We came across a really interesting statistic recently: in the 12 months to February 2024, 437,000 Australians started a new job. Around 130,000 of these jobs were funded by the NDIS. By February 2024, 6% of the Australian workforce worked in the NDIS.
I do not know about you, but I am really proud to live in a country that devotes 6% of its workforce to helping people with a disability. By way of comparison, the ABS tells us that the entire mining industry only employs 2% of the total workforce. The NDIS employs three times as many Australians as the mining industry. (Although I suspect the mining industry pays a bit better!)
If the purpose of an economy is to provide work for people, the NDIS more than pulls its weight. Our economy benefits greatly from the NDIS – especially when you consider how meaningful disability work can be for the worker.
We should all be really proud of the NDIS. Unfortunately, though, too many people worry that the NDIS is somehow not sustainable. Specifically, they worry that the Commonwealth cannot afford the NDIS. Usually, when we talk about whether something is affordable, we are talking about whether there is enough money to pay for it. And there is a lot of worry that Australia won’t have enough money to pay for the NDIS.
While it is very widespread, this worry is actually quite unnecessary. After all, the Commonwealth Government pays for the NDIS using Australian dollars ($As). And the Commonwealth Government controls the creation of $As in the first place. Worrying that we won’t have enough dollars to pay for the NDIS creates a lot of unnecessary suffering.
The mistake that people make – from the Treasurer down to the man in the wheelchair in the street – is to think of the Commonwealth Government like a household. Before a household can spend money, it needs to obtain that money from somewhere else. It can do this by working, or by borrowing, or through a gift like a Centrelink payment. But the dollars come from somewhere else, and the household must obtain it before it can spend.
The Commonwealth does not need to get dollars from somewhere else. In fact, there is no ‘somewhere else.’ The Commonwealth is the only entity legally allowed to create dollars. It creates some dollars directly. And it licences certain banks to create dollars as well. Either way, though, the Commonwealth controls the process of bringing $As into existence. (If you are not sure about this, have a crack at creating $As yourself and see how that goes for you. I promise to visit you in prison).
This fact, that the Commonwealth creates dollars in the first place, is easily the most misunderstood element of modern economics. Which is such a pity, because once you understand it, you realise that simply paying for things is never an issue for a Commonwealth program. If you can create dollars whenever you need them, you literally can never run out.
That’s not to say there is no issue. While the Commonwealth cannot run out of money, it can run out of people to whom it gives that money. Right now, NDIS workers constitute 6% of the entire workforce. If the NDIS keeps growing, then that 6% figure will need to grow as well. At some point, we will reach the limit of the number of people who can work in the NDIS.
What’s more, people working in disability support can’t also work in some other field. By dedicating a significant portion of our workforce to people with disabilities, we can make it harder to get people to do other work. And disability work is not the only important work there is.
This is not an issue yet. Right now, with unemployment over 4% and under-utilisation almost 11%, we still have ‘spare’ workers who can allow the NDIS to expand. But at some stage, we might get to the limit of the number of people that the NDIS can employ. This will be the point beyond which the NDIS can’t keep growing. So, it is true that the NDIS cannot grow indefinitely. But the limit to growth is people, not dollars. Always remember that.
(By the way: unemployment is the number of people looking for a job and who cannot find any work. If you work one hour a week, you are not counted as unemployed. Under-utilisation includes unemployed people but also adds people who have got some work but not as much as they want. An under-utilisation rate of 11% means that for every 100 hours that people want to work, the economy is only providing 89 hours of actual work).