The NDIS spending to increase to 100s of billions of dollars: Fact Check

A great deal was said last night regarding the increasing cost of the NDIS and as quoted by Laura Tingle in the post budget analysis question to the Treasurer Jim Chalmers that NDIS spending will rise to “Hundreds of Billions of Dollars”. But is that a true reflection of what is in the budget papers?

What we have is a conflating of all disability related spending and not just the NDIS. In looking at the projected increases in the NDIS from the actual figure of 2021/22 from the $29bn in 2021/22 to $51bn in 2025/26. By way of commentary very little has been provided in the budget papers that outline the detail of how and why this is likely to occur outside of “This is closely followed by NDIS that increases on average by 13.8 per cent per year” (BP1, p. 86) due to “The increase in costs reflects the sustained growth in participants and average support costs per participant” (BP1, p. 91).

Part of the reason for increased costs was a review of the Social, Community, Home Care and Disability Services Industry Award by the Fair Work Commission that now requires a minimum of 2 hours a shift up from one hour that flows through into every NDIS participant support package.

As Table 6.9.2 summarises the trends in the major components of assistance for people with disability the actual figure of all disability spending including NDIS + NDIS quality and safeguards + financial/pension support + financial support to carers + national partnership payments rise from $61bn in 2021/22 to $88bn in 2025/26. Whereas aged care in the same period goes from $76bn-$102bn.

These figures also don’t take into account actual underspending in the NDIS allocation that in 2018/19 had a $4.6bn underspend. The revised growth in estimated NDIS costs is in line with the Scheme Actuary’s most recent projections as reviewed by the Australian Government Actuary. The figures do include a new measure in BP2 for additional funding operational funding for the NDIA ($385m in 2023-24 see BP2, p.199) to address staffing for clearing the backlog of appeals and other operational matters.

With regards to the government approach, Minister Bill Shorten has already appointed an NDIS Review Team as well is making significant new appointments with disability expertise and knowledge to the NDIS Board. As Treasurer Jim Chalmers also notes, this budget is the first of a series of budgets over the coming years that will start to address some significant issues including that the NDIS was never to be a program for all people with disability but those who are regarded as having, in World Health Organisation language, severe or profound disabilities, which equates to approximately 10% of the 4 million people who identify as having a disability in Australia.

Other programs and funding were to be made available to other Australians with lower levels of disability to access within their community yet these second and third tier programs that make up disability support in Australia have not been as forthcoming as was hoped by the federal government.

On the allocation of funds towards the promotion of electric vehicles and infrastructure: 

Making vehicles cheaper will broaden the base of potential customers. Further funds to roll out more public chargers is an essential element in enabling more Australians to have confidence that they can charge their car near where they live and work, and importantly when they go on long trips further than their vehicle's range. Ensuring there is a comprehensive network of chargers on our major transport routes that is accessible to all is the number one priority to help Australia transition to net zero emissions road transport by 2050. 

The government will need to ensure government departments and businesses can transition their fleets as soon as possible to quickly increase the size of the second hand market. 

More work will need to be done to guarantee supply of electric vehicles by implementing a mandatory vehicle fuel emissions standard to the same standards as Europe otherwise our market will be ignored. This measure will help encourage manufacturers to import a broader range of models that will suit more niches of the market and speed up the desirability of EVs. 

The investment made by the government today is a good step in the right direction helping to turn around the growth in transport emissions. 

The Treasurer signposted this budget well, and it has delivered what he said it would. The government made a range of cuts to demonstrate fiscal responsibility, and prioritised their new spending around existing election promises.  In education, most of the new investment was announced prior to budget night.  $485m was confirmed to create 20,000 new university places for students from disadvantaged backgrounds, and the 480,000 fee-free TAFE and vocational education places are now funded in the forward estimates, with state funding agreements underway to deliver the first tranche of places in 2023.  

Election commitments in relation to school funding were also met, with more than $770 million delivered for a number of programs, including a Schools Upgrade Fund (worth $270m) and over $200 million to support the ‘Student Well-being boost’ – funding for schools to improve student mental health and wellbeing. The High Achieving Teachers Program will receive additional funding for bursaries to encourage new teachers to the profession. 

