Ideas@TheCentre
The NDIS will cost $22 billion a year, says new report
The National Disability Insurance Scheme (NDIS) will cost Australian taxpayers around $22 billion a year (gross) and $10.5 billion (net) in its first full year of operation. This figure is substantially larger than the $15 billion (gross) and $8 billion (net) currently being used by politicians and commentators in the public debate.
This revision is a result of a Freedom of Information (FOI) request by The Centre for Independent Studies for the costings of the NDIS conducted by the Australian Government Actuary (AGA). You can find a copy of the AGA report here and you can read the Australian Financial Review’s coverage of the release here.
The reason for the upward revision is simple: the $15 billion figure is based on the Productivity Commission’s estimated cost of the NDIS if it were fully operational in 2009–10.
However, the NDIS will not be fully operational until 2018–19, so in effect, the $15 billion figure does not include nine years of price inflation, wage growth, and population increases. The AGA’s review incorporates these very important variables in its $22 billion estimate, giving us a better idea of what the budgetary cost of the NDIS will be when it is up and running.
The government’s failure to release this document earlier is disturbing. Given the sheer size and scope of the NDIS, which is essentially a massive new entitlement scheme, taxpayers deserve to have accurate information about the overall cost of the NDIS because they will be footing the bill.
As a result, the NDIS has not received the scrutiny it deserves. Hopefully, with a public acknowledgement by the government that the NDIS will cost closer to the AGA’s estimated $22 billion every year, rather than the commission’s $15 billion, the NDIS will get the scrutiny it deserves.
Andrew Baker is a Policy Analyst at The Centre for Independent Studies and author of the upcoming publication, The New Leviathan: A National Disability Insurance Scheme.
