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Labor’s overhaul of the National Disability Insurance Scheme will go ahead with the Coalition’s support after Liberal leader Angus Taylor said he would work with the government to get the $50 billion program in shape so that it delivers for people with profound needs.
South Australian Premier Peter Malinauskas also rallied around Health Minister Mark Butler’s reforms, commending the federal government’s “political courage” and insisting the next step was to develop foundational supports outside the NDIS with the same urgency.
Health Minister Mark Butler and NDIS Minister Jenny McAllister fronted more than a dozen media interviews on Thursday to explain major changes Labor would start making to the scheme as soon as July, which they are describing as a “reset”.
Prime Minister Anthony Albanese defended Labor’s big savings measure in next month’s budget, saying he was proud of the NDIS but that it needed to return to its original purpose of serving people with permanent and serious disability.
“I understand how important is. I’m the son of what was then called an invalid pensioner, a single mum. I understand what it’s like for people to have disabilities, and I will always fight for them to get the care that they need,” he said.
Up to 300,000 participants will be removed from the scheme once new eligibility criteria are introduced in 2028, existing users will have their plan budgets for social and community participation cut, and a raft of integrity measures will be introduced over the next four years.
As the scheme has snowballed to serve 760,000 people and has been on track to cost $70 billion with 900,000 participants by 2030, Butler’s changes are designed to pare the scheme back to 600,000 participants and $55 billion that year. The package will recoup $35 billion in next month’s budget.
But the changes will be implemented in stages. Butler reassured Australian families that the NDIS would continue to be available until new eligibility rules come into effect in January 2028.
“We’re not going to change eligibility and move people off the scheme before we’re confident – and we know the community is confident – there are other systems of support in place,” he said.
Butler’s overhaul will rely on the passage of several new laws – the first of which he will introduce to parliament next month – as well as state governments stepping up to offer more support services to thousands of people outside the NDIS.
Taylor all but guaranteed the Coalition would help Labor push through the changes in parliament.
“We want to make sure that those who need access to this support get it, but this is becoming completely unsustainable for the taxpayer,” he told radio station 2CC.
“We’ll work with Labor on this. We’ve been saying for years we would do that. We haven’t had Labor recognising the situation – now there’s signs that they might, and they’re heading in the right direction. We will work with them. We’ll make this as bipartisan as we possibly can.”
The state-run foundational supports hinge on a $10 billion deal that the Commonwealth and state governments signed in 2023. Butler has since negotiated a $25 billion hospital funding deal with them in exchange for their commitment.
Some states have since held out on giving their full support, and Queensland has accused the government of walking away from people in need.
NSW Premier Chris Minns warned his government would not be able to provide “like for like” support to those being removed from the scheme.
“I understand the reason for reform from the federal government, and I’m not like some other state leaders hammering them for making the changes,” Minns said.
“I understand that it needs to be as best as possible, an affordable program, but we’ve also got to be honest with people … we can’t provide equivalent care in the state system.”
Malinauskas said stepping up state supports to catch people outside the NDIS needed to be a matter of urgency.
“I appreciate the sense of urgency from the federal government to reform the NDIS and bring its cost growth trajectory down,” he said.
“But at the same time, that sense of urgency needs to be replicated with the back-up systems that are invested in, foundational supports and otherwise, so that some of the burden can come off the NDIS, because if that’s not built at the same speed, you run risks.”
Malinauskas said he would make sure that people who weren’t best served by the NDIS were “cared for in an appropriate setting”, although warned about the risk of simply shifting costs from federal to state governments.
“Getting that balance right is important … and that requires a lot of work.”
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Natassia Chrysanthos is Federal Political Correspondent. She has previously reported on immigration, health, social issues and the NDIS from Parliament House in Canberra.Connect via X or email.
Brittany Busch is a federal politics reporter for The Age and Sydney Morning Herald.Connect via email.From our partners
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