The budget committed to a Treasury process to develop indicators that better ‘measure what matters’.  The inclusion of ‘well-being’ indicators such as measures of educational outcomes, access to healthcare and environmental quality, will help future budgets be judged not just on their ability to curb inflation and improve GDP, but on their capacity to deliver improved outcomes for the community. 

On climate change and energy this budget makes useful commitments. The new expenditure items are not large, especially in comparison with the United States and Europe where many billions are flowing to support zero-emissions industries. But there is sound budgetary support for many underpinnings of future action, including for energy infrastructure, and importantly for institutions and initiatives that help guide climate policy and energy transition.

There is money for a national energy transformation partnership, for the Climate Change Authority to do its job better, and for international climate partnerships and better engagement with the UN. The main effects on emissions will come from policy that is budget neutral, first and foremost the Safeguard Mechanism which will be geared to bring an emissions price signal to Australia’s industry sector without raising revenue nor subsidies.

In future budgets, the question will be whether there aren’t opportunities for the federal government to provide on-budget support for stronger climate policy – and why Australia is not using carbon pricing to bring in revenue to pay for it.

The Australian Academy of Science welcomes the release of the Australian Government’s 2022-23 budget. 

The Academy will lead a new regional presence coordinating scientific engagement in the Asia-Pacific over the next six years thanks to a $10.3 million investment from the Australian Government. 

The Australian Government’s investment will enable Australia to leverage its standing as a science and research leader and engage in strategic science diplomacy in our region and globally. 

The Government has also made several other significant investments that rely upon science to advance Australian economic and social prosperity.  

These include:  

• The establishment of the $15 billion National Reconstruction Fund with seven key priorities in renewables and low emissions, medical science, value-adding resources, enabling capabilities, transport, defence and agriculture, fisheries, food and fibre. 
• Confirmation of the Government’s intention to establish an Australian Centre for Disease Control. 
• $105.2 million to support First Nations people to respond to climate change in their communities. The Academy’s Future Earth Australia National Strategy for Just Adaptation, published last month, called for the development of a national Indigenous-led climate change mitigation and adaptation strategy.  
• Renewal of Australia’s climate policy ambition through greater investment in the Climate Change Authority, the Australian Renewable Energy Agency, net zero and negative emissions, and major investments in Australia’s renewable energy systems. 
• $2.9 million for the National Science and Technology Council’s provision of science and technology advice to support evidence-informed decision-making and independent science advice to Government 
• A down payment on meeting Australia’s responsibility to protect our natural biodiversity including support for preventing species extinction, protecting the Great Barrier Reef and advancing environmental law reform 
• 20,000 new university places for under-represented students, the Startup Year Program and establishing the Australian Universities Accord 
• $5.8 million for the Women in STEM and Entrepreneurship program and the independent review into Government programs to ensure they support greater diversity in Australia’s science and technology sectors 
• $10 million for Questacon to help inspire the next generation of young people to consider STEM careers 

Australians look to science to provide the knowledge, solutions, and advice to guide us through the challenges of our uncertain world.  A world now more frequently experiencing climate induced natural disasters and the threat of pandemics. 

We recognise a lot of work is in train to revitalise the scientific enterprise and reverse the fourteen-year decline in investment in research and development. It will take time, but it can be done.  

We look forward to working with the Australian Government to map a pathway that repositions Australian science to advance national prosperity and global competitiveness.

As a feminist planner, I was thrilled to see many gender issues and gaps targeted in the budget for women. I only wish there was a more explicit recognition of the fact that so many of the difficulties facing women are due to poor urban planning. Housing gaps are definitely a problem but so is transport. Our urban transport systems do not prioritise women’s needs.

Public transport is designed along inflexible trunk lines and schedules that cannot meet the complex travel needs of working mothers who run myriad errands throughout the day. Tall kerbs, missing sidewalks, poorly lit alleys, and short timespans of pedestrian signals are common. And the gender gap in cycling is staggering. A transport system that works well for women would work better for all.

