How Albanese’s wingman is now Labor’s $220b minister

Labor minister Mark Butler’s expanded portfolio of health, disability and ageing will put him in charge of about $220 billion in annual government spending – more than a quarter of the federal budget.

After flying across the country alongside Prime Minister Anthony Albanese during the election campaign, Butler’s elevated role will require him to jump straight into tense negotiations with states and territories over a new system that must take pressure off the ballooning National Disability Insurance Scheme.

After playing a lead role in the campaign, Health, Disability and Aged Care Minister Mark Butler will control more than a quarter of the federal budget.Credit: Alex Ellinghausen

This “foundational support” system was supposed to start in July, but a deal is yet to be struck.

Butler will need to help design this new scheme while pushing through major changes as minister for health and aged care: he has promised to restore GP bulk-billing rates to 90 per cent by pumping billions more money into Medicare, and update aged care funding to prepare for Australia’s ageing population.

Individually, the three policy areas are already among five of the government’s most expensive and fastest-growing programs: the NDIS costs about $52 billion, while health spending is $125 billion and aged care is $42 billion. Together, they will make up more than 28 per cent of federal spending in the 2025-26 financial year.

By the next election, their combined cost will be almost $250 billion, according to latest government forecasts.

Senator Jenny McAllister, left, being sworn in as the new NDIS minister in the Labor government.Credit: Alex Ellinghausen

“Our task is crystal clear: to strengthen Medicare, protect the PBS, deliver generational reform to aged care, and secure the future of the NDIS,” Butler said last week.

The NDIS serves almost 700,000 people. But the scheme has threatened to buckle under its own weight as participant numbers surpass original expectations, making it one of the Albanese government’s most significant and politically sensitive policy challenges.

Former Labor leader Bill Shorten started bringing down the scheme’s growth trajectory to a goal of 8 per cent a year, but success relies on state governments taking pressure off the scheme by launching new services, particularly for children with autism and developmental delays.

Day-to-day responsibilities will be managed by new NDIS Minister Jenny McAllister, but both ministers will attend the first meeting with state disability ministers, expected next month where those foundational supports are being designed.

Butler has already gained a bargaining chip over the states by holding out on a five-year hospital deal until they land a successful outcome on disability reform. He must also respond to the Disability Royal Commission, which made 222 recommendations in 2023.

The NDIS and disability policy will be moved from Tanya Plibersek’s Department of Social Services to an expanded Department of Health, Disability and Ageing. Former health department secretary Stephen Duckett said there should be advantages to bringing the portfolios together.

One example was having the same minister leading both health and disability negotiations with the states, since they were linked. “There are many synergies,” he said. “[Another] example, mental health and psychiatric disabilities can be covered by the NDIS or Medicare and other programs.

“Historically, there are many similarities between disability policy, which has traditionally had a [human] rights base to it, and aged care policy, which is beginning to have one. They can learn from each other; having those sorts of concepts before Butler at the same time is a good thing.”

Duckett said the government would need to make sure it avoided medicalising disability by bringing it into the health portfolio – something the community has been fighting against for decades.

Martin Laverty, formerly a National Disability Insurance Agency board member and chief executive of Catholic Health Australia, said the merger would work well so long as the government did not start from scratch.

“There was a royal commission, the NDIS review, and the road map to reform is sitting on the table to be picked up and implemented,” he said.

Laverty, who now runs NDIS provider Aruma, said an immediate task for Butler and McAllister was improving the participant experience and registering providers. A second was overhauling the pricing regime for NDIS services, and a third was establishing the foundational support system so that the NDIS became sustainable for taxpayers.

“The states and territories, through their interactions with new minister and department, need to resolve the uncertainties about their role in foundational supports,” he said.

Laverty said the merger would also help to streamline pricing of health and disability services. Until now, the price set for NDIS services has been out of step with similar health services.

“The independent Hospital and Aged Care Pricing Authority has a methodology that has resolved the issues in pricing hospital services, and has improved issues in aged care. We need that same expertise applied to the NDIS,” he said.

“That way, you’ll be providing NDIS participants with the safest service, and a viable market for the NDIS to achieve its purpose.”

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