Federal budget 2023: $500m saving on NDIS costs
The Albanese government is projecting a $500m cut in spending amid the state-federal agreement to target an 8pc growth target.
NDIS cost projections show a plunge of about $500m through to 2026, according to Tuesday’s budget after Anthony Albanese’s deal with the states to flatten the scheme’s growth rate, but the government hasn’t identified any immediate big-ticket measures to curb spending.
Jim Chalmers on Tuesday said the government would look to “moderate the growth in costs” of the $35bn NDIS along with its state and territory co-funders – with the current plan to limit growth from 14 per cent to 8 per cent – but the Treasurer backed it over the long haul.
“The NDIS continues to provide life-changing outcomes for future generations of Australians with disability,” Dr Chalmers said in his budget speech.
“Under Labor, the NDIS is here to stay. We are determined to make sure every dollar counts and every dollar goes to improving the lives of the participants the scheme was established for. Our changes are designed to put the interests of participants first, as we co-operate to moderate growth in costs.”
The NDIS will cost $35bn this financial year, growing to $56bn in 2026-27, making it one of the government’s biggest spending programs. But compared to Dr Chalmers’ first budget in October last year, cost projections for the years 2022-23 to 2025-26 have fallen by $470m.
The budget commits $733m over four years for a range of measures to improve the scheme’s effectiveness and help its almost 600,000 participants manage their plans. More than half of the new funding ($430m) was committed to build capability within the National Disability Insurance Agency.
Another $48m will be spent cracking down on fraud and non-compliant payments in the scheme, with recent examples of huge price mark-ups in products purchased for NDIS participants.
But there will be no major changes to the foundations of the NDIS, including eligibility requirements.
NDIS Minister Bill Shorten, who has commissioned an independent review of the scheme, including its sustainability, last month said the NDIS had “lost its way” and needed a “reboot”.
The budget notes the government, along with the states, had committed at the last National Cabinet to a new Financial Sustainability Framework and the new cost growth target. But it placated advocates’ fears by confirming it would continue to be demand-driven, and not capped.
“The framework will provide an annual growth target of total NDIS costs of no more than 8 per cent by 1 July 2026, with further moderation of growth as the scheme matures,” the budget notes.
It includes other new measures to support people with disability, including $142m to bolster the NDIS Quality and Safeguards Commission in its role to keep NDIS participants safe. And disability care workers will receive an extra $14m in leave grants.
Disability advocates argued National Cabinet was introducing a cap by stealth in agreeing to an 8 per cent cost growth target. Mr Shorten insists it is a target only.
The NDIS is funded jointly by the federal and state governments, but an agreement at the scheme’s commencement saw state funding increases capped.
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