This Budget represents a sensible first step in addressing climate change, but with only seven years to 2030 and the need to reduce our emissions by at least 43%, its time to make every dollar count. We don’t have any more time to lose.

One immediate action would be ensuring wider outcomes and whole-of-life carbon are considered at the business case stage, a step made easier by the inclusion of national targets in the Infrastructure Australia Act in September.

The budget contains welcome steps to future-proof Australian science and technology skills and jobs, and leverage greater diversity of talent and perspectives, which is essential to address urgent challenges. The Academy is also pleased to see funding to establish a National Electric Vehicle Charging Network which is crucial to support the energy transition.

The Academy welcomes the $5.8 million for supporting women in STEM careers, including through the Women in STEM Entrepreneurship Grants (WISE), and looks forward to supporting the Government’s women in STEM program review. 

The additional $10 million for Questacon’s education and outreach work will also help make STEM more accessible to kids across the nation, particularly in regional and remote locations.

On 20,000 new university places in critical skill shortage areas: While this is a step in the right direction, large-scale action is needed to deliver the tens of thousands of engineers that will be needed to fulfil the Government’s ambitious and necessary decarbonisation and manufacturing agendas.

In strapped budget times, science is the most important strategic investment a nation can make. It’s good to see the continuation of support for research commercialisation along with modest but important new investments in strategic science capabilities for Australia’s economy.

The announcements in this budget deepen investment in Australian science and technology expertise. They will position us to seize opportunities to build capabilities  - including clean energy technology - that will be transformative to the complexity of the Australian economy.

The strong support for equity in STEM will create opportunities to tap into the full talent pool in this country.

We’re delighted to see further investment in inspiring the next generation of young Australians to see themselves in a future powered by science.

The next task will be to map out a plan to deepen investment in discovery science to make the next wave of big and bold breakthroughs to secure Australia’s future prosperity.

The maximum cost of PBS general scripts is to fall for the first time in 75 years. The PBS general co-payment will be lowered to $30 a script, down from $42.50. This is great news for the thousands of families who cannot afford essential medication.  The Government is also providing an additional $1.4 billion for new and amended listings on the PBS and other medicines programs. This will allow greater access to affordable and life-saving essential medicines and includes treatments for various types of cancer and growth hormone deficiency in children. 

The Government will provide $235 million over 4 years from 2022–23 to commence the roll-out of 50 Urgent Care Clinics. This includes $100 million over 2 years from 2022–23 to co-develop and pilot innovative models with states and territories to improve care pathways and inform program roll-out. Urgent Care Clinics bulk bill and are open extended hours, 7 days a week. They are designed for people with conditions difficult for a GP to treat, but not so severe that they are a medical emergency. These were promised in Labor policy before the election. However, to really relieve some pressure from our acute hospitals we will need many more than this. 

The Budget restores the 50 per cent loading for telehealth psychiatry services in regional and rural areas and expands the headspace network. This is really welcome news. 

The Government is providing $2.6 billion to adapt Australia’s COVID-19 response to the current state of the pandemic (whatever that means). Funding will ensure continued supplies of personal protective equipment in high-risk settings and access to vaccines and treatments for at-risk cohorts. The Government clearly believes that the epidemic is over. I wish someone would tell the virus that. 

Finally, the budget includes $452 million to support the establishment of 2 world class cancer centres and $327.7 million to support Australians with type 1 diabetes.

Overall - The budget is a “small target” budget. It appears designed to be uncontroversial and to not alienate. The budget has relatively few goodies. This is appropriate. Fiscal stimulus through spending would have been a terrible idea given inflation pressures." 

On superannuation and housing - Increasing housing supply is a productive way to address housing affordability. This is a significantly better approach than prior moves to penalise investors or creating uncertainty surrounding housing taxation. 

Involving the private sector in housing construction has some logic. However, superannuation is not a piggy bank that government can raid. Investors want a financial return commensurate with the risk taken. Investors and portfolio managers must still scrutinise the financial merits of any such investment. Ignoring financial considerations puts people's savings at risk. 

