Taxpayer-Funded NDIS: Responsible for Generating 1 in 3 Australian Jobs in the Past Year

Taxpayer-Funded NDIS: Responsible for Generating 1 in 3 Australian Jobs in the Past Year

New research has revealed that the National Disability Insurance Scheme (NDIS), a taxpayer-funded program in Australia, has been the main driver of employment in the country over the past year. The NDIS, which aims to improve the quality of life for people with disabilities, has created approximately one-third of the new jobs in the Australian economy.

The NDIS has been expanding rapidly, with a growth rate of over 14 percent each year. Currently, over half a million Australians participate in the program, which provides a wide range of services including education, employment, social participation, independence, living arrangements, and health and wellbeing.

A study conducted by investment bank Jarden found that around 130,000 of the 437,000 jobs generated in the year leading up to February 2024 were in industries related to the NDIS. However, despite accounting for a significant portion of new employment, NDIS-related work only represented about six percent of total jobs. This raises concerns about the stability of the job market.

According to Jarden economist Carlos Cacho, the blowout in NDIS funding is primarily responsible for the job growth. He noted that the rise in the public job sector, which includes the NDIS, has masked the slowdown of the private job sector, particularly in industries such as hospitality and construction.

The latest employment data from the Australian Bureau of Statistics shows that the unemployment rate dropped from 4.1 percent in January to 3.7 percent in February. Mr. Cacho suggests that without jobs growth in NDIS-related areas, the unemployment rate would be around 4.6 percent. This highlights the significant support that the program is providing to the labor market and economy.

However, as NDIS expenditures continue to increase, concerns about its sustainability arise. The recent federal budget projected that the cost of the NDIS would reach $42 billion in the 2023-2024 financial year and soar to $97 billion by 2032-2033. This represents a significant blowout compared to the previous government’s budget.

In response to the growing costs, the Labor government announced plans to save over $74 billion in NDIS funding over the next decade by reducing its annual growth rate. The government aims to decrease the growth rate from the current 14 percent to 8 percent. Despite these cost-cutting measures, Treasurer Jim Chalmers assures the public that eligibility for the NDIS will not be tightened, and the government remains committed to the future of the disability scheme.

Following a recent review of the program, the government has introduced legislation to overhaul the NDIS. However, this has raised concerns among states and territories about potential impacts on their budgets.

The NDIS has undoubtedly played a significant role in job creation in Australia over the past year. However, as its costs continue to rise, finding a balance between providing essential services and managing expenses remains a challenge for the government. The future of the NDIS and its impact on employment will continue to be closely monitored as policymakers strive to ensure its sustainability while supporting people with disabilities.