The controversial NDIS is expected to cost Australian taxpayers $109 million a day this year – with fears it could get worse unless decisive action is taken.
The cost of the scheme has increased by $13.1 billion over the past year and is expected to cost the federal and state governments an eye-watering $39.8 billion in 2023-2024.
The shocking numbers mean that National Disability Insurance is now the fastest growing expense for the Treasury, overtaking the massive interest bill.
It is also predicted to exceed the cost of Medicare in 2025/26.
Tuesday’s budget promised several measures to try to contain the rising costs of NDIS, including a crackdown on fraud and bureaucracy.
However, critics pointed out that the budget made no changes to the foundations of the NDIS, including eligibility requirements.
Prime Minister Anthony Albanese admitted last month that the plan was “unsustainable”.
NDIS is now the fastest growing expense for the Treasury, surpassing the huge interest bill
Anthony Albanese admitted last month that the scheme was ‘unsustainable’ and the new figures support the prime minister’s assessment
About $4.7 billion of the $13.1 billion increase in expected costs has happened since Labor’s first budget last October.
The other $8.4 billion came in the five months following the coalition’s final budget on March 29, 2022.
It means Australians have seen the expected cost of the NDIS rise by a shocking $32 million a day since last March.
This will continue for the next decade, with NDIS expected to grow at 10.4 percent unless action is taken to reduce costs.
On current track, the cost of the NDIS will be $41.9 billion next fiscal year and reach $55.9 billion in 2026-2027.
Last month, the government put an eight percent cap on the scheme’s annual growth in a bid to cut costs.
To meet the goal, Mr. Albanese’s government will spend $733 million on eight measures to improve decision-making at the NDIA, the agency that manages the program.
Those measures include an increase in NDIA staff, long-term plans for recipients, eliminating overcharged service providers, and a crackdown on fraud and non-compliance.
In its most recent annual financial sustainability report, the NDIA said the increase in the cost of the scheme is due to several factors.
These include a higher than expected number of participants in the scheme, an increase in the minimum wage this year and rising inflation.
About 585,500 people are NDIS participants, including 10 percent of boys between the ages of five and seven. About 6,000 new participants join each month.
The government’s review of the NDIS is expected to deliver its findings in October.
The CEO of one of Australia’s largest disability service providers said this month that the limit is necessary to maintain trust in taxpayers.
On current track, NDIS costs will be $41.9 billion next fiscal year and reach $55.9 billion in 2026-27
“An eight per cent growth cap guarantees the future of the scheme, both for people with disabilities and for the taxpayer who knows that costs will be contained,” ARUMA’s Martin Laverty told AAP.
Dr. Laverty said the sustainability of the scheme was under pressure with the 410,000 participants predicted as the scheme started to grow to 600,000.
He said it would be challenging to keep costs within limits, but it could be achieved through an honest conversation about who the NDIS is for, what services it covers, how costs are shared and reducing administrative burdens .
“Every person in the NDIS has a bureaucratic headache trying to access the support they need,” he said.
‘Eliminating the red tape not only saves costs, but also makes life easier for people with a disability.’
Kurt Fearnley, president of the National Disability Insurance Agency, pledged to keep vulnerable people at the center of the disability program despite the financial strain on the scheme.
“So many people with disabilities hear the word ‘pet’ and shudder. I shiver,” he told ABC radio.
“We are a demand-driven scheme. The goal is a bit of a challenge.’
The scheme was discussed by state and territory leaders in the national cabinet as governments work to make the scheme more financially sustainable.
The Commonwealth will fund the bulk of the scheme rather than it being a 50-50 split with the states.
South Australian Prime Minister Peter Malinauskas said states were unable to fund half of the massive cost of the scheme as they battled health care spending.