Australia can build a better disability employment system
by Alastair McEwin
Australia spends more than $1.3 billion a year on helping disabled people find work. Yet for many Australians with high support needs, that investment has delivered very little. The rate of employment of this cohort has remained stubbornly low for decades.
Nearly three years ago, the Disability Royal Commission made a series of recommendations to fix this problem. It called for an end to sub-minimum wages for disabled workers by 2034, the phasing out of Australian Disability Enterprises, and a road map for reform that would see disabled people employed in inclusive workplaces. But little progress has been made.
The statistics should make every Australian uncomfortable. Only 34 per cent of people with profound or severe disability are employed, compared with 82 per cent of people without disability.
For those who do find work, the picture is often no better. Under the Supported Wage System, some people with disability legally earn as little as $3.31 an hour. Whatever the historical justification for the scheme, it is increasingly difficult to defend a system that allows Australians to be paid a fraction of the minimum wage because of their disability.
These outcomes are not inevitable. They are a consequence of a disability employment system that ingrains low expectations, fragmented services that don’t deliver for the people who need them most, and outdated assumptions about what disabled people can achieve.
Too often, Australians with high support needs are steered away from mainstream employment before they are even given the opportunity to succeed. Instead, they are channelled into day programs that substitute for work, or sheltered employment settings that offer limited opportunities for career progression, financial independence, or higher wages.
It doesn’t need to be this way. Evidence shows that disabled people with high support needs achieve better employment results when governments prioritise open employment as the first, best option.
Successful systems focus on matching individuals with suitable jobs first, and then providing the training, workplace adjustments, and ongoing support needed for success. Tailored job matching, customised roles, and dedicated school-to-work pathways have all demonstrated their value. But in Australia today, these approaches are the exception rather than the rule.
The federal government’s flagship disability employment program – Inclusive Employment Australia – and the NDIS are both intended to improve disability employment results. But these services operate in silos. They don’t give disabled Australians with high support needs what they actually require to get into mainstream jobs. This leaves many disabled Australians trying to navigate disconnected programs – or falling through the gaps altogether.
The NDIS was expected to transform work opportunities for people with disability. But its impact on employment rates has fallen well short of expectations. Too few people who have high support needs and are on the NDIS get the support they need to enter mainstream jobs. Only about 12 per cent of working-age people with an intellectual disability on the NDIS that were in the labour force were in open employment last year.
Employers also have a responsibility here. Despite growing evidence that inclusive workplaces are more productive and innovative – and do better at retaining their staff – many employers remain reluctant to recruit and retain people with disability, due to misplaced concerns about cost and complexity of doing so.
The government should help build employer capability. It should require large companies to report publicly on how many disabled people they employ. And, as one of Australia’s largest employers, the government should also lead by example, using its own purchasing power to reward businesses that embrace inclusive hiring.
Specialist disability employers also need to be reformed. Australian Disability Enterprises provide valuable work opportunities for many disabled Australians, but low wages, ageing business models, and limited opportunities for advancement leave both workers and enterprises vulnerable.
Reform does not need to mean abandoning these jobs – with the right support, many of these organisations could evolve into commercially sustainable businesses capable of paying fair wages while continuing to provide the support their employees need.
International experience shows this transition to a better and fairer disability employment system is possible. Countries that have shifted away from segregated employment models have demonstrated that higher wages and stronger workforce participation for disabled people can go hand in hand, when governments provide clear direction and sustained support.
A better employment system would not only realise human rights for disabled people, it would also boost the economy. More people in meaningful employment would mean lower welfare payments, increased tax revenue, and a more productive economy.
Australia faces persistent labour shortages, yet tens of thousands of capable disabled people are excluded from the workforce. New research by the Grattan Institute shows that with targeted upfront investment from government, reform would pay for itself within a decade.
Australia can build a better disability employment system that ensures no one is left behind. The only remaining question is whether we have the courage to do it.