Bill Shorten has said most of the federal government’s planned $14.4bn NDIS savings over the next four years will come from changes yet to pass parliament, as he promised to shut down a plan inflation “loophole” before it becomes a “gaping wound”.
The 2024-25 federal budget shows Labor is banking on a total of $27.9bn in savings to fund a number of measures. Of that total, $14.4bn is expected to be freed up by moderating the national disability insurance scheme’s expected growth of $15.9bn to just $1.5bn by 2027-28.
The papers show funding for the scheme will still rise from $44.3bn in 2023-24 to $60.7bn by 2027-28.
The drastic reduction in growth follows a national cabinet agreement last year to an annual growth target of 8% from 1 July 2026, with the states and territories also agreeing in principle to offer more disability services for Australians currently missing out on NDIS access.
But the expected $14.4bn in savings from curbing NDIS growth has also left some participants and the sector wondering whether some will miss out on crucial services in the name of savings.
One peak disability group has said it has “serious concerns” about the changes, while the Greens accused Labor of abandoning people with disability.
Shorten told ABC on Wednesday the scheme was here to stay but it couldn’t continue at its current rate of 20% annual growth.
Two measures, as outlined in a bill revealed in March tasked with getting the scheme “back on track”, would relieve the budget pressures, Shorten said.
The changes, if passed, would allow the government to change NDIS rules to target plan intra-inflation – where participants spend the funds in their plan and then request a top-up.
Shorten accused some providers and support coordinators of telling participants to spend money for supports and items quickly in order to get an “automatic top-up”.
Another proposed change will remove existing itemised budgets, replacing it with a simplified system with flexible supports and stated supports.
About 95% of the $14.4bn in savings over four years will come from these two changes, with plan inflation making up two-thirds of it. Changing how plans are budgeted represents around a third of expected savings.
“The scheme is going to increase in numbers and we’re increasing the investment in it,” Shorten said.
“But I do think that it doesn’t have to grow at 20%, I think that’s over the top and we need to bring it to a more reasonable growth level.”
Shorten said “squirrel theory” – where squirrels stock up on acorns for the winter – was behind the spike in the scheme’s growth in recent years.
“I think it’s led to a premature rush for the exit to try and get a little bit more because people are worried that somehow they won’t get that,” he said. “I just say to people, we want to have a more accountable scheme. The scheme is going to be ongoing.”
Marayke Jonkers, a former Paralympian and the president of peak advocacy group People with Disability Australia, said the forecast seemed to come at the “expense of support and service delivery for people with disability who need it most”.
“Disability representative organisations and people with disability need to not just be in the room, they need to be leading reform,” Jonkers said.
Another representative group, the Australian Federation of Disability Organisations, said it had “serious concerns” about how the intra-plan inflation crackdown might impact participant plans and supports.
The Greens senator, Jordon Steele-John, said the changes would lead to disabled people “not getting the support they need when they need”, accusing Labor of choosing to “abandon” them.