Don’t listen to disabled groups and keep slowing growth: bureaucrats’ frank warning to Labor ministers

Labor must ignore disabled Australians’ pleas to slow reforms to the NDIS if the government wants to hit its reduced growth targets, bureaucrats have warned in a frank reality check.

NDIS Minister Mark Butler. Picture: NewsWire / Martin Ollman

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Labor must ignore disabled Australians’ pleas to slow reforms to the NDIS if the government wants to hit its reduced growth targets and stabilise the bulging disability scheme, bureaucrats have warned their new ministers in a frank reality check for the $52bn program.

As part of plans to reduce the National Disability Insurance Scheme’s growth by nearly $20bn over the next four years, the disability agency advised Labor not to bow to pressure from those calling for a slower rollout of reform should the government hope to hit its goal of reducing the annual growth of the scheme down to 8 per cent from July 2026.

The clear-eyed incoming minister brief, obtained under Freedom of Information, comes as Anthony Albanese and Jim Chalmers put economic reform at the heart of their second term, but without having yet raised spending restraint as opposed to measures such as tax reform as a means to balance the budget.

While the National Disability Insurance Agency noted the growth of the scheme was already down to about 10 per cent from highs of 20 per cent a year, it also warned the number of participants entering the scheme each year had “not stabilised”.

“The disability community … does not support the government’s timeline for NDIS reforms; however, it is critical the Agency remain on the timeline if we are to achieve national cabinet’s annual 8 per cent growth target,” the NDIA brief said.

“The scale of change also has the potential to be challenging for some cohorts.”

The candid brief comes despite the NDIA telling new ministers Mark Butler and Jenny McAllister multiple times in the rest of the document that the voices of disabled Australians must “continue to be at the heart of any changes to the NDIS”.

“People with disability have sent a clear message to government: nothing about us without us,” the NDIA brief said.

Junior NDIS Minister Jenny McAllister. Picture: NewsWire / Martin Ollman

A number of changes already implemented by the government had also seen “much angst” in the disability community, the brief noted.

“The action which calls for ‘participants who need 24/7 living supports being generally funded at a 1:3 support ratio’ … has caused much angst in the disability community, as it has brought back fears of returning to the group homes of the past,” the document said.

Disability groups blasted the revelations on Wednesday.

“The suggestion to press ahead with a reform timeline that the disability community does not support is troubling, particularly when it’s being justified by a need to meet a financial target rather than the needs of people with disability,” Children and Young People with Disability Australia chief executive Skye Kakoschke-Moore said.

“The brief confirms what families are already experiencing: reforms are moving too quickly, without enough communication or clarity, and before alternative supports are in place.

“If the government is serious about rebuilding trust and delivering better outcomes, it needs to respond to and address these concerns while it works towards its 8 per cent target.”

The Australian Federation of Disability Organisations said it was “deeply concerned by the NDIA’s assertion that, despite acknowledging the disability community does not support the current reform timeline, the Agency intends to proceed regardless to meet an arbitrary financial target set by national cabinet”.

“We would urge the government and Agency to work with us, not around us, to get this right (and) … ensure that any reforms are built on genuine partnership, transparency and a commitment to the Disability Royal Commission’s recommendation of embedding co-design across all government processes,” AFDO chief executive Ross Joyce said.

Mr Butler said he was committed to continue working closely with participants and the disability community to implement reform and changes in “a considered way”.

“Their experience and views are critical to getting these reforms right,” a spokeswoman for Mr Butler said. “The government’s task is crystal clear, to secure the future of the NDIS.”

Mr Butler’s spokeswoman noted Labor was also working with states to finalise the separate system of health and education supports for those with disabilities such as mild autism, rather than having the NDIS remain the only lifeboat in the ocean. 

While Labor is seeking to improve early intervention for children with developmental delays such as autism in order to ensure fewer end up relying on the NDIS, the current number of autistic participants on the scheme nearly 40 per cent of the 717,000 people accessing the NDIS.

A further 43 per cent of all participants are under 15, with 23 per cent under the age of eight.

The latest uproar comes after the Prime Minister this month said he was not “happy” with figures showing 11 per cent of all six-year-olds were on the NDIS.

The NDIA has also told Mr Butler – who added the NDIS to a mega portfolio including health and aged care after Labor’s sweeping May election victory – that despite being on track to meet the 8 per cent target set by national cabinet in 2023, it had still not stabilised the number of people joining the scheme or the cost of NDIS support services.

“The numbers of participants entering the scheme each year have not stabilised, and growth in expenses for participant supports continue to grow at a rate higher than general inflation,” the brief states.

The NDIA noted that the approach of setting stricter price limits for NDIS services and equipment could risk providers leaving the market.

“NDIS provider representative organisations have been lobbying for increases in price limits for disability support, therapy and intermediaries. There is always a risk providers withdraw from the market where price limits are deemed to be inadequate,” the NDIA brief stated.

“However, the NDIA monitors market dynamics as part of setting annual price limits and notes the current rate of registered providers leaving the market remains relatively stable.”

While there has not yet been a marked increase in providers exiting the market, the assessment by the disability agency was made before a major recommendation by the independent pricing agency on June 11 to slash the maximum hourly service fees providers such as physiotherapists and dietitians could charge participants.

Opposition assistant NDIS spokesman Phil Thompson said the Coalition’s primary concern was that the government was not “providing clarity and certainty” as part of its reform process.

“If the government expects NDIS providers and recipients to deal with their reform timeline, then they must also do the hard work necessary to ensure that it can be safely achieved,” Mr Thompson said.

“The government must ensure that they implement their reforms safely and effectively to protect against any unintended negative consequences for Australians living with a disability who rely on the system.”

Despite the progress made in curbing the scheme’s annual growth, the NDIA warned this would be put at risk should the government not provide more funding certainty to the Agency.

“The NDIA is currently funded year on year and, as a result, faces significant budget challenges, which, if not addressed, will hinder ongoing reforms and the level of service delivery,” the brief stated.

“These challenges include: insufficient future funding for service delivery and enabling operations, funding uncertainty for current reforms and efficiencies under way, including future investment in fraud and integrity activities, (and) additional investment requirements for the frontline workforce.

“Without sustained funding, current efficiencies and savings will be lost and directly impact the NDIA’s ability to achieve the target. Decreased agency efficiency and increased cost inefficiencies will also put at risk any sustainability progress gained to date.”

Ms Kakoschke-Moore said there was “universal concern” in the disability community over the measures being used to curb costs, such as the increase in reassessment letters sent by the NDIA in recent months that had seen thousands of participants removed from the scheme.

As part of efforts to rein in costs, the crackdown on fraud is estimated to save the government $1.3bn in benefits between July 2024 and June 2028, with scheme expenses down $500m in the 2024-25 budget compared to previous estimates.