The National Disability Insurance Scheme (NDIS) has been touted as the biggest and most expensive social reform since Medicare. The Productivity Commission initially estimated that the NDIS would provide disability care and support services to 411,000 people at a cost of $13.5 billion (gross) every year. However, subsequent estimates have revised the cost of the scheme to more than $22 billion (gross) every year when the scheme is fully operational in 2018–19. This report argues that this figure does not adequately reflect the ongoing cost of the NDIS in first few years following full implementation. Based on case studies of similar schemes in Australia and overseas, it is clear that the government expenditure on the NDIS will grow rapidly, at around 6% every year; by 2023–24, the NDIS will provide disability care and support services to around 500,000 people at a cost of approximately $29 billion (gross). This report also outlines a number of risks to the scheme that have the potential to drive expenditure on the scheme even higher. The NDIS will be the new leviathan of the Australian welfare state.

Andrew Baker is a Policy Analyst at The Centre for Independent Studies.