Our ageing population will have a major effect on disability-related spending, writes Samuel Murray.
Victoria University professor of public policy Jonathan Boston has consistently warned us about the perils of ignoring our long-term interests in politics. I had the privilege of having Prof Boston as my research supervisor last year. His warning holds true for many areas, including for the challenges and opportunities of our ageing population.
By 2028, Statistics New Zealand predicts between 19% and 20% of our population will be over 65. By 2063, 30% of our population could be over 65. People are generally aware this will increase superannuation spending. What we often fail to recognise is the effect our ageing population will have on disability-related spending. Disability rates increase with age.
In the 2013 Disability Survey, the estimated disability rate for people over 65 was 59%.
There is no reason to panic, though. With the right support and accessible infrastructure, the effect on our workforce could be minimal and the impact on public finances manageable. There are even potential advantages, such as a more experienced workforce and an increase in our ability to capture the growing accessible/disability-friendly tourism market.
We do have a problem, however, with our inflexible funding systems. Apart from ACC, our disability-related funding is set using a simple budget allocation process. Each year the government allocates a set amount of funding and officials from the Ministries of Education, Health and Social Development must broadly make do. This system has served us poorly. It often fails to keep up with inflation, demographic changes such as an ageing population, and population growth.
For disability supports, this system of funding has proved particularly problematic. Not only do we have an ageing population, but people are also expecting more from their supports. Disabled people and their whanau now rightfully expect much more choice and control over their support.
They expect to have the same opportunities as others in society. Governments have increased funding when pressured to, such as with the recent pay equity settlements. There is little forward planning, though. Successive governments have been content to wait for the pressure to build up.
There are good reasons in the long term for the government to invest more now to provide better quality support. Better quality support can help people be more independent in their community and help them find work. Poorly funded support also often causes disabled people to rely on family members for support.
This can prevent family members from working and they end up on government income support. There has been a large increase over the last decade in the number of people on the Supported Living Payment for carers.
This benefit is for people who are supporting someone at home who would otherwise need government-funded disability support. As of March 2017, there are 8690 carers on the Supported Living Payment.
There are large benefits to the wider economy and the government's bottom line from disabled people being more included in their local community. A New Zealand Institute of Economic Research report earlier this year predicted that reducing the unemployment rate among disabled people would save the government $270million a year and increase New Zealand's GDP by $1.4billion. Further, if disabled people live more independently in the community and have higher quality support, their family members may be able to work more.
There is a positive future available to us, where disabled people live good lives in the community and the government's books look healthy. As with most good things in life, it requires some upfront sacrifice. We definitely need more investment in making buildings and transport more accessible.
Universal design should be standard practice across New Zealand. Universal design is where buildings and products are designed to be used by everyone, including older people and disabled people. We also need more investment in innovative support that helps disabled people find work and live independently in their community.
Investing smartly now will ensure the future financial sustainability of government finances.
What you can do this election is simply ask politicians what they plan to do now to manage the full impact of the ageing population. They need to consider more than just superannuation.
-Samuel Murray works in Dunedin as the national policy co-ordinator at CCS Disability Action.
