NDIS Costs as a % of GDP

This is another one of my posts on NDIS Costs.

This week I have been looking at NDIS costs as a percentage of GDP.

Australia’s GDP was $1.5 trillion in 2011 (ABS) when the Productivity Commission reported on the NDIS, over the last decade has grown around 40%. This is a slower rate of growth than the previous decade in the Mining Boom years, when GDP grew around 53% over 10 years.

In 2011 the Federal and State/Territory combined spending on Disability Support was $7.1 billion, which was about 0.47% of GDP.

The Productivity Commission 2011 Report on the NDIS estimated it would cost $13.6 billion in 2011 dollars if it was fully rolled out that year. This was about 0.9% of GDP in that year.

The Australian Government Actuary updated the estimate for the NDIS in 2012, saying the NDIS would cost $22 billion at full scheme, which was expected to occur in 2018-2019.

NDIS entered full scheme in mid-2020 and the cost of the NDIS was roughly just under $22 billion per year, when averaged over two financial years.

GDP in 2019-2020 was $1.9 trillion (ABS), and the NDIS cost of $22 billion was about 1.2% of GDP.

This financial year 2021-22 GDP is expected to be $2.06 trillion (ABS), and the NDIS is expected to cost just under $30 billion which will be about 1.45% of GDP.

So we have seen Disability Supports go from 0.47% of GDP prior to the NDIS when it was widely acknowledged the system was underfunded and failing people, to around 1.45% of GDP this financial year.

The NDIA Actuary estimates the NDIS will cost $60 billion by 2030. GDP is expected to be $2.6 trillion in 2030, as Treasury estimates a growth rate of 2.6% per year. So the NDIS is expected to cost 2.3% of GDP in 2030.

The Federal Government collects around 23% of GDP as revenue. States and Territories combined collect another 5% of GDP, taking all taxation revenue in Australia to a ratio of around 28% of GDP. Total combined Federal and States/Territories government revenue in Australia is roughly $600 billion.

The Coalition has committed that if it stays on as Government Federal revenue collection will continue to be under 23% of GDP.

The Greens have a policy of raising the tax to GDP ratio by increasing taxes on billionaires.
I am not sure what Labor’s election policy on taxation is.

In the last decade there have been Budget deficits every single financial year, leading to growing debt. I personally feel like we should lift the tax to GDP ratio by 5% which would collect about $100 billion in revenue per year.