The plan to create a fund to bridge the gap between market rents and subsidised rents will require more detail over time. There will need to be trust that the ‘market rents’ in this scheme do in fact increase appropriately over time. It is important this does not simply become like the Medicare rebate, whose inadequacy has led to the lack of bulk billing." 

On stage three tax cuts -  Keeping the stage three tax cuts is meritorious. Australia’s tax rate is significantly higher than that of the US, Hong Kong, Singapore, and even the United Kingdom. The stage three tax cuts are a starting point to making Australia more competitive in the international market for talent and capital. The government also ran on these policies. Walking away from the tax cuts would annihilate the ALP’s credibility and cement them as the party of higher taxes. 

The tax cuts are not analogous to those in the UK. The UK lowered the tax rate. Here, Australia’s top tax rate remains unchanged. But, the brackets change. This creates a very different impact. 

It is also incorrect to paint these as inflationary. They do not commence immediately. Further, given how ‘sticky’ taxes are, they are a bad mechanism to deal with inflation. Monetary policy – which is significantly more flexible – is a better tool to confront inflation."

This budget has outcomes designed to solve some of our most pressing cybersecurity problems both directly and indirectly. With recent alarming cyber breaches such as those of Optus and Medibank in the front of our minds, the need for skilled cybersecurity professionals is very obvious.  It is claimed that if we retain the current intake numbers of students into Australia’s universities and TAFEs, then we will not be able to fill this gap since they produce in total only 2000 graduates per year.

This budget provides for skills development in this area by the provision of 480,000 free TAFE places and 20,000 new university places with a focus on adding diversity to the student intake in this field with an emphasis on engineering and technologies where a skills gap exists.  

It also adds to a focus on cyber resilience, beyond current plans to extend cyber security legislation, with the investment of more funds, $31.3 million, into the Australian Public Service cyber hubs pilot, which is a project which is targeting the cyber security and resilience of all government agencies. Increased Defence spending also enhances the ability of the ADF to enhance its cybersecurity functions.

Many regional households are struggling and stressed. $560 million available to community organisations will offset the social effects for the most vulnerable in our communities. This budget appears to be a broad-brush approach with a little something for those who are more likely to bear the brunt of current economic predictions.

Cheaper childcare is a fantastic initiative alongside the cheaper medicine policy and aged care reforms. Establishing and monitoring national wellbeing will be the litmus test of how well this and future budgets meet the psychological, social and cultural needs of Australians.

The budget recognises the fiscal challenges and the cost-of-living pressures facing all Australians. Returning the budget to a strong position means we will be able to fund the things we all value and want. 
 
Investments in universities demonstrate their key role in the government’s strategy to build a better future around a strong economy. Initiatives that drive productivity pay for themselves over time with the extra economic activity generated, and universities do this in spades. Every dollar spent on university research returns $5 to the economy, and university-educated workers make a huge contribution across the economy, making it larger than it otherwise would be. 
 
The government has recognised the role universities play in a strong, modern economy and how the sector can help guide Australia through this challenging economic period. We look forward to engaging with the government through the Universities Accord process over the next year to achieve further positive outcomes for higher education, the economy and our nation. 
 
Our world-class universities are key economic drivers, educating the skilled workers our nation needs to grow and prosper while producing the research breakthroughs that drive us forward. We know that a skilled workforce is a productive workforce, and a productive workforce drives economic growth and a higher standard of living for all Australians. 
 
More than half of the one million jobs expected to be created in the next five years will require a university degree. That’s why we need more university-educated workers, not fewer. The additional 20,000 university places funded through the budget will ensure more people can access a university education while also helping address our country’s immediate skills needs. 
 
We also welcome funding in the budget to extend post-study work rights for international students. Skill shortages are biting hard across so many sectors of our economy right now and international students are graduating from our universities with the skills our workforce is crying out for. 
 
Whether it is skilled workers, export revenue or research breakthroughs, universities produce what Australia needs to thrive.