Complementary Submission – Decision-Making, Psychosocial Risk & System Sustainability

Submission to the Joint Committee of Public Accounts and Audit

Author: Terence (Terry) Mahoney

1. Scope of This Submission

This submission complements governance and performance evidence by examining how financial sustainability measures are operationalised at plan level, the structure and lawfulness of decision-making architecture, psychosocial and episodic disability as a structural pressure point, and how administrative design interacts with real-world support ecosystems.

I write as an accredited Psychosocial Recovery Coach working directly with families experiencing complex psychosocial disability, and as a former corporate director and strategic consultant in large-scale operational systems. This dual perspective informs the observations below regarding how administrative structures interact with disability support ecosystems and long-term public cost.

2. Sustainability Measures at the Decision Level

Administrative cost growth and performance pressures coincide with expanded mechanisms allowing funding variation or reduction, reliance on utilisation patterns, and tighter administrative interpretation of “reasonable and necessary”. This indicates sustainability pressure is increasingly addressed through participant-level funding interpretation rather than solely internal efficiency reform.

Page 2: Source-Release Document

3. Decision-Making Architecture and Legal Risk

Where frameworks restrict meaningful consideration of clinical evidence or limit planner discretion, risks arise of fettered discretion, legal unreasonableness, and failure to conduct individualised assessment. Sustainability achieved through decisions later found unlawful does not represent sustainable administration.

4. Psychosocial and Episodic Disability as a Structural Pressure Point

Psychosocial disability is dynamic, stress-sensitive, and dependent on continuity. Episodic or cyclical conditions may be misread as “low utilisation” or “improvement” when stability depends on coordinated support. These cohorts face disproportionate funding contraction risk despite representing high downstream cost risk if stability is lost.

5. System Consequence of Disrupted Support Ecosystems

Participants often require years to establish therapeutic alliances, regulation skills, coordinated teams, school participation, and family stability. Funding disruption can result in deterioration, loss of therapeutic continuity, behavioural escalation, family burnout, and re-entry into crisis systems. These represent system reversals that undo prior public investment.

6. Family Sustainability

Legislative requirements include consideration of informal support sustainability. Excessive carer burden risks burnout, family breakdown, and increased reliance on crisis systems, undermining Scheme sustainability.

7. Fragmented Coordination

Administrative designs that fragment coordination can increase duplication, reduce consistency, delay responses, and reduce effectiveness. Fragmentation increases system risk and cost.

8. Measurement Gaps

Administrative performance measures often exclude recovery continuity, relapse prevention, avoided hospitalisation, and preservation of informal supports, risking misinterpretation of system success.

Page 3

9. Market and Compliance Interaction

Compliance pressure within financially fragile psychosocial service markets risks withdrawal of specialised providers, reduced early intervention, and increased crisis cost.

9A. Regulatory Capability Context

The Committee may also wish to consider the NDIS Quality and Safeguards Commission’s submission regarding its response to the Australian National Audit Office assessment. That material indicates that key elements of the Commission’s risk-based regulatory architecture — including intelligence integration, market monitoring capability, compliance prioritisation frameworks and data quality uplift — are still in development or staged implementation over the next two years. While these reforms are constructive, they indicate that core regulatory risk-detection and market oversight systems are currently in transition. During such a period, increased compliance activity and funding constraint mechanisms intersect with provider market fragility — particularly in psychosocial and specialist services — creating a heightened risk environment before full regulatory capability is embedded. This context is relevant when considering the interaction between enforcement settings, provider sustainability, and downstream service system stability.

10. Public Accounts Relevance

These issues concern preservation of public investment, avoidance of relapse cycles, sustainability of informal care systems, and cost transfer across systems.

11. Recommendations

Examine efficiency vs funding contraction, decision-support lawfulness, psychosocial funding patterns, compliance and provider exit interaction, tribunal reversal trends, cross-system cost transfer, and whether performance reporting reflects participant stability.

12. Closing Statement

Financial sustainability cannot be achieved through decision-making practices that destabilise recovery ecosystems and family supports. This submission is provided to assist understanding of how administrative structures translate into system outcomes and long-term public cost.

29th January 2026