NZDSN Media Release – 10% funding increase needed just to meet rising disability sector costs and support frontline workers

Disability support providers welcome the disability funding review, as they expect it to confirm the sector is significantly underfunded and that the Government needs to do better for disabled people, their whānau, and for care and support workers, says Disability Support Network CEO Peter Reynolds.

“This review is a perfect chance for the government to prove their commitment to frontline workers and cannot become an excuse for cuts.”

“Cost overruns in disability support programmes aren’t signs of mismanagement but clearly the result of more than a decade of frontline service underfunding. In the disability support system, nearly all the money goes to the ‘frontline’ and any significant savings can only come from cutting services that support disabled people.”

“We estimate a 10.4% increase in funding will be needed just to keep pace with rising demand and costs in the disability sector, with 24% in total needed to make up for historic underfunding. Additionally, the Government must fund the stalled Pay Equity settlement for care and support workers.”

“We note the irony that the review’s terms of reference has not been subject to any consultation with our sector, and therefore risks repeating mistakes from the botched 18 March 18th Whaikaha announcement.”

“Over the past six years, the disability support services budget has increased at 10% a year. This might seem like a lot, but it has barely been enough to keep up with a growing and ageing population of disabled New Zealander with more complex needs.”

“For Budget 2023, the Government estimated cost pressures were $225m, or 10.9%, for disability support services. Adjusting for slower inflation but faster population growth, we estimate an increase of 10.4% is required in budget 2024 just to match cost pressures. This equates to $237m a year, or $949m over the forecast period.”

“Disability support providers are already struggling to keep their heads above water. If funding fails to keep up with rising need costs, services will be cut back and disabled people will not get the support they need.”

“On top of this, the Government needs to address the historic underfunding that has put services in such a precarious position, and deliver the money needed for care and support workers to have the pay equity they are entitled to.”

“We would welcome any efficiencies that can be made in service procurement and contract oversight, which would save costs for Whaikaha, suppliers and ultimately, the taxpayer. But any savings made must be put back into frontline disability services,” said Peter Reynolds.

ENDS