Budget 2022: NDIS cost increases running at 14 per cent a year for a decade

The cost of the NDIS is starting to dwarf that of Medicare and aged care.

The Albanese government recommitted to both the intent of the NDIS and to its future funding, which will total $166.6bn over the next four years.

The National Disability Insurance Scheme is projected to grow by ­almost 14 per cent a year for the next decade, more than double the rate of other big government spending programs, including ­defence, aged care and medical benefits.

Within four years, the NDIS will be costing the taxpayer $51.8bn as both the number of participants and the average cost per participant continue to rise faster than anticipated, the budget ­reveals. By comparison, the costs of Medicare will be $35.8bn in 2025-26, and aged care $24.7bn.

The Albanese government recommitted to both the intent of the NDIS and to its future funding, which will total $166.6bn over the next four years, $8.8bn more than anticipated in the Coalition’s ­budget in March.

“We choose dignity for Australians with disability,” Treasurer Jim Chalmers said in his budget speech. “This budget begins the task of repairing the NDIS and ­securing its future.” That future will be increasingly costly beyond the forward estimates.

Only interest payments on net debt, at 14.4 per cent, is predicted to rise faster than the NDIS’s 13.8 per cent through to 2032-33. By comparison, spending on aged care is projected to rise by 6.2 per cent, ­defence by 5.6 per cent and medical benefits by 5.4 per cent. “The ­increase in (NDIS) costs reflects the sustained growth in participants and average support costs per participant,” the budget says.

The NDIS provides those with a permanent and significant disability financial support to build capacity, increase independence and establish stronger connections with their community.

There were 555,000 people on the NDIS at the end of September, a number projected to rise to 830,000 by 2030. A 2017 Productivity Commission report projected participant numbers at just over 580,000 in 2030.

The higher costs of the scheme across the next decade are set to have a significant impact on Australia’s economy, with the budget forecasting it will increase gross debt by 3.3 percentage points of GDP in 2032-33. In the shorter term, the government focused its new budget spending on fighting fraud and smoothing the ­unwieldy system for people with disability and their loved ones.

NDIS Minister Bill Shorten said a new fraud task force, to cost $137.7m, would “help defend the scheme from crooks and help ­deliver our pledge to crack down on NDIS fraudsters”.

The government will also ­invest $158.2m for an extra 380 permanent staff for the National Disability Insurance Agency that runs the scheme to improve the experience for people with disability and their families looking to ­access NDIS funding.

Mr Shorten also pointed to his recently announced independent review, tasked with rebuilding community trust and ensuring the scheme’s sustainability, as evidence the government was delivering on its election commitments on the NDIS. And he reiterated his focus on getting people on the NDIS out of hospitals.

“We have already worked with states and territories to improve NDIA administrative processes to ensure that people with disability do not languish in hospital ­unnecessarily,” he said.

National Disability Services chief executive Laurie Leigh said the focus on the scheme’s expenditure should be measured against the “life-changing and lifesaving” benefits it provided to hundreds of thousands of people.

The federal budget also provided $5.3m over the next two years to support people with autism, including $2m for the Autism Cooperative Research Centre and $1m for the development of a National Autism Strategy.