Federal budget: NDIS to cost $100b, exceeding the pension: budget watchdog

Already a subscriber?The National Disability Insurance Scheme is on track to overtake the age pension as the most expensive area of government spending within three years if it remains stuck on its current growth trajectory.

finds the watchdog’s baseline expectation is for the rapidly growing scheme to overtake the age pension in 2034-35, when both programs are expected to cost about $100 billion a year to operate.The PBO’s baseline projection is effectively a best-case scenario, and assumes Mr Shorten achieves his target of reducing the NDIS’ annual growth rateBut even these projections may be too optimistic, given the NDIS has outgrown Treasury’s forecasts for several years.

“If we can get to 8 per cent, that’s a very good start. I’m confident that when the scheme is working in the best interest of participants, some of the bloating will disappear, but it’ll be an even better experience,” he told theMr Shorten’s legislation aims to bring NDIS growth down to 8 per cent a year from 20 per cent in part by ending the practice of automatically topping up NDIS participant plans when they hit their limit.

While revenue as a share of GDP is expected to increase over the coming decade, the tax base will narrow. The PBO estimates tobacco excise revenue will fall to 0.2 per cent of GDP in a decade from 0.4 per cent as more people quit smoking. The fuel excise will fall to 0.9 per cent of GDP from 1 per cent as more people buy EVs.

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