NDIS crisis: The broken promise driving massive cost increases

A former NDIS architect reveals the states’ broken promises have forced 200,000 extra children into the $52bn scheme while providers struggle to survive leaving a disability service shortage.

EXCLUSIVE: The skyrocketing cost of the NDIS can be reined in by forcing the states to live up to repeated promises to provide services outside of the scheme for children with moderate disabilities, industry insiders say.

About 200,000 more people are in the $52 billion-a-year scheme than was planned and they are nearly all kids, recent analysis has found.

A key reason so many children are in the NDIS is that since it began in 2013, states and territories have cut back on services meant to be delivered outside the scheme, called “foundational supports”.

Martin Laverty, who helped design the NDIS and was on its board until 2021, said that after Labor was elected federally three years ago, Anthony Albanese secured an agreement for the states and territories to recommit to foundational supports.

The states and territories had made the same vow when the NDIS was established, Dr Laverty said.

NDIS architect Martin Laverty. Picture: Nikki Davis-Jones

“Yet we are still waiting for the states to deliver on a promise they’ve made – twice,” he told this masthead.

“If they had delivered services outside the NDIS scheme for those with mild and moderate disability there would be only about half a million in the scheme today and its cost wouldn’t have blown out. We’d be in a very different position.”

Foundational supports – which can include low intensity access to speech pathology, physiotherapy, psychology and occupational therapy – are able to be provided at a “fraction of the cost” of NDIS packages, Dr Laverty said.

“For the life of me I can’t understand why the federation hasn’t worked out the path back to having foundational supports in place,” he said.

Dr Laverty’s views were echoed by National Disability Services CEO Michael Perusco, who represents NDIS providers serving 300,000 Australians.

“We need a response at the state level for those who require a lower level of care or support … (which) can be addressed without going onto the scheme,” Mr Perusco said. “That’s a priority for the federal government. They need to negotiate that as a matter of urgency.”

Dr Laverty is now CEO of one of the largest non-profit NDIS providers, Aruma, previously known as the House with No Steps.

He said that instead of containing the overall expense of the NDIS by confronting the blowout in participant numbers, the federal government has imposed a long-running fee freeze which has hurt Aruma and others.

Mitch Antram and his daughter Scarlette, 8, of Port Macquarie, left Forbes due to a lack of services.

Aruma would soon report its fifth annual loss in a row, Dr Laverty said – despite shutting services.

“We have advised the National Disability Insurance Agency of the necessity for Aruma to continue to close unviable services,” Dr Laverty said.

He said nearly all major providers of complex care were running deficits – a claim supported by sector-wide data.

Mr Perusco said quality operators “are at risk of exiting the system”.

Dr Laverty said country towns were being hit hardest by cost freezes, because it was more expensive to provide services due to travel costs. To make matters worse, travel allowances were recently slashed.

Aruma’s most recent closure was to its early childhood intervention service in the NSW central-west town of Forbes.

Locals say before the NDIS, Forbes had adequate access to foundational supports and more complex services.

But in the lead-up to the Aruma’s closure in December, two-year-olds were doing telehealth consultations to New Zealand because it had become financially unviable to bring therapists to the town.

Mitch Antram ended up selling his house and moving away.

Dad Mitch Antram recently moved from Forbes to Port Macquarie because of the difficulty and expense of getting occupational therapy and other help for his eight-year-old daughter, Scarlette.

“It was a constant battle,” Mr Antram said.

“I ended up selling my house and moving away and now we are renting.”

The NDIS bill will be $10bn higher in 2025-25 than it was just two years ago.

Dr Laverty said there is “nothing like (the NDIS) anywhere in the world. But taxpayers’ patience will run out.”

The federal government referred questions to the health department, which said work was underway “towards reaching an agreement with state and territory governments on health and disability reforms over the course of this year.

“This includes joint work to establish additional, co-funded supports that assist with early intervention and capacity building, known as foundational supports,” the department said.

Originally published as NDIS crisis: The broken promise driving massive cost increases