Budget Review October 2022–23 Index
Carol Ey, Don Arthur and Luke Buckmaster
This article examines changes in expenditure on social
security and discusses significant social welfare budget measures, including
the National Disability Insurance Scheme (NDIS).
Total expenditure on payments and
related programs
Estimated expenditure on the main social security payments
and associated programs is expected to fall by 2.9% from 2021–22 to 2022–23,
before climbing by 14.5% to 2025–26 (Parliamentary Library calculations from Budget
strategy and outlook: budget paper no. 1: October 2022–23, pp. 180,
189–92). The total expenditure of $159.1 billion in 2022–23 includes
spending on pensions, income support payments for job seekers, family
assistance payments, veterans’ payments and other small social welfare
programs, but excludes payments to students (which are included in education
expenditure in the budget papers), the NDIS and aged care services. Figure 1
below shows expected expenditure by each of the main payment groupings.
The decline in 2022–23 is largely the result of a
significant reduction in expenditure on ‘Other programs’ due to the cessation
of the Pandemic
Leave Disaster Payment in October 2022 (Budget
paper no. 1, p. 192). Expenditure on job seeker payments also
falls in 2022–23 due to low unemployment levels, before rising gradually to
slightly lower than 2021–22 levels by 2025–26, reflecting the weaker outlook
for employment over the out years (p. 192). Increased expenditure on the
Child Care Subsidy and Family Assistance (which includes Paid Parental Leave) are
partially driven by measures announced in this Budget (see below). Demographic
factors are responsible for the expected increases in payments to the aged, Disability
Support Pension and carer payments, and for a decline in expenditure on
veterans’ payments (pp. 189–90).
Figure 1: Estimated expenses on
social security and welfare payments ($ billion)
Note: excludes student payments, National Disability Insurance Scheme and aged
care expenses.
Source: Budget strategy and outlook: budget paper no. 1:
October 2022–23, pp.
180, 189–92.
Budget measures
The page references below refer to Budget
measures: budget paper no. 2: October 2022–23 unless otherwise
indicated.
Child Care
One of the centrepieces of the Government’s
‘Responsible cost-of-living relief’ package is increasing the child care subsidy
rate for working parents (see p. 93 and Building
a better future: Budget October 2022–23,
p. 12). This measure, set to cost $4.7 billion over 4 years and $1.7 billion
per year ongoing, increases the Child Care Subsidy
from a maximum of 85% to 90% for the first child in care and extends coverage
to households earning up to $530,000.
The Government estimates these reforms will increase hours
worked by women with young children by up to 1.4 million hours per week in 2023–24
(Building
a better future, p. 12). While the move has generally been welcomed,
there is concern
that a shortage of workers will limit the capacity of the sector to meet the
additional demand.
This measure is included as part of the Family Assistance Legislation
Amendment (Cheaper Child Care) Bill 2022, which
also incorporates the ‘Child Care Subsidy Reforms Integrity Package’, which is estimated
to cost $65.3 million over 4 years (p. 91).
For further information on these measures, please see the Bills
Digest.
Paid Parental Leave
Another feature of the ‘Responsible cost-of-living relief’
package is expanding Paid Parental Leave (see p. 117 and Building
a better future, p.13). From 1 July 2023, the Paid Parental Leave
Scheme (which includes Parental Leave
Pay and Dad
and Partner Pay, currently a total of 20 weeks) will be made more flexible,
to allow parents to more equally share care. In addition, from 1 July 2024, the
Government will commence expanding the Scheme by 2 additional weeks per year
until it reaches 26 weeks from 1 July 2026.
The proposal to increase the flexibility of the Scheme was
included in the previous Government’s budget in March but was not implemented
prior to the election. This proposal received some criticism because it did not
include any ‘use it or lose it’ provisions to encourage fathers to access the
scheme (see Budget
review 2022–23: Changes to the Paid Parental Leave Scheme for
discussion of the proposal and the reaction to it). The measure in this Budget states
that the Women’s Economic Equality Taskforce ‘will assist in the finalisation
of the changes … including the period of concurrence and the most appropriate
proportion of “use it or lose it” weeks’.
The Morrison Government proposal was due to commence in
March 2023. Presumably the later commencement date in the current measure is
the reason for the expected savings in 2022–23 and 2023–24. Overall, the
measure is estimated to cost $531.6 million over 4 years and $619.3 million
per year ongoing.
