NDIS announcement LIVE updates: Mark Butler reveals long-anticipated reforms to $50b scheme in National Press Club speech

The federal health minister has also revealed the government will restrict growth in the NDIS to 2 per cent a year for the next four years, before expanding to 5 per cent after the end of the decade.

The annual growth rate of the scheme is currently 10 per cent.

“Under this plan, the NDIS will grow every year, but instead of costing more than $70 billion in 2030, taxpayers will spend around $55 billion over the [next four years],” Butler said.

“Spending will grow around an average of 2 per cent every year as we reset many of [the NDIS] design features before returning to 5 per cent growth over the medium term.”

Butler says actual spend by NDIS participants will be cut to 2023 levels, and reduce the cost of the third parties involved in the scheme by 30 per cent.

“I want to be honest with people. This will have a material impact on participant plans,” Mark Butler said.

He went on to say the following:

The average spend on this activity today is about $31,000 per participant, up from just $14,000 five years ago. Over the next two years, our changes will bring that figure down to about $26,000 per participant.

We’re also going to move quickly to improve the quality and reduce the cost of the huge number of third-party intermediaries in the scheme, those third parties who manage the majority of NDIS plans and claims. Now, many of these people provide valuable support to participants, but others have no qualifications or background in disability services and seem more interested – too often – in clipping the ticket.”

The health minister says he will introduce legislation to “get a grip” on the drivers of NDIS growth and introduce standardised assessments.

He said the new rules would introduce “evidence-based assessments of a person’s functional capacity to determine access to the scheme”.

“In line with the scheme’s original intent, access will be based upon a significant reduction in a person’s functional capacity that impacts their day-to-day living.”

He went on to say lists that decide a person’s eligibility for the NDIS based on diagnosis alone would be removed.

These so-called access lists were put in place to get the scheme up and running, but they were always supposed to make way for an objective assessment tool.

Instead, the diagnosis gateway has funnelled people onto a scheme that was never designed for them. Now, that’s not their fault. They’ve been told this is the only program available, or that this is the help that their child needs. It’s our responsibility as governments to make sure that in the future, these Australians are pointed in the right direction.”

Butler says the NDIS cannot be allowed to grow at its current rate.

“For the sake of the people the NDIS was created for, we have to make sure it’s sustainable now and for future generations,” Butler said.

“The NDIS costs too much and it’s growing too fast ... unless we take action to make it sustainable, it simply will not be there in the future for the Australians who need it most.”

He went on to say the design of the NDIS was a “fundamental barrier” to managing it:

The fraud fusion taskforce that we established shortly after coming to government has identified eight recurring design failures in long-standing government programs that make them susceptible to fraud. The NDIS has all eight.

It also identified seven fundamental building blocks for high-integrity programs. The NDIS has none of them. These structural flaws mean that measures that we have introduced to control spending are simply not working as we intended.”

The health minister went on to say that subsidised private health cover for older Australians would be cut in the May budget, with savings to be redirected into aged care:

Right now, we subsidise private health cover for Australians over 65 at a higher rate than other Australians. 

It means two households on the same income receive different levels of government support based only on their age … that’s simply not fair between generations. And it’s simply not the best way to spend precious taxpayer dollars.

So this budget will return the rebate for older Australians back to the level paid for everyone else, and divert that money back into aged care to fund that package. Understandably, this won’t be a welcome decision for many, but it is the right thing to do to re-establish intergenerational equity in the rebate system, and also to free up funding that we need to provide more dignity and more care to older Australians.”

Mark Butler says the May budget will invest $3 billion into aged care for more beds and packages.

The minister for health, disability, and the NDIS outlined the challenge facing Australia in supporting an ageing population, saying an unprecedented number of Australians were reaching 80 years of age – the age for measuring demand for aged care.

“The investments I announced today will support the construction of an additional 5000 aged care beds each year,” he said.

“We’ll also invest over $200 million to deliver 20 additional specialist dementia care units and expand the hospital-to-aged-care dementia support program.”

Butler said the government had heard community concerns around the introduction of co-payments for services such as help with showering:

In response, in this budget, we’ll invest around $1 billion to change the treatment of showering, continence management and dressing through the support-at-home program, making those services free of charge alongside clinical care.

Dignity in older age through a world-class aged care system is the least that our parents and grandparents deserve.”

The Greens have flagged that they will oppose any cuts to the NDIS, accusing the government of balancing the budget at the expense of people with disabilities.

The minor party’s disability spokesman, Jordan Steele-John, said people with disabilities were disgusted with the flagged NDIS overhaul, and felt betrayed by a Labor government they thought would protect disability services.

“Disabled people and our families are sick of being used as political footballs,” the senator told the ABC’s Radio National earlier today.

“We’re in a situation right now where the state government is saying we cost too much, the federal government are saying we cost too much, and in the middle are disabled people and our families who will end up receiving less services and supports. We will end up without the support that we need to live.”

Steele-John said budget savings could be made elsewhere, such as by introducing a windfall tax on gas exports, reducing defence spending, or properly funding the quality and safeguards commission to tackle fraud in the scheme.

As the government prepares to overhaul the NDIS to create savings in next month’s budget, Prime Minister Anthony Albanese says he does not see the scheme as a “fiscal position”.

“The important thing is that it deliver what it was intended to do: looking after people, Australians with disabilities, making sure they can fully participate in society,” Albanese told reporters in Sydney this morning.

“Now, the growth rate when we were elected to office was 22 per cent. That quite clearly … is unsustainable for any program, and what’s important is that it be made sustainable because it’s too important to be undermined in terms of confidence in the scheme.”

Deputy Opposition Leader Jane Hume says the Coalition will support Labor’s moves to bring the NDIS “back under control”, in a rare sign of bipartisanship.

Hume cited the allegations that 10 per cent of NDIS claims are fraudulent and called on the government to do something about the ballooning numbers of unregistered providers.

However, the Liberal frontbencher refused to nominate how much a sustainable version of the scheme would cost, saying:

I am very concerned about the level of growth in the NDIS. Now, it was growing at around 18 per cent when [we were] in government, we desperately tried to rein it in, to bring it back under control, and the Labor opposition then blocked us every step of the way. Now that it’s their problem, we’ve said that we will help them.”

Labor’s backdown from forcing older Australians to pay for help with showering, dressing and managing incontinence was because of community backlash, Aged Care Minister Sam Rae has said.

“We always said when we were implementing these generational changes that we’d listen to older people and we’d respond to their experiences of the new system, and that’s what we’re doing here,” Rae told ABC’s News Breakfast this morning.

“Obviously, people have made clear that they want showering, they want dressing and incontinence management considered as clinical care, and that’s the change that we’re making.”

The policy reversal to include services that started incurring out-of-pocket fees when Labor’s new aged care system came into effect last November will cost the budget $1 billion over the next four years, Rae said, adding that Health Minister Mark Butler will give more detail on the broader health budget at the National Press Club today.