Premiers urge Shorten to put the brakes on NDIS changes

State premiers have accused Bill Shorten of making hasty changes to the National Disability Insurance Scheme, warning that Australians with a disability will be worse off unless he slows his plans to clamp down on the $44 billion program.

In a rare joint submission outlining their fears, state and territory leaders said the federal NDIS minister had not made clear who would be in or out of the scheme, nor which supports people would have access to, before he introduced new laws to parliament in March.

(Left-to-right, top-bottom): Chris Minns, Roger Cook, Peter Malinauskas, Jacinta Allan, Jeremy Rockliff and Steven Miles. While the states last year agreed to work with the federal government on a reboot of the NDIS, they have become increasingly outspoken about their financial exposure to its unknown costs.Credit: Fairfax Media

“The bill will make immediate and fundamental changes to the way the NDIS operates, including how access to the scheme is determined, how participant needs are assessed and how participant budgets are set,” the leaders said.

“We are deeply concerned that this way of going about the reform – including through this bill – will lead to worse outcomes for more Australians with disability and their families.”

Shorten’s proposed laws, which give significant new powers to the National Disability Insurance Agency and its minister, will this week be scrutinised by a Senate inquiry.

Some of the major changes include requiring participants to complete a needs-based assessment that calculates their plan budgets with a new methodology. People will then receive a capped budget that lasts up to five years but has strict limits on how much funding can be spent annually.

The laws will also enable the government to create an explicit list of NDIS services that are “in or out”, which will narrow the scope of support the Commonwealth is obliged to provide, while the agency will be able to revoke participants’ access to the scheme and remove children if satisfied that early interventions have been successful.

The new measures respond to last year’s NDIS review, which said the spiralling scheme – the federal government’s second-most-expensive this financial year – needed to return to its original purpose of providing for Australians with profound disabilities. It called for state and territories to step up their offerings for 2.5 million people with less intense needs through a new system of “foundational supports”.

While the states last year agreed to work with the federal government on a reboot of the scheme, they have become increasingly outspoken about their financial exposure to its unknown costs.

They have now banded together in a submission to the Senate inquiry – through the Council for the Australian Federation, which represents all state and territory leaders – to say there has not been enough consultation and the changes are happening too fast.

The leaders accused the federal government of swiftly “pursuing changes to constrain the NDIS” without first defining or designing the broader disability ecosystem, including the new foundational support system that is intended to operate through schools and other services.

“If we don’t do this carefully, and in tandem with broader improvements to the disability ecosystem, people with disability will end up in our hospitals or other settings that are unsuitable for their needs,” they said.

“This creates a risk of emerging service gaps for people with disability. For example, if changes are made to limit eligibility for particular cohorts, such as children with autism, before the design and commencement of any alternate services outside the NDIS.”

They were also concerned that the design of the new laws gave the federal government unilateral decision-making powers over the scheme, and diminished the role of states and territories.

“[The bill] provides for broad powers to redraw the boundaries between the NDIS and other service systems, in a manner that undermines the in-principle agreement between the Commonwealth and the states and territories on NDIS reform and foundational supports.”

The premiers said they were surprised that Shorten had sought to make legislative changes that narrowed the scheme’s scope before the new foundational support system had been created.

“To date, there has been no decision as to the specific services that will be provided as foundational supports, or the client groups who should access them,” they said.

“For example, at the moment, it is not clear what the difference in application pathway, assessment, and supports will be for a child with autism who will be applying for NDIS in 2025, versus a child with the same level of need who had applied in early 2024.

“States and territories expect this level of detail will be worked through later this year – but it is not available now.”

They urged the federal government to consult more with states and the disability community and make several amendments to the laws, including delaying their start date.

Shorten has previously tried to shore up the states’ support for his changes.

“I think the states are worried that, all of a sudden, tens and hundreds of thousands of people are going to somehow not be on the NDIS, and are going to turn up tomorrow looking for support from the state governments. Nothing could be further from the truth,” he said in March.

“We have forecast that with the reforms ... we will see about an 8 per cent annual growth in the scheme in about three years ... What that means, is there’ll be more people on the scheme than there are now. But what we want to do is just make sure that we’re getting the right assistance to meet people’s actual support needs.”

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