Disability advocates have warned the Albanese government’s planned overhaul of the NDIS risks repeating the very policy failures that led to the system’s creation in the first place.
Treasurer Jim Chalmers announced last week that Canberra would slash $36.2 billion from the scheme over the next four years, arguing it was necessary to rein in spiralling costs.
“It is all about saving the NDIS from itself,” he said.
However, Muriel Cummins, an occupational therapist and member of grassroots campaign Every Australian Counts, cautioned that while the reforms may reduce visible government spending, they risk increasing costs elsewhere.
“Beneath the language of sustainability lies a more uncomfortable question: whether Australia is once again mistaking cost displacement for economic reform,” she said.
Ms Cummins pointed to Australia’s deinstitutionalisation era between the 1970s and 1990s, when large psychiatric hospitals and disability institutions were shut down without adequate investment in alternative community support systems.
“As facilities closed, governments massively reduced direct expenditure on disability and mental health care,” she said.
“The promised investment in community support, however, often failed to materialise.
“Over time, the consequences emerged elsewhere: in overcrowded emergency departments, homelessness services, prisons and exhausted families carrying responsibilities once held by the state.
“Deinstitutionalisation reduced visible expenditure in one area while dispersing the human and financial costs elsewhere.”
The cuts to the NDIS were the largest savings measure in Jim Chalmers’ fifth federal budget.
Changes to eligibility requirements will see 160,000 fewer participants in the scheme over the next four years as the government attempts to reduce annual growth to around 2 per cent by 2030 in a bid to deliver billions in savings.
“When support is withdrawn, need does not disappear,” said Ms Cummins.
“Australia learned this during deinstitutionalisation. Governments reduced direct institutional expenditure while underestimating the downstream social and economic consequences of unsupported lives.
“The fiscal savings were immediate and measurable. The detrimental decades-long impacts emerged progressively across health, mental health, child-protection, justice and welfare systems.”
The government said children who are no longer eligible would instead be supported through the new $2 billion Thriving Kids program – an early-intervention initiative for children up to eight years old who have “mild to moderate” developmental delays or autism.
However, the rollout of the program has already been delayed, with the Prime Minister confirming in January that the initiative had been pushed back by three months and will now commence on 1 October 2026.
“Advocates hear governments promising alternative supports will emerge later, much as community mental health systems were promised decades ago,” said Ms Cummins.
“They hear reassurances that nobody will be abandoned while foundational systems remain delayed, undefined and underfunded.
“Australia has already lived through one era in which apparent savings concealed the redistribution of human suffering across the social system.”
While acknowledging the comparisons aren’t “exact”, Ms Cummins warned the government was accelerating reforms on a “dramatically compressed four-year timeline”. Deinstitutionalisation stretched across four decades.
“Australia is attempting to reduce access to support faster than replacement systems are being conceptualised or built,” she said.
The Albanese government has wasted no time, with Minister Mark Butler introducing the legislation into parliament the same week the budget was handed down. It contains some fraud prevention measures, alongside a mandate to re-assess all existing participants for NDIS eligibility.
“Health Minister Mark Butler has acknowledged that fraud, despite dominating public debate, is not the principal driver of NDIS growth,” Ms Cummins said.
“Public concern about fraud is increasingly being used to legitimise structural contraction of Australia’s disability safety net, and an estimated job loss of over 200,000.”
Advocacy groups have condemned the consultation process, arguing the 15-day timeframe severely limits meaningful discussion.
According to the Australian Financial Review, the Bill must be passed by June 30 if the government is to achieve its target of saving $15 billion annually by 2030 and reducing the scheme’s growth rate.
