supports and when will they
Um well, I'll make the the first comment, then Ms. Wood and um Mr. Mansfield may want to comment. Way back in December 2023, the Nack CAB agreement at that time um foreshadowed that there would be in fact $10 billion of foundational supports over the 5-year period of the agreement. Mhm. >> 4 billion was the initial component um for what has now become known as thriving kids. >> The 6 billion is the balance. >> Um there has been no uh final decision on what the allocation allocation of those funds are. >> Um there is a lot of discussion both at Commonwealth and Comwalth State level that there would be potentially significant needs with respect to psychosocial supports. Um but the design of those has not been undertaken at this point in time and in the negotiations it was um viewed that the priority was to stand up thriving kids uh because of particularly because of the intersection with the access changes. I don't know if Miss Wood or Mr. Mansfield want to say anything more at this stage.
>> Senator Senator Luke Mansfield um first assistant secretary thriving kids task force. The only other thing that I'll add uh Senator is as part of the agreements that have been reached between the Commonwealth and states, it does establish um both that that 10 billion commitment remains and also establishes the process by which there would be engagement between the Commonwealth and states in relation to the remaining 6 billion.
>> So what is the time frame that the five that the 10 billion s that that it's been allocated through? So it's 10 billion. What what is the 5-year window
>> till 30 June 2031?
>> 2031. So it's 26 to 31. >> Okay. Thank you. So we've got the announcement now. So but no undertaking at all as to when we're likely to find out what the other six billion is. So how's it been
I think that's a question that would need to be directed to the Department of
>> Isn't this in your agency?
>> So,
>> so it hasn't been allocated. So, it's a $10 billion announcement of which now two billion. >> So, it's two the 10 billion announcement is that a joint10 billion dollars between the states and terrorists. So, so five and five. So, so 2 billion has has been >> drawn down into your budget papers as the NDIA and the other 3 billion still remains in some sort of contingency reserve in Treasury. Is that what you're
>> Well, the first instance, the 2 billion is not drawn down to the NDIA. The NDIA >> 1.4 billion will go to the states and 600 million will be retained by the COML, but they're not intended to be programs that are run out of the NDIA.
>> fine. Okay, that makes sense. Yep. Okay. Um what was the basis of why um the the change in the um the contribution from the states the the 4% to the 8% doesn't come into effect till 2028, but the agreement starts, I'm assuming, in the
I mean look broad broad broad broadly senator that was a negotiated agreement um to just provide um a longer period before the states commenced making that 8% contribution.
>> Okay.
>> And to get and to be honest to also you know that in the conversations it was to provide an additional couple of years to increase the likelihood of getting the growth rate below that 8%.
>> We're very generous to the states aren't
we? Well, you might say that, Senator. >> I'm happy for you to say that quite often. >> I I couldn't possibly comment.
>> No. Yes. I'm not asking you for opinion. That would be inappropriate.
>> That would be inappropriate.