Support for people living with
disability
National Disability Insurance
Scheme
Scheme funding
The estimated cost of the National Disability Insurance
Scheme (NDIS) continues to rise substantially, with the Budget noting an upward
revision of $5.9 billion over the 4 years to 2025–26 since PEFO (Budget
paper no. 1, p. 93). The Government says this largely reflects ‘projected
increases to participant numbers and a projected increase in the average value
of participant plans’ (p. 93). Over the next decade, the Commonwealth’s
contribution to payments for NDIS supports is expected to increase on average
by 13.8% per year (the second fastest growing payment behind interest) (p. 87).
The total cost of the NDIS to Commonwealth, state and
territory governments is expected to rise from $29.9 billion in 2022–23 to
$51.8 billion in 2025–26 (p. 191). Over this period, the Commonwealth’s
contribution is expected to rise from $22.5 billion to $37.2 billion
(Portfolio
budget statements October 2022–23: budget related paper no. 1.14: Social
Services portfolio, p. 135). For further information on NDIS funding,
including the issue of financial sustainability, see the Briefing Book article,
‘Funding
the National Disability Insurance Scheme’.
Measures
The Budget includes several expenditure measures under the
heading, ‘Plan for the National Disability Insurance Scheme’ (pp. 184–85).
These include:
- $385.0 million in 2023–24 in additional operational funding to
the National Disability Insurance Agency (NDIA) to support NDIS participants
-
$12.4 million to resolve disputes, reduce the number of appeals
and provide earlier outcomes for participants, and $21.2 million to support
participants and their families with their appeals
-
$18.1 million over 2 years from 2022–23 to review NDIS design,
operations and sustainability (the Government announced the Independent Review of the National
Disability Insurance Scheme on 18 October 2022).
The Government has also announced funding of $158.2 million
over 4 years to the NDIA to ‘increase its public service staff over two years
by the equivalent of 380 full-time workers, most of whom will work in the front
line to improve service delivery for existing and future NDIS participants’ (Portfolio
budget statements, p. 18).
The Budget also includes $126.3 million over 4 years
from 2022–23 for a cross-agency Fraud Fusion Taskforce to ‘address fraud and
serious non-compliance’ in the NDIS (p. 9). The Government estimates that this
will lead to $291.5 million in increased receipts from recoveries of debts
from NDIS providers.
Other measures
The Government is providing $19.4 million over 4 years
to extend the Disability
Employment Services program for 2 years to 2025 (p. 179). This extension is
to allow for a detailed design for a new disability employment services model
to be prepared. Further information on the background to this development is
contained in the Briefing Book article ‘People
with disability and work’.
In addition, the Government will provide $47.0 million
over 4 years to improve support for people living with disability and their
families (p. 176),
including a $32.2 million contribution to the building of 400 new
‘Changing Places’ toilets for people with high support needs. The Government is
also providing $11.2 million over 4 years for the Disability
Representative Organisations Program, and $5.3 million to develop a
National Autism Strategy (Portfolio
budget statements, p. 19).
Abolishing the Cashless Debit Card and
creating a new ‘enhanced income management’ scheme
The Government is abolishing the Cashless
Debit Card (CDC) program and creating a new ‘enhanced income management’
scheme.
CDC
participants in Cape York and the Northern Territory will automatically
transfer to the new enhanced income management scheme on 6 March 2023.
Voluntary CDC participants in other locations will also transfer to enhanced
income management on 6 March 2023. The Government has indicated that income management participants in the Northern Territory and some other locations will have the option to move to enhanced income management from 1 July 2023. This would require additional legislation.
The
Budget provides $217.7 million over 4 years to create the new scheme and
manage the transition (p. 75). There is no detailed breakdown of the costs
because some components of this measure will involve negotiating contracts with
a card provider or providers.
Like the existing CDC program, the new ‘enhanced income
management’ scheme will use a debit card that blocks access to cash. However,
income support recipients participating in the scheme will deal with Services
Australia rather than the card provider.
Legislation
for the ‘enhanced income management’ scheme was enacted in September 2022.
Improving service delivery
This Budget includes 2 measures to assist in the delivery of
social welfare services:
-
$500.2 million is to be provided over 4 years (and $145.6 million
ongoing) to improve front-line service delivery. This includes 200 additional
staff for Services Australia, 500 staff for the Department of Veterans’ Affairs
to clear the claims backlog and 380 staff for the NDIS (p. 81).
- The Government is also providing $560.0 million over 4 years
in funding supplementation to Community Sector Organisations at need due to
staff wage pressures and higher inflation (p. 84).
Funding of $30.0 million is provided in 2022–23 for the Royal Commission into the Robodebt
Scheme (p. 54).
Other measures already being
considered by Parliament
A number of other social services and related measures in Budget
paper no. 2 have already had related legislation introduced to
Parliament. These include:
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