NDIS accounts for 93 per cent of nation’s total disability spend

States and local governments have ‘vacated the field’ on disability support, the NDIS review warns, with the scheme now accounting for 93 per cent of the nation’s total disability spend.

NDIS review says 93 per cent of disability funding is now through the scheme.

More than $9 in every $10 spent on disability support across Australia is funded through the ­National Disability Insurance Scheme after state and particularly local governments all but ­vacated the field when the scheme was introduced a decade ago.

While national cabinet’s 8 per cent cost growth target for the NDIS announced in April blindsided the disability sector, it might ultimately prove useful in allaying public concerns that the scheme spending was spinning out of control.

These are two messages delivered by members of the independent NDIS review panel in a webinar on Monday that fleshed out the findings of its recent interim report, including that the NDIS had become an “oasis in the desert” for people with disability needing support.

Panel member Dougie Herd told the webinar that 10 years ago, about $8.2bn a year was spent across the country on disability support, a figure that has now grown to almost $32bn.

But while the original intention was for the NDIS to be part of a broader “ecosystem” of disability support, this had not happened, Mr Herd said.

NDIS advocate Dougie Herd.

“These days, 93 per cent of all the disability dollars that are spent in Australia are spent through the NDIS,” he said.

“And what that means is that gaps have opened up in education, health, housing, transport, all those mainstream services.

“People with disability in the NDIS and people with disabilities generally tell us that those gaps … are wider than they used to be.”

With some 4.5 million Australians reporting that they live with a disability and 600,000 of them being scheme participants, review co-chair Bruce Bonyhady was also critical of the lower levels of government, particularly local governments, for having “vacated the field since the NDIS commenced”.

And while he admitted the sector had been caught by surprise by national cabinet’s announcement in April of an 8 per cent annual cost growth target by mid-2026, he said it might prove “helpful” in the long run. “A target … goes some way to defuse the crises that we have at the moment that NDIS costs are out of control,” Professor Bonyhady said.

Professor Bruce Bonyhady.

In October, NDIS Minister Bill Shorten announced Professor Bonyhady and co-chair Lisa Paul would lead a scheme review amid growing concerns about soaring costs and poor experiences of participants.

NDIS costs were rising by 14 per cent a year, and within a decade were tipped to reach more than $90bn. Participant numbers were projected to reach over a million, and many had complained about traumatising experiences dealing with the scheme’s administrative body, the National Disability Insurance Agency, when applying for or renewing NDIS plans.

Even as the review was under way, Mr Shorten in April said the NDIS had “lost its way” and needed a full “reboot”, with the Albanese government’s May budget committing $900m over four years to improve support for participants and build capacity.

That same month, national cabinet announced the new annual cost target.

In an interim report in June, the NDIS review identified five key reform priorities: addressing the “oasis in the desert” issue; determining the parameters of the “reasonable and necessary” supports the scheme should fund; exploring why more children than anticipated are entering the scheme; improving competition and markets; and delivering overall sustainability.

Professor Bonyhady said he and his colleagues were looking for ideas from the community on how to reset the NDIS to ensure it was sustainable.

The review is due to report to the government in October.