The National Disability Insurance Scheme was sold to Australians as a landmark reform, an insurance model that would give people with significant and permanent disability genuine choice and control over their lives.
Thirteen years later, Health Minister Mark Butler has announced changes that will see budgets cut, 160,000 people removed from the scheme, and the foundational philosophy of participant choice constrained in ways that would have been unthinkable when the NDIS was launched.
All of this is occurring during a cost-of-living crisis, when disabled Australians are already among the most economically vulnerable people in the country.
Butler announced that NDIS spending will grow at approximately 2% annually over the forward estimates, half the current inflation rate.
At $50 billion this year, projected to reach only $55 billion by 2030, the maths is straightforward: in real terms, the scheme is shrinking.
When pressed on whether this constitutes a cut, Butler conceded: “You can match this against inflation which is jumping around a bit.”
For participants whose support hours, therapies and community access are tied to these budgets, there is nothing ambiguous about it. Reduced funding means reduced support.
The most immediate impact will be felt in social and community participation, the stream that funds activities enabling people with disability to engage with their communities, attend events and maintain social connections.
Butler announced plans to:
The Minister justified this by noting spending had “tripled in five years” and citing examples of support workers scrolling their phones while participants sat unattended.
But cutting budgets does not fix poor-quality support work. It simply means fewer hours available, and less community participation for people who already face significant barriers to social inclusion.
Disability advocates have long warned that social isolation is one of the greatest challenges facing Australians with disability. Loneliness, depression and declining mental health are well documented consequences of reduced community engagement.
The Government’s response to rising costs in this area is to cut access, precisely the wrong approach to a problem that requires quality improvement, not rationing.
Perhaps the most consequential change is the shift from diagnosis-based eligibility to functional capacity assessments.
Butler confirmed that the scheme’s participant numbers will be reduced from 760,000 to approximately 600,000 by the end of the decade. That is 160,000 people who will no longer be on the NDIS.
The Minister insisted this is not about targeting specific diagnoses, but acknowledged that people with autism who have “lower support needs” will be disproportionately affected, simply because they comprise a large proportion of current participants.
Every current participant will face reassessment under the new criteria, beginning January 2028. Those deemed to have “lower support needs” or “higher functional capacity” will be exited.
Where will they go?
Butler pointed to “foundational supports”, programs to be developed with state governments using $6 billion allocated by National Cabinet. But these programs do not exist yet. The agreement to fund them was reached in 2023. Implementation remains incomplete.
Disability advocates have consistently warned against exiting people from the NDIS before alternative supports are operational. The result is predictable: people will fall through gaps, losing access to supports they depend on, with no adequate replacement.
When the NDIS was designed, its core philosophy was that participants, not bureaucrats or providers, would control their own supports. This was the revolutionary promise: disabled Australians would decide what help they needed and who would provide it.
Butler’s changes systematically constrain that philosophy:
When directly asked whether the Government was accepting it could no longer meet the original promise of the NDIS, Butler rejected the framing but confirmed the practical reality: “We want to commission those services… there will be a panel, there will still be choice and control, but it won’t be this free for all market.”
Describing participant choice as a “free for all” reveals how far the Government’s thinking has shifted from the scheme’s founding principles.
These changes arrive as Australians face the most significant cost-of-living pressures in decades. Inflation has eroded purchasing power across the economy. Rent increases have outpaced income growth. Essential costs continue to rise.
For NDIS participants, who have lower average incomes, higher rates of unemployment and greater dependence on fixed supports, these pressures are acute.
When asked directly about cutting support during a cost-of-living crisis, Butler offered little reassurance: “We’ve worked very carefully to identify where we think we can control spending growth.”
He confirmed that essential daily living supports, including accommodation, personal care, transport and hygiene, would not be subject to immediate controls. But the cuts to social participation, plan management and support coordination will have direct impacts on how participants navigate their daily lives.
Fewer support coordination hours means less help accessing services. Reduced plan management means greater administrative burden on participants and families. Lower social participation budgets means less community engagement and greater isolation.
Butler dedicated significant portions of his speech to organised crime, fraud and “shonks and rorters” exploiting the scheme.
These are legitimate concerns. Criminal exploitation of the NDIS is real, documented and requires serious enforcement responses. The Australian Criminal Intelligence Commission has provided sobering evidence of cash kickbacks, intimidation and money laundering through NDIS funds.
