For $90,000, you can buy an “established” NDIS business in Sydney that has no participants and was only set up last December, but claims to be registered to provide everything from personal training to disability housing.
“This is a unique opportunity to acquire a well-positioned NDIS business with a wide range of service offerings,” the Facebook marketplace ad says.
The rapidly expanding $49 billion National Disability Insurance Scheme is radically reshaping the national economy. It is fuelling a taxpayer-funded boom in care sector employment and underwriting a once-in-a-generation structural increase in government spending that rivals the mining boom in terms of scale.
Government funded jobs have surged – about three in four jobs filled so far this year were in the so-called “non-market” sector – and the increase can be largely explained by a boom in healthcare employment courtesy of the NDIS.
Jobs in what the Australian Bureau of Statistics describes as the healthcare and social assistance industry now comprise almost 16 per cent of all employment nationally, up from 12 per cent a decade ago.
Commonwealth Bank economist Harry Ottley estimates that over the past five years, health employment increased by a whopping 36 per cent, compared to just 8 per cent across all other industries.
This kind of growth is not being seen across comparable economies. In New Zealand, health employment grew 19 per cent over the past five years, while in the US and Canada the increase was 10 and 7 per cent, respectively.
The bulk of the growth in health employment has been in what the ABS classifies as “social assistance” jobs, which include childcare and disability care.
“The increasing NDIS-aligned workforce likely goes most of the way to explaining the exceptional growth in this specific sub-industry,” Ottley says.
**NDIS hiring boom**
While higher interest rates and lower household spending have forced private sector employers to cut back on hiring, there is little evidence of a sustained downturn in the care sector.
NAB economist Taylor Nugent says even the recovery in overseas migration since pandemic border restrictions lifted has not been enough to meet demand for healthcare workers.
Jobs website Seek contains 14,063 job openings under the search term “NDIS” today. “Aged care” yields 22,899 vacancies.
ABS figures released last week show the number of job openings in healthcare and social assistance are still more than double 2019 levels despite a recent pullback.
It’s a different story outside the healthcare sector, where job openings have dropped one-third since August 2022 (but are still about 30 per cent higher than pre-pandemic levels).
The NDIS is also leaving an indelible mark on government finances, helping to drive federal government spending to a record 11.8 per cent of GDP last quarter.
**Australia’s largest social program**
A scheme that existed in name only a decade ago, and was originally forecast by the Productivity Commission to cost $22 billion, is now Australia’s second most expensive social program, behind the age pension.
This financial year it will cost more to run than the aged care system ($36 billion), Medicare ($32 billion), and the Pharmaceutical Benefits Scheme ($20 billion).
While the cost of the NDIS was originally envisaged to be split 50-50 between the Commonwealth and the states, the breakdown is now more like 75-25 due to the federal government’s decision to fund ongoing cost blowouts.
Overtaking the pension is largely a matter of not if, but when.
If the cost of the NDIS continues to grow at 20 per cent per year, that milestone will be reached within three years. If Labor succeeds in reining in the program’s annual growth rate to 8 per cent by 2026, the crossover is about a decade away, according to the Parliamentary Budget Office.
A sustainable social program should grow closer to 4 per cent to 5 per cent annually, which allows for wages and population growth.
The Albanese government has passed new laws ending automatic top-ups for NDIS plans and overhauling how participant budgets are set, but the wholesale reform called for by last year’s independent NDIS review remains some way off.
**Productivity slumps**
The surge in the NDIS and across the rest of the care sector has been a major challenge for productivity.
The recent boom in employment across the education and healthcare sectors has not generated an equivalent increase in output, causing labour productivity across government-funded industries to fall to an 18-year low in June.
Reserve Bank governor Michele Bullock has warned that productivity growth will need to improve to achieve both low inflation and rising living standards.
Productivity Commission boss Danielle Wood says it “always has been and always will be difficult” to improve productivity in labour-intensive industries such as the care sector.
“So what that means is as those sectors expand as a share of the economy, as they inevitably will, that will drive down productivity overall, and you have got to work harder elsewhere,” she told The Australian Financial Review in July.
