"I think disability employers serve an important function," Mr Shorten told the Herald/Age ahead of announcing the inquiry today. "But frankly some are held together by sticky tape and band aids."
"They need to get people onto their boards who have accountancy skills and marketing skills - it is no longer enough for these operations just to be run by people who care, they have to be run by people who care and can count."
The 206 companies supported to employ 19,000 disabled Australians were shocked to discover on budget night that their government funding had been frozen after years of getting what amounted to annual increases of around 3 per cent.
"We had already had a rough time through the economic downturn, but it was a shock to find nothing in the budget to reflect cost increases," said Ken Baker, chief executive of the umbrella organisation Australian Disability Enterprises.
"To his credit Bill Shorten has listened and responded and come up with 2.4 per cent. There's some way to go, but this will help members that were on the edge."
Mr Shorten said the apaprent funding freeze flowed from an earlier decision of the Howard government to provide a temporary funding boost that was not included in budget forward estimates.
"But whatever the reason, you've still got to solve the problem," he told the Age.
"The trick in negotiations is to move them from a single issue to multiple issues, so I have found more money but I've also found a way to keep their costs down by freeing them from the need to do quarterly worker assessments for a trial period of a year."
Combined the two measures should boost the financial position of disability employers by around 3.5 per cent.
Mr Shorten praised the work of organisations such as Endeavour in NSW and Queensland which makes furniture, runs farms and packs food and Waverley in Victoria which mows lawns, manufactures equipment and provides corporate catering.
But he said some of the smaller organisations should merge.
"Some should remain but if we want to get beyond hand-to-mouth funding we have got to encourage them to promote their existence and their value."
"It will not be a shakeup as such. I don't want to make people nervous - no disabled worker will be displaced. But if we are funding 19,000 people with special needs we need to do it well."
""We need to look at whether $10,000 per disabled worker enough."
With Finance Minister Lindsay Tanner Mr Shorten had already government tender guidelines so departments could allocate contracts to disability employers without the need to seek competing bids.
The inquiry will be conducted by staff of Mr Shorten's department and will seek public submissions.
Mr Baker welcomed the inquiry saying if the enterprises folded or did not work well 20,000 Australians with quite severe disabilities would find themselves sitting at home.
Published in today's Age
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