NDIS forecast to cost extra $8.8bn over estimates as Shorten announces independent review
The Albanese government has revealed the National Disability Insurance Scheme will cost an extra $8.8bn,as it brings forward an independent review into the scheme.
Ahead of next Tuesday’s budget, the minister for the NDIS, Bill Shorten, confirmed on Tuesday the scheme was now forecast to cost more than $50bn a year by 2025-26.
Shorten said the landmark NDIS was “arguably Australia’s best addition to the social framework of Australian society in the 21st century”. However, he said nine years of Coalition neglect had left it “not in the position which I think Australians would like to see it in”.
Shorten said the independent review, which was flagged ahead of the May election, would be spearheaded by Prof Bruce Bonyhady, a disability reformer and economist, and Lisa Paul, a former federal departmental head.
He said the first phase of the review, led by Bonyhardy, would examine the design, operation and sustainability of the NDIS. The second phase, led by Paul, would look at market issues and workforce.
Despite the escalating costs of the scheme, Shorten told reporters the review was “not about a razor gang and cost-cutting” and he said any reforms would be grounded in the principle of co-design with people of disability.
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He said the independent review was necessary because the scheme was increasing in cost while not delivering on the things participants needed. Shorten said the government was seeking to deliver a scheme that was sustainable and efficient while delivering for participants.
The review was expected to be handed to disability reform ministers by October 2023.
Ahead of delivering next week’s budget, the treasurer, Jim Chalmers, has repeatedly flagged growing expenditure as a significant pressure for the government to manage. Spending is growing in the NDIS, health and defence.
Escalating costs in the scheme have been an issue for some time. The Morrison government attempted to rein in
what it said were cost blowouts while anger grew over widespread complaints of arbitrary cuts to people’s funding packages.
In May 2021, Linda Reynolds, then the minister responsible, confirmed the Morrison government would top up funding for the program but warned there were “hard discussions” ahead regarding the sustainability of the current funding model.
At that time, Reynolds said: “We want this scheme to be enduring and sustainable for many generations to come, and it’s at the point now that we’ve got many more people coming on to the scheme than we ever thought, packages are more expensive, and costs are going up.”
Last month Shorten appointed a new chair of the National Disability Insurance Agency, Kurt Fearnley. Fearnley has said the scheme won’t succeed unless participants trust the organisation and “see themselves” in it.