Money

by | Nov 13, 2023 | Disability Community, Government, NDIS

It’s easy to work out what the biggest issue in disability is going to be over the coming year. Money.

Photo source: Alex Norton

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Back in 2013, when (then Senator) Mitch Fifield was coalition spokesperson for the NDIS, I remember asking him how he’d manage to fund the scheme. He looked me straight in the eye. “All the advice we’ve received says the scheme is affordable. We must assume that advice is correct and there will be no unforeseen blow-out.” 

A decade later it’s hard to remember just how sanguine everyone was. Julia Gillard insisted there’d be no need for any Medicare-type levy to fund the scheme. 

Today things are very different. 

Projected costs have more than doubled (from under $20 billion to more than $40 bn), the nation’s economy is under pressure, and government expenditure (on all measures) has blown out dramatically since the free-spending days of the pandemic stimulus. Government spending (excluding infrastructure) has blown out from 20 percent of GDP in 2019 to more than 23 percent today. 

That’s an extra $75 billion the government is spending at the same time as it’s promising to implement the stage three tax cuts and flagging big boosts for defence and infrastructure. 

So far this has been sustained by windfall terms of trade but the tensions in the economy are already dragging it to breaking point. Just look at what the Reserve Bank’s doing. 

Interest rate increases are designed to take the heat out of the economy by reducing demand. Meanwhile, Treasurer Jim Chalmers is pushing more and more money into the furnace, keeping it burning hot and reassuring borrowers the cycle is coming to a natural conclusion. This simply increases pressure on the Bank to hike again – particularly as interest rates in almost all other major economies remain higher than our own. 

Treasury forecasts government spending will remain above 26 percent of GDP until at least 2027. Economic hawks (including many in government) want to see it reduced to 23 percent, a similar reduction to that achieved by Paul Keating in the early ‘90’s. The ‘baked-in’ structural nature of spending on items like the NDIS make this impossible in many areas without decisions to slash services. 

Something has to give. 

On Monday a story in the Financial Review linked Australia’s high autism diagnosis rates (amongst the highest in the world) to the availability of NDIS funding. When stories like this appear in respectable newspapers, it isn’t long before the political class starts listening. 

The NDIS Review Team’s findings won’t be released until some time after the next National Cabinet meeting. Analysts say this is, in itself, a give-away that changes are coming. 

National Cabinet involves the states as well as the Commonwealth. The implication is that Canberra will be attempting to shift some of the responsibility for specific conditions back on other level of government.