Ballooning NDIS ‘coming under control’, but key reforms in flux

The federal budget will receive a $700 million boost off the back of lower-than-expected NDIS spending, but major cost pressures remain on the scheme as Labor struggles to secure a key funding deal with states.

NDIS Minister Amanda Rishworth has revealed year-on-year spending growth had reduced to 10.3 per cent, lower than the 22 per cent when Labor came to power.

Amanda Rishworth has taken over from Bill Shorten as the minister in charge of the NDIS.Credit: James Brickwood

Paramount to Labor’s NDIS plan is a target to limit yearly spending growth to eight per cent, which is forecast next year and curtail expansion of the $47 billion program that could outstrip the age pension in a decade. Prime Minister Anthony Albanese had previously said the scheme was “on the brink” and financially unsustainable with deficit budgets projected for years to come.

The newest NDIS spending data, provided to this masthead ahead of its public release on Monday, is being cited by Rishworth as proof that former minister Bill Shorten’s spending crackdown is working. Those changes from last year included rooting out fraud and locking in personal plans – which average around $65,900 per year – for five years rather than increasing them yearly.

“A sustainable NDIS provides certainty for the Australian community and those who rely on it now and in the future,” Rishworth said.

“The NDIS has broad support and is an integral part of our social infrastructure. While we are delivering a sustainable NDIS that can endure for generations, solely focusing on the finances fails to celebrate the scheme for what it is – a world-leading social initiative.”

Opposition NDIS spokesman Michael Sukkar says Labor is struggling to rein in the program.Credit: Alex Ellinghausen

More than 706,000 Australians are now on the NDIS, a nine per cent uptick from the same time last year. It has cost $30.2 billion in the financial year to date, compared with $27.6 over the same period last financial year.

The improving projections have led to the forecast cost of the NDIS in 2033-34 to drop from $100.5 billion to $92.7 billion, though important policies to keep costs down are still in flux.

One of those changes involves shifting out of the scheme supports for children with mild autism that have added huge costs to the NDIS. The prime minister and state and territory leaders agreed to provide these services through schools and childcare centres rather than the NDIS on a 50-50 cost basis between state and federal governments. However, a funding agreement has not yet been struck despite a commitment to secure a deal by July.

Opposition NDIS spokesman Michael Sukkar said the government was not succeeding in limiting fraud, adding that waiting times had increased and disability plans were being cut for deserving participants. His remarks on people being unjustly excluded from the scheme highlights the political sensitivity of tightening eligibility requirements.

“The government claims it’s powerless to stop foreign criminal cartels stealing from the scheme. This perhaps explains why the growth rate of the scheme is exceeding the 8 per cent growth rate promised,” Sukkar said.

“It’s evident that the NDIS has never been worse for Australians with a genuine disability, and never been better for criminals and fraudsters rorting taxpayers’ funds.”

Whilst Shorten last year cut out inappropriate funding of items such as overseas trips and sexual services, Labor has shied away from making more substantial changes to limit the types of disabilities that qualify for payments.

Figures from late 2023 showed 11.5 per cent of boys aged 5-7 were on the NDIS as autism diagnoses exploded and sparked debate about whether the NDIS should be reserved for people with more severe problems.

Big spending on the NDIS, aged care and childcare has contributed to growth in government spending at a time when an inflation shock has demanded lower government outlays.

The NDIS was launched in 2013 and it was believed at the time the scheme would grow at a peak of 4 per cent per year. This spiralled to more than 20 per cent under the former Coalition government, and the scheme is forecast to cost $92.7 billion by 2033-34.

In one of his last interviews before retiring in January, Shorten told this masthead that 500,000 people were deriving income from the NDIS, which he claimed placed the transformation of the caring economy alongside Medicare and superannuation as top Labor reforms.

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