But the $13 billion “blowout” Butler cited is not primarily driven by fraud. It is driven by:
By repeatedly linking ordinary cost growth to criminal activity, the Government creates political cover for cuts that extend far beyond fraud prevention.
The digital payment system and expanded registration requirements Butler announced are reasonable integrity measures. But they do not justify reducing social participation budgets or removing 160,000 people from the scheme.
Butler’s reforms depend heavily on state governments implementing foundational supports for people exited from the NDIS.
Yet state cooperation remains uncertain. Queensland is still not fully engaged with the Thriving Kids program. Other states have historically resisted disability funding responsibilities.
When asked whether funding would be withheld from non-compliant states, Butler was non-committal: “I take this as the usual sort of arm wrestling that happens between governments.”
For disabled Australians, this “arm wrestling” has real consequences. If foundational supports are not in place when eligibility tightens, people will simply lose access to support, with no guarantee of alternative assistance.
The Government’s timeline, eligibility changes from January 2028 while foundational supports are still under development, creates obvious risk. People may be exited from the NDIS before the systems meant to support them are operational.
Stripped of political rhetoric, here is what NDIS participants face:
| Change | Impact |
|---|---|
| Social participation cut to 2023 levels | 16% average reduction in community engagement budgets |
| Plan manager/coordinator funding cut 30% | Fewer hours of assistance navigating the scheme |
| Functional capacity assessments | 160,000 people removed from scheme by 2030 |
| Commissioned SIL services | Reduced choice of accommodation providers |
| Restricted reassessments | Harder to adjust plans when circumstances change |
| 2% annual growth (below inflation) | Real terms reduction in scheme value |
Butler’s core argument is that without these changes, the NDIS will become unsustainable, both fiscally and in terms of community support.
There is truth in this. The scheme has grown faster than projected. Community sentiment has shifted, with polling showing declining confidence. Taxpayer support cannot be taken for granted indefinitely.
But sustainability is a choice about priorities, not an immutable constraint. Australia remains a wealthy country capable of funding comprehensive disability support. The question is whether we choose to do so.
The Government has chosen to redirect resources away from disabled Australians, during a cost-of-living crisis, before alternative supports are operational, and in ways that constrain the choice and control that made the NDIS revolutionary.
Minister Butler closed his speech with characteristic aspiration: “We can make sure that like Medicare, the NDIS is still changing lives three decades from now.”
For the 160,000 people facing exit from the scheme, and the hundreds of thousands more facing reduced budgets and constrained choices, that promise rings hollow. The NDIS may survive these changes. Whether it will still transform lives in the way its architects intended is far less certain.
I agree with this as much as some people disagree. For example, I know someone with minor behavioural issues who functions very well, is on a disability pension, and can hold down a job, but tells me he doesn’t want to work. He receives 44k p/a for his support package and a pension, so he can take a trip away each month with his support worker. With his 28k pension p/a and the NDIS package, it costs taxpayers around 72K p/and more.
We need to support people with real disabilities and to support aged care more.
Troy, I also know of a NDIS recipient who falls in the same category and should NOT be receiving disability benefits from NDIS. I dont agree with much of what Butler is saying but I think your last sentence says it all. I would have a crack team of investigatgors with a medical background to check the bona fides of everyone on the NDIS. It was meant for those who really are truly disabled and need physical and medical assistance in order to have some quality of life. It was not meant to provide personal trainers, recreational trips, buying sewing machines and all other manner of things which are simply lifestyle improvements not physical and mental needs. Unfortunately, when there is no real accountability, understanding of what a disability means and the wrong people administering the NDIS, we will always have a problem. I have no time whatsoever for politicians, economists and bureaucrats because they understand nothing other than polishing their careers and pursuing the financial gains it provides. Any project manager in the commercial world, and I was one, would be immediately terminated if they displayed one iota of the incompetence that these public servants display. All they know how to do is to raise taxes in order to balance the books and bury their wanton waste of taxpayers money and their abysmal inability to manage anything well. And what does that achieve! This period of governance will go down in history as the absolute worst for Australia and its citizens. The elderly and disabled will always be looked upon as 3rd drawer citizens and that is why no due care or attention is paid to creating a model of care that is workable, fair and effective.