NDIS on track to devour mining golden goose in two years with federal annual spend to climb above $60b

The Federal Government’s annual expenditure on the National Disability Insurance Scheme is projected to be two years away from surpassing all the taxes and royalties from Australia’s powerhouse mining sector, prompting fresh calls for a policy overhaul. The NDIS is set to cost Federal taxpayers $52 billion this financial year and $63.6 billion by the 2029 financial year, according to government estimates. These figures do not include the additional billions of dollars a year contributed at a State level. Rampant rorting by providers and lax eligibility rules have contributed to ballooning costs that increasingly risk the imposition of tax hikes on individuals and companies, experts warn. An EY report published last year estimated the Australian mining sector generates about $26.9b in royalties and $32.5b in company tax — equalling $59.4b. Menzies Research Centre executive director David Hughes said that while mining revenues fluctuated each year, based on current rates the NDIS was on track to swallow up the entirety of the direct public benefit from Australia’s biggest export earner. “If we assume mining continues to contribute roughly $60 billion a year in royalties and company tax, and the NDIS grows broadly in line with the Commonwealth’s forecasts, then the annual cost of the NDIS would be approaching and potentially exceeding mining’s contribution to government revenue by around 2028-29,” Mr Hughes said. Australian Taxpayers’ Alliance chief economist John Humphreys said the cost of NDIS “is clearly unsustainable” and threatened to be a “budget-killer for Australia”. “The problem is that NDIS spending is growing much faster than the broader economy or government revenue, which is a recipe for disaster,” Dr Humphreys said. “It has already grown to be the second-largest program in the budget, only behind the aged pension, and if the current rate of growth continues it is on track to become the largest program in about 10 years “The consequence will be either higher taxes or a blowout in budget deficits that result in ever-higher interest payments and inflation.” Dr Humphreys said both options would be “terrible”. “Australians already face income taxes that are too high, which is holding back investment and productivity, causing the stagnation we’ve experienced over the last decade,” he said. “The only responsible solution is to scale back spending, especially including the NDIS, but that will require political courage. Sadly, that is in short supply.” Asked if more could be done to curb the disability scheme’s expenditure, NDIS Minister Mark Butler did not respond to a request for comment.