Just how much harder we will all have to work hinges on the success or failure of the federal government’s efforts to tame the NDIS
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For $90,000, you can buy an “established” NDIS business in Sydney that has no participants and was only set up last December, but claims to be registered to provide everything from personal training to disability housing.
“This is a unique opportunity to acquire a well-positioned NDIS business with a wide range of service offerings,” the Facebook marketplace ad says.
The rapidly expanding $49 billion National Disability Insurance Scheme is radically reshaping the national economy. It is fuelling a taxpayer-funded boom in care sector employment and underwriting a once-in-a-generation structural increase in government spending that rivals the mining boom in terms of scale.
Government funded jobs have surged – about three in four jobs filled so far this year were in the so-called “non-market” sector – and the increase can be largely explained by a boom in healthcare employment courtesy of the NDIS.
Jobs in what the Australian Bureau of Statistics describes as the healthcare and social assistance industry now comprise almost 16 per cent of all employment nationally, up from 12 per cent a decade ago.
Commonwealth Bank economist Harry Ottley estimates that over the past five years, health employment increased by a whopping 36 per cent, compared to just 8 per cent across all other industries.
This kind of growth is not being seen across comparable economies. In New Zealand, health employment grew 19 per cent over the past five years, while in the US and Canada the increase was 10 and 7 per cent, respectively.
The bulk of the growth in health employment has been in what the ABS classifies as “social assistance” jobs, which include childcare and disability care.
“The increasing NDIS-aligned workforce likely goes most of the way to explaining the exceptional growth in this specific sub-industry,” Ottley says.
**NDIS hiring boom**
While higher interest rates and lower household spending have forced private sector employers to cut back on hiring, there is little evidence of a sustained downturn in the care sector.
NAB economist Taylor Nugent says even the recovery in overseas migration since pandemic border restrictions lifted has not been enough to meet demand for healthcare workers.
Jobs website Seek contains 14,063 job openings under the search term “NDIS” today. “Aged care” yields 22,899 vacancies.
ABS figures released last week show the number of job openings in healthcare and social assistance are still more than double 2019 levels despite a recent pullback.
It’s a different story outside the healthcare sector, where job openings have dropped one-third since August 2022 (but are still about 30 per cent higher than pre-pandemic levels).
The NDIS is also leaving an indelible mark on government finances, helping to drive federal government spending to a record 11.8 per cent of GDP last quarter.
**Australia’s largest social program**
A scheme that existed in name only a decade ago, and was originally forecast by the Productivity Commission to cost $22 billion, is now Australia’s second most expensive social program, behind the age pension.
This financial year it will cost more to run than the aged care system ($36 billion), Medicare ($32 billion), and the Pharmaceutical Benefits Scheme ($20 billion).
While the cost of the NDIS was originally envisaged to be split 50-50 between the Commonwealth and the states, the breakdown is now more like 75-25 due to the federal government’s decision to fund ongoing cost blowouts.
Overtaking the pension is largely a matter of not if, but when.
If the cost of the NDIS continues to grow at 20 per cent per year, that milestone will be reached within three years. If Labor succeeds in reining in the program’s annual growth rate to 8 per cent by 2026, the crossover is about a decade away, according to the Parliamentary Budget Office.
A sustainable social program should grow closer to 4 per cent to 5 per cent annually, which allows for wages and population growth.
The Albanese government has passed new laws ending automatic top-ups for NDIS plans and overhauling how participant budgets are set, but the wholesale reform called for by last year’s independent NDIS review remains some way off.
**Productivity slumps**
The surge in the NDIS and across the rest of the care sector has been a major challenge for productivity.
The recent boom in employment across the education and healthcare sectors has not generated an equivalent increase in output, causing labour productivity across government-funded industries to fall to an 18-year low in June.
Reserve Bank governor Michele Bullock has warned that productivity growth will need to improve to achieve both low inflation and rising living standards.
Productivity Commission boss Danielle Wood says it “always has been and always will be difficult” to improve productivity in labour-intensive industries such as the care sector.
“So what that means is as those sectors expand as a share of the economy, as they inevitably will, that will drive down productivity overall, and you have got to work harder elsewhere,” she told The Australian Financial Review in July.
Just how much harder we will all have to work hinges on the success or failure of the federal government’s efforts to tame the NDIS