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Two Labor MPs who are doctors want their government to overhaul the National Disability Insurance Scheme, warning that public support would crumble if the $50 billion program isn’t redesigned.
The NDIS is coming under intense scrutiny ahead of the May budget, where driving down the scheme’s growth trajectory to 6 per cent or lower will be a centrepiece of the government’s savings plan.
Labor backbenchers Michelle Ananda-Rajah and Mike Freelander on Monday added to a debate over the scheme’s future as new data reveals people with autism or development delay who have lower support needs now make up more than 40 per cent of NDIS participants.
The cost of the NDIS, which was intended to serve people with the most profound disabilities, is still growing at more than 10 per cent a year, making it the federal budget’s second fastest-growing program. Wide eligibility criteria and scarce support outside the scheme have made it the only option for many people.
This will hit a crunch point at next month’s budget, with Health Minister Mark Butler mulling major changes that will help Labor deliver savings as the government seeks to improve its bottom line in an uncertain economy.
Ananda-Rajah, who is also a physician, said on Monday the government had been trying to renovate the NDIS for four years, “but always seem to be chasing our tails”.
“We are grappling with trying to strengthen integrity in what is a fundamentally flawed program,” she said. “Consideration should be given to redesigning the scheme by pulling elements from Medicare – accountability, pricing, internal and external checks and balances – to ensure integrity and professionalism go hand in hand while delivering value for money.
“I am concerned that the medicalisation of the normal range of neurodiversity has resulted in a whole new industry, and this should be the coalface of eligibility reform.
“Right now, [the scheme’s] social licence is crumbling, and it is coming with too great an opportunity cost. An unsustainable NDIS is robbing us of the fiscal space to make long-term investments in research, development and innovation that would strengthen our economic resilience and lead to a sustained prosperity.”
Freelander, who still works as a pediatrician, agreed the scheme was not working as it should be, and supported moves to bring it further into line with its original purpose and guarantee support for people with severe disabilities.
“There’s no question the system needs to be redesigned,” he said. “It doesn’t mean people with lower to mild needs don’t need support. They obviously do. The problem is the scheme will lose its social licence unless we can make it affordable.
“It’s a difficult thing to address after the scheme has grown in a disorganised and dysfunctional way for over a decade, without informed oversight.”
Disability providers are bracing for major decisions about the future of the NDIS in the budget, as this masthead reported on Monday, and large non-profits are welcoming a debate they hope will steer the NDIS back towards focusing on people with the most profound needs.
New data obtained by this masthead from the National Disability Insurance Agency reveals there are about 310,000 people on the scheme with autism or development delays who are classified as having mild or moderate support needs, in a program that now services 760,000 people.
A key driver of surging participation numbers has been the reliance on NDIS support by people with autism, which continues to climb each quarter.
Participation among autistic people grew by 24 per cent last year, and 14 per cent the year before, now making up 43 per cent of the scheme’s population. There were 324,200 participants with autism as their primary disability in December 2025, up from 261,600 in December 2024 and 230,100 in December 2023.
While some people in this group have very high support needs requiring intense levels of care, the majority have what the scheme classifies as mild or moderate support needs.
The data supplied from the NDIA shows there are 93,000 people over 15 years old with mild and moderate support needs for autism on the scheme. This is on top of 120,000 children under eight, and 94,000 children between nine and 14, who have low or moderate support needs for either autism or development delays.
Together, they make up about $5 billion from the scheme’s budget, or roughly 10 per cent.
Labor wants to divert autistic children with mild or moderate needs from the scheme to a new support system called Thriving Kids, which has been allocated $4 billion from combined state and federal budgets over five years. The new scheme will start rolling out in October, and should be fully functioning by 2028, at which point eligibility criteria for NDIS support are expected to change.
But the more pressing need for budget savings will require the government to take other steps, and Butler is considering broader structural changes to either eligibility or the way the NDIS funds supports, as well as a stricter registration regime to ensure more integrity among providers.
The Coalition’s NDIS spokeswoman, Melissa McIntosh, said she feared the government was targeting vulnerable Australians because it was struggling to manage the economy, and questioned its plans for reaching its growth target.
“They are going to arbitrarily reduce the growth rate in a spreadsheet to artificially make the budget look better,” she said.
“The Albanese government has already set an 8 per cent growth reduction target they aren’t even achieving, and they want to reduce it to 5 to 6 per cent with no detail about how they are going to do it.
“Making sure the NDIS is financially sustainable is vital, but we can’t forget that there are real people who rely on the NDIS for support.”
But Ananda-Rajah said curbing inefficient NDIS spending was essential to create space in next month’s budget for investment in productivity, such as the Ambitious Australia plan released last week.
“Those investments must be made now, not in five or 10 years, given the lead time from bench to bedside, or from research to start-ups,” she said. “There are no shortcuts to productivity. You’ve got to play the long game, but that means backing in blueprints with dollars, not rhetoric.”
She said there were parallels in the health system that the NDIS could draw from, such as when care regimes for complex cases were determined by groups of healthcare professionals in multidisciplinary meetings.
“It removes the variability, and acts as a constraint on inappropriate and unaffordable care. It would almost overnight slow the ingress of participants onto the scheme, if such measures were introduced,” she said.
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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.From our partners
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