States on Edge as NDIS Cuts Loom in Federal Budget
Treasurer Jim Chalmers has declared that cuts to the National Disability Insurance Scheme (NDIS) will be "easily the most important part of the savings package" presented in the upcoming federal budget. Speaking on Monday, Chalmers emphasised that the NDIS is "growing too fast for Australians to afford," highlighting extensive deliberations within the government to address its sustainability.
State Concerns Over Unclear Changes
Government sources from multiple states have expressed growing unease about Labor's efforts to trim NDIS expenditures. Officials have reportedly sought clarification from Health Minister Mark Butler regarding the planned savings, particularly ahead of his scheduled address to the National Press Club in Canberra this Wednesday. The states are worried about the breadth of potential changes and any new financial burdens that might fall on them, especially after written inquiries to Butler's departmental chief, Blair Comley, were rebuffed.
Western Australia, acting as chair of the Council of the Australian Federation, has communicated concerns from disability ministers about structural adjustments in recent days. Several states reported feeling "blindsided" when Butler previously announced a national scheme for foundational supports for children with autism and developmental delays, replacing state-led programs without prior warning.
Budget Details and Co-Design Process
Chalmers indicated that he would brief state treasurers, rather than disability ministers, on Tuesday to discuss the budget cuts. The NDIS, which currently costs $52 billion and grew by over 10.3% last year, is projected to reach $63 billion by 2028-29. Butler and NDIS Minister Jenny McAllister aim to reduce its growth rate to between 5% and 6% annually while maintaining essential services for individuals with permanent and significant disabilities.
Butler has assured that any modifications will involve a co-design process, with all states and territories agreeing to a "package deal" that includes increased hospital funding in exchange for NDIS reforms. As part of broader savings, the federal government and states have committed $4 billion to the Thriving Kids program, with costs split evenly. Victoria is close to finalising its agreement, while Queensland has yet to sign on.
Political and Community Reactions
The proposed trajectory has sparked concerns across the disability community, state government ministers, and even former NDIS minister Bill Shorten, who helped establish the scheme. Prime Minister Anthony Albanese has ruled out introducing new means testing for the NDIS, reaffirming Labor's commitment to universal access rules. However, the government is considering strengthening registration requirements for NDIS providers to enhance compliance and probity, potentially weeding out fraudulent operators. Mandatory registration for supported living service providers is set to begin on 1 July.
Behind the scenes, Labor has quietly formed the NDIS Sustainability Taskforce within the health department, led by former Treasury official Anthea Long, to drive budget savings. This move underscores the government's focus on ensuring the NDIS remains viable for future generations while addressing fiscal pressures.
