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With inflation numbers volatile and wages lagging, the Reserve Bank has held off reducing interest rates. Money policy remains tight. This will be a problem as the states take on responsibility for delivering NDIS programs.

In case you missed it, the Reserve Bank didn’t cut interest rate this week, This leaves households (and state governments) squeezed by a stagnant economy and shrinking revenue.

This is disappointing for anyone paying off a mortgage, of course, but why discuss it in a newsletter about the NDIS? Well, US President Bill Clinton explained why in a short, pithy phrase some 30 years ago: “It’s the economy, stupid.”

The economy drives politics just as emphatically as your own income drives the household budget. Everything is affordable, but as the budget becomes tighter and tighter, you need to make increasingly difficult choices on what to spend your money on.

Reserve Bank Governor Michele Bullock spelt it out: although headline inflation is easing, it’s because of subsidies (like those for energy bills). These are temporary measures the Bank won’t factor into long-term strategy. Underneath, she said, inflation is running hot.

People need more money to live and government programs, like the NDIS, are still growing much faster than the economy.

Growth of the NDIS is still significantly outpacing broader economic growth.

This is the problem for the NDIS. If politicians want re-election, they’ll be concerned about spending money the economy doesn’t have. And they will make cuts.

Is this what’s behind the current changes to the NDIS?

Rental prices—once a key inflation driver—have flattened across most capital cities, but not because conditions have improved. Households are hitting affordability limits. More people are cramming into the same dwellings, demand is softening, and wage growth is stalling. That’s hardly a foundation for recovery.

It might mean inflation’s coming down, but the cost of the NDIS is still growing faster than the rest of the economy - and that’s a problem.

But the other real strain may be elsewhere: from the very governments expected to pick up the slack as federal programs like the NDIS face tighter controls. New research from the Australia Institute shows state budgets are being hollowed out by a decade of underperforming GST collections. As the Commonwealth looks to step back from disability funding, the states may be the least capable of stepping in.

And our final piece on last week’s National Centre of Excellence in Intellectual Disability Health conference, this time from Scope.

Caroline Hart and Annie Loughens focused on co-research – that is, research carried out “with” or “by” people with disability rather than “to”, “about” or “for” them. Research involving people with disability as co-researchers has produced important findings across a range of areas, including health, employment, inclusion, and advocacy. Supporting research conducted by people with disability is an important part of Scope’s work.