$2.3m pay packet for NDIS numbers cruncher

The Weekend Australian - - FRONT PAGE - RICK MOR­TON SO­CIAL AF­FAIRS WRITER

The chief numbers woman in charge of the $22 bil­lion Na­tional Dis­abil­ity In­surance Scheme’s cost pro­jec­tions was given a $2.3 mil­lion five-year con­sult­ing con­tract last year af­ter orig­i­nally be­ing ap­pointed for a three-year term at the start of the project.

One-third of the Na­tional Dis­abil­ity In­surance Agency’s 3100 in­ter­nal staff are con­trac­tors, al­though this does not in­clude 2203 out­sourced lo­cal area co­or­di­na­tor po­si­tions, with out­side labour such a con­cern the agency sought ur­gent le­gal ad­vice last year.

The ad­vice, from the of­fice of the Aus­tralian Gov­ern­ment Solic­i­tor, warned that the agency could be break­ing fed­eral work­place laws by hir­ing con­trac­tors who are do­ing work “prop­erly char­ac­terised as an em­ployee who should be en­gaged un­der the Pub­lic Ser­vice Act”.

In just two years — cov­er­ing the last and cur­rent fi­nan­cial year — the NDIA has spent, and in­tends to spend, more than $300m on con­trac­tors and con­sul­tants.

Scheme ac­tu­ary Sarah John­son was initially ap­pointed by the agency’s board to the role for three years in Novem­ber 2013, lead­ing the ac­tu­ar­ial team es­sen- tially from the start of the pro­gram’s launch.

Ms John­son was, and con­tin­ues to be, listed as an ex­ec­u­tive of the agency re­port­ing di­rectly to the chief ex­ec­u­tive, now Rob De Luca. How­ever, her role was con­verted to a higher-value con­sul­tancy from Feb­ru­ary 2 last year un­til De­cem­ber 2021.

The agency has set aside $2.3m for Sarah Con­sult­ing Pty Ltd — of which Ms John­son is the sole di­rec­tor — and paid out al­most $223,000 for five months’ work to the end of the 2016-17 fi­nan­cial year.

The con­tract is worth about $460,000 a year, and Ms John­son lives in Syd­ney’s in­ner-city Potts Point, de­spite the agency be­ing head­quar­tered in Gee­long.

Ms John­son’s com­pany is noted in the dis­claimer of the agency’s 2017 an­nual re­port as re­ceiv­ing con­sul­tancy money, but in pre­vi­ous an­nual re­ports she was listed as an ex­ec­u­tive.

The agency says it paid the com­pany $368,182 in the 2015-16 fi­nan­cial year.

Ms John­son leads a team of ac­tu­ar­ies, some of whom are also con­trac­tors, and The Week­end Aus­tralian un­der­stands she com­mands a large fi­nan­cial del­e­ga­tion within the agency, in­clud­ing en­ter­ing into fur­ther con­tracts for staff.

The NDIA has al­lo­cated $6.64m in con­sult­ing con­tracts for ac­tu­ar­ial ser­vices, in­clud­ing Ms John­son’s, which largely cover a pe­riod from 2016 to 2019.

The agency re­ceived ur­gent le­gal ad­vice last June and July that warned it could be in breach of the Fair Work Act and pub­lic ser­vice codes if it hired con­sul­tants or con­trac­tors to do the work of full-time em­ploy­ees.

“If the agency pur­ports to en­gage an in­di­vid­ual as an in­de­pen­dent con­trac­tor who is, as a mat­ter of law, prop­erly char­ac­terised as an em­ployee who should be en­gaged un­der the Pub­lic Ser­vice Act, this may con­sti­tute a breach of … the Fair Work Act,” Aus­tralian Gov­ern­ment Solic­i­tor se­nior gen­eral coun­sel Mark Mol­loy wrote.

“Fur­ther­more, in our view, if the agency head (or del­e­gate) pur­ports to en­gage in­de­pen­dent con­trac­tors who are not ‘con­sul­tants’, this may con­sti­tute a breach of the APS code of con­duct which, among other things, re­quires com­pli­ance with Aus­tralian laws, in­clud­ing the NDIS Act.”

Key pub­lic ser­vice staff de­clined to trans­fer when the NDIA first moved head­quar­ters from Can­berra to Gee­long.

In 2016, all four of the agency’s deputy chief ex­ec­u­tives left, and the po­si­tions are still be­ing held by tem­po­rary or act­ing staff. An ex­tra two top-tier po­si­tions that re­port di­rectly to the chief ex­ec­u­tive are also held by act­ing em­ploy­ees.

Ms John­son was awarded ac­tu­ary of the year in 2016 by the Ac­tu­ar­ies In­sti­tute, and thanked her men­tor John Walsh, who was a key fig­ures in de­tail­ing what a na­tional dis­abil­ity in­surance scheme might look like be­fore the Pro­duc­tiv­ity Com­mis­sion be­came in­volved.

Mr Walsh, then a part­ner at ac­count­ing firm Price water­house Coop­ers, worked with Ms John­son, who was also em­ployed by PwC when they jointly ad­vo­cated a model for the NDIS based on the ill-fated New Zealand Ac­ci­dent Com­pen­sa­tion Cor­po­ra­tion.

Mr Walsh was an as­so­ciate com­mis­sioner of the Pro­duc­tiv­ity Com­mis­sion when it re­leased its re­port into the de­sign of the NDIS.

Shortly be­fore he re­tired from PwC, he was ap­pointed to the board of the NDIA, where he re­mains. He ab­stained on the vote to ap­point Ms John­son as scheme ac­tu­ary.

“Em­ploy­ment con­tracts for in­di­vid­u­als em­ployed by the NDIA are sub­ject to per­son­nelin-con­fi­dence ar­range­ments.

“As such, the NDIA will not be pro­vid­ing spe­cific de­tails of in­di­vid­ual em­ploy­ment ar­range­ments other than what is pub­licly avail­able,” a spokes­woman for the agency said.

John­son

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