NDIS costs on course to top $100b, eclipse age pension

Asked on Wednesday about the program’s rapidly increasing cost, Mr Albanese said there was a “substantial amount of waste in the NDIS”.

”I think it has enormous support. But we need to make sure that it’s sustainable in the future,” he told ABC radio.

The federal government will contribute $24.1 billion to the costs of running the NDIS this year and the states will tip in the remainder.

The budget papers project the federal government’s contribution to the cost of the NDIS will grow by 13.8 per cent a year over the next decade, while state contributions are now fixed at 4 per cent.

The Financial Review projected on Tuesday the annual running cost of the NDIS would hit $102 billion in 2033 based on information disclosed in the budget papers.

It is understood Treasury expects the scheme to cost $97 billion in June 2033, at which point the federal government would be on the hook for a more than $80 billion yearly contribution.

Deloitte Access Economics partner Pradeep Philip said the growth in the scheme owed partly to an increase in the scope of the disabilities it covers.

“It was always expected to grow at a more of an exponential rate in its early years,” Mr Philip said. “The question is, will that stabilise? Right now, a lot of the projections seem to suggest that it’s not going to stabilise, and so the risk of that means there are questions about whether it’s sustainable in the budget.”

Mr Philip said discussion of the scheme’s costs should also recognise it has benefits in the form of improved quality of life for people with a disability and greater independence.

Mr Albanese said he would engage with state and territory leaders about the scheme’s operation.

Under the current arrangements, the federal government bears the burden of any cost blowouts.

Mr Albanese said discussions were not necessarily about getting the states to pay more.

“What it’s about is making sure that we have appropriate management of the system to secure the best outcomes whilst making sure that it’s financially sustainable into the future,” he said.

“We want to make sure that Australians with disabilities get the support that they need because that will actually add to the economy. The full participation of people with disabilities in our economy and in our society is not only good for them, it is good for all of us.”

Disability Minister Bill Shorten last week brought forward a 12-month review into the NDIS’ operation, sustainability and responsiveness to participant needs.

Mr Shorten said the review was not about cost-cutting and would focus on improving the scheme. The manner in which the cost of the scheme is split between the states and the federal government will also be considered.

The review will be co-chaired by Melbourne Disability Institute chairman Bruce Bonyhady and former senior public servant Lisa Paul.

Finance Minister Katy Gallagher said on Wednesday the NDIS was growing faster than anyone thought.

“We need an answer on that. And that work is … underway,” she said.

As concerns grow over the number of people defrauding the scheme, the federal government pledged $126 million in Tuesday’s budget to establish a cross-agency taskforce to tackle fraud and serious non-compliance with the program.

Australian Criminal Intelligence Commission chief executive Michael Phelan warned in August as much as $6 billion of the scheme’s annual budget could be subject to fraud.

Opposition leader Peter Dutton said on Wednesday if the government had a plan to make the NDIS sustainable, they would have put it forward in the budget.

“We want to provide support to people who are most in need, and we want to make sure that the NDIS is sustainable because it’s an important piece of social infrastructure, but taxpayers need to be able to afford it,” he said.