03/05/2013 - 14:58

Drawing a line on disability

03/05/2013 - 14:58


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The heat of a faux election campaign is the wrong time to make major economic decisions such as that relating to the NDIS.

What is a disability? That might seem a heartless question if asked of a person severely injured in a traffic accident, or born disabled. But is it heartless to ask it of a person with a self-inflicted disability caused by excess smoking, drinking or drug taking, for example?

The point about probing the disability question is not to seek a medical definition of the word ‘disabled’, it is to ask whether Australia can afford a full-blown, no-fault, compensation scheme for anybody who has anything wrong with them.

Given the deteriorating state of all government budgets, state and federal, the answer has to be a resounding ‘no’. There simply is not enough money to satisfy the demands of people with significant disabilities who deserve help, and those with minor disabilities acquired over time.

My feet, for example, are a growing disability because they are flat. That was certainly not a problem in the late 1960s when they helped me fail a national service medical and saved me from getting killed in Vietnam.

Roll forward in time and my life-saving feet are becoming a disability; and while I doubt they’ll ever cause me to become wheelchair bound, they might; and then what?

Would I qualify for a disability pension because of impaired mobility caused by flat feet? One part of me hopes so. Another part says ‘don’t be silly’. Old, flat feet are part of the ageing process and have nothing whatsoever to do with a disability.

The problem of defining a disability has not yet reared its head. But it will because without a precise description of who and what is covered by the DisabilityCare system being crafted in Canberra, an economy-damaging monster might be created.

Such a situation would not emerge if the national disability insurance system was being designed by insurance specialists who know, down to the value of a finger or toe, what a genuine disability is worth because that’s how they structure conventional third-party insurance policies.

But in Canberra we have politicians conducting a bizarre form of auction politics in the heat of Australia’s longest-running election campaign, with both major parties trying to outdo each other in the bleeding hearts stakes.

Prime Minister Julia Gillard thought she was on a winner when trying to wedge opposition leader Tony Abbott by proposing to make DisabilityCare an election issue, one she could take to the September 14 poll saying she would introduce the new scheme whereas the heartless conservatives would not.

Mr Abbott’s reaction was to call Ms Gillard’s bluff and agree to have the scheme in place before the election – it was his way of neutralising what the prime minister saw as an advantage.

What no-one has asked as this political game is being played is how a potentially economy-changing National Disability Insurance Scheme can be designed in the few remaining sitting days of the current parliament.

Does anybody really believe that a 0.5 per cent increase in the Medicare levy will provide all the money required to fund DisabilityCare? If not, where will the money come from?

The heat of political battle is an appalling time to make major changes to the way a country structures its finances, which is what DisabilityCare could do if too much is promised by way of meeting the costs of everyone in the country with a disability.

That is the great risk with this latest piece of social welfare generosity. It sounds fabulous but who really pays, what is the full cost, and can the country afford it?

Now, having raised the responsible questions, I wonder what I can squeeze out of the insurance scheme for my flat feet?

Capital shift

AS welcome as generous dividend policies are for investors from companies such as Woodside Petroleum and Westpac Bank are, there is a nasty sting in their tail for Western Australia.

By paying out more to shareholders, those two companies, and others that might catch the bonus-dividend bug, are diverting cash away from expanding their operations in the name of rewarding their owners.

In the case of Woodside, the bonus payout and a promise to pay 80 per cent of future profits as dividends (until an operational expansion opportunity comes along) means that it is switching from a company driven by engineers who like building things into a business driven by financiers who like rewarding investors.

WA, with its huge resource base and hunger for development capital, has been Australia’s biggest beneficiary of the engineer phase of Woodside’s history.

Elsewhere, which is where most Woodside shareholders live, will be the beneficiary of the new financier phase.

As far as business theory goes, the bonus payments and increased dividends from Woodside, Westpac, and other big companies cannot be faulted. It’s the way the system should work, with the owners being rewarded when there is not a need for expansion capital and those same owners asked for capital when it is required.

But for WA, which relies heavily on capital expenditure on new projects, this business theory spells tougher times. This is already being reflected in job losses in the engineering and building trades, and a general slowdown in the state’s growth rate.

Elsewhere, where the owners of capital live, will now benefit from what’s been built here.



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