Federal government plans major NDIS cuts and reforms amid state resistance
Consensus Summary
The federal government is preparing to announce major cuts to the NDIS in the upcoming May budget, with Treasurer Jim Chalmers emphasizing that NDIS savings will be the largest part of the budget package. Health Minister Mark Butler will address the National Press Club on Wednesday to outline reforms, including reducing the scheme’s growth rate from over 10% to 5-6% annually. The government and states have agreed to a $4 billion Thriving Kids program for children with autism, but Queensland remains opposed, citing concerns over funding adequacy. States report feeling blindsided by the lack of detail in recent briefings, while disability advocates warn that cuts will harm participants’ ability to live independently. The NDIS is projected to cost $63 billion by 2028-29 and could double to $100 billion by 2036 if growth is not controlled, making it the most expensive Commonwealth program. Both sources agree on the urgency of reform but differ on the level of state engagement and transparency in the process.
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Key details reported by multiple sources:
- Mark Butler will address the National Press Club in Canberra on Wednesday (2026-04-23) to detail NDIS reforms, including changes to the scheme’s growth rate.
- Treasurer Jim Chalmers stated that NDIS cuts will be 'easily the most important part of the savings package' in the upcoming May federal budget.
- The NDIS grew by over 10.3% last year and is projected to cost $63 billion by 2028-29, with the government aiming to reduce annual growth to 5-6%.
- The federal government and states agreed to a $4 billion 'Thriving Kids' program (50/50 cost-sharing) for children with autism and developmental delays, set to launch in October 2026.
- Queensland remains opposed to diverting children with mild and moderate autism from the NDIS to state-run programs, citing insufficient federal funding guarantees.
- The NDIS is forecast to double in expense to $100 billion annually by 2036 if growth is not slowed, making it the single most expensive Commonwealth program.
- Mandatory registration for supported living service providers under the NDIS begins on 1 July 2026.
- State treasurers received a briefing on NDIS reforms from Jim Chalmers and Mark Butler on Tuesday (2026-04-22), but described it as 'light on detail'.
- Bill Shorten, former Labor minister who helped establish the NDIS, has expressed concerns about the proposed cuts.
Points of Difference
Details reported by only one source:
- Western Australia, as chair of the Council of the Australian Federation, communicated concerns from disability ministers about structural NDIS changes in recent days.
- The NDIS Sustainability Taskforce, led by former Treasury official Anthea Long, was established within the health department earlier this year to drive budget savings.
- Prime Minister Anthony Albanese ruled out introducing new means testing for the NDIS, reaffirming Labor’s commitment to universal access rules.
- Government sources in multiple states reported being 'blindsided' when Butler announced the Thriving Kids program at the National Press Club in August 2025.
- Victoria’s agreement with the federal government on Thriving Kids is close to finalization, while Queensland has yet to sign on.
- Shadow NDIS Minister Melissa McIntosh accused the government of 'war-gaming' billions of dollars in cuts 'behind closed doors'.
- People with Disability Australia (PwDA) launched a campaign opposing NDIS cuts, stating that for every $1 invested, $2.25 is contributed to the economy.
- NSW Premier Chris Minns warned against removing people from the NDIS if it risks leaving them without supports, stating 'We can’t have a situation where people are knocked off the NDIS, and then the state provides the service'.
- WA Treasurer Rita Saffioti confirmed an expanded registration scheme for NDIS providers will be part of Wednesday’s announcement, addressing rorting concerns.
- Queensland Disability Services Minister Amanda Camm stated, 'The federal government's plan to walk away from their responsibilities to children and families is failing kids.'
Contradictions
Conflicting information between sources:
- The Guardian states that Chalmers briefed state treasurers (not disability ministers) on Tuesday, while the ABC reports that state treasurers described the briefing as 'light on detail' but does not specify whether disability ministers were excluded.
- The Guardian mentions that Butler spoke at the National Press Club in August 2025 about replacing state-led programs with a national scheme, but the ABC does not explicitly confirm this date or detail.
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