A new survey has revealed a concerning economic outlook for the nation's disability sector, with a growing number of providers predicting losses for the coming financial year. The survey also showed, however, that providers were more optimistic this year on the direction of NDIS reforms, with the NDIS Review a crucial opportunity for change.

The State of the Disability Sector Survey 2022, commissioned by peak body National Disability Services (NDS) and analysed by the University of Sydney, revealed that 36 per cent of providers anticipate making a loss/deficit in 2022-23, up from 23 per cent in 2021-22.

NDS CEO, Laurie Leigh, says the sector are astute predictors of profit and loss.

“The fact that many more providers are expecting to make a loss this year is particularly concerning. Providers are very accurate in predicting their financial outcomes for the coming year. Predictions of losses made in last year’s survey were consistent with the rate of losses reported by providers in 2021-22,” said Ms Leigh.

In contrast, disability service providers were optimistic about the federal government's NDIS reforms. 43 per cent of respondents agreed or strongly agreed that NDIS policy reforms were heading in the right direction.

“The NDIS Review is a crucial opportunity for sector reform. Cutting red tape and making the NDIS simpler and more efficient is essential to support growth and ensure that high-quality services can be provided to the people with disability who need them,” Laurie Leigh said.

Yet the sector is fatigued by change. The survey found the majority of leadership teams were absorbed with dealing with NDIS changes, and respondents reported their staff were exhausted by ongoing changes in the NDIS and other policy areas.

“Solutions need to simplify and streamline the system, not complicate it further, and reform should be progressively implemented to maintain momentum”, said Ms Leigh.

Laurie Leigh also called on the federal government to improve NDIS price modelling.

“The price increases in June were a catch-up payment after many years of underpayment on the cost model. Wage pressures and rising costs are constant and require improvement in the pricing.”

Other key findings include:

• Workforce remains a challenge. 83 per cent of respondents reported moderate to extreme difficulty recruiting suitably trained Disability Support Workers.
• Providers feel regulation and pricing are stifling innovation. Just 11 per cent agreed or strongly agreed that ‘taken together, NDIS Pricing and Regulation are conducive to providing innovative services that respond to participant needs.’
• Providers are concerned that much of the regulation that is imposed on providers is not contributing to better outcomes or safer services for participants. Only 39 per cent
• of respondents were confident the Quality and Safeguarding Framework supported quality of services.
• Very few organisations planned delivery of new types of services. 80 per cent of respondents reported that they had received requests for disability services that they had been unable to provide.
• There was concern with the direction of Disability Employment Service (DES) policy. Just under half of DES providers (48 per cent) disagreed or strongly disagreed that DES policy reforms were heading in the right direction, down almost 10 per cent from last year.
• Very few respondents believed that Workforce Australia policy reforms were heading in the right direction. 67 per cent disagreed that the digital service model had improved employment opportunities for DES participants
• Despite the uncertainty around COVID-19, predictions in the 2021 survey regarding financial outlook were quite accurate. In 2021, 45 per cent of respondents predicted they would make a profit/surplus in the 2021/2022 financial year – and in this year’s survey 46 per cent of respondents reported that they made a profit/surplus for that financial year. Similarly, last year, 23 per cent predicted a loss/deficit and 23 per cent did have a loss/deficit.

The State of the Disability Sector Report 2022 is available on the NDS website.