Government Plans to Restructure NDIS for Sustainability
The Australian government, led by Prime Minister Anthony Albanese, is considering a significant shift in the National Disability Insurance Scheme (NDIS). The plan involves removing children with mild autism or minor developmental delays from the program. This move comes as the scheme’s costs continue to rise at an alarming rate, prompting officials to reassess its direction and purpose.
Health and NDIS Minister Mark Butler addressed the National Press Club in Canberra, highlighting that the NDIS has grown significantly since its inception in 2013. He noted that one in six Australian six-year-old boys are now covered by the scheme. Butler described the current state of the NDIS as entering “its adolescence,” emphasizing that while it has matured, it also requires careful management to avoid potential issues.
“The scheme has grown incredibly fast and created new markets which have at times impacted and distorted other parts of the health and social care ecosystem,” he said. Butler explained that the government aims to return the NDIS to its original purpose—supporting individuals with significant and permanent disabilities—after a review initiated by former NDIS minister Bill Shorten in 2022.
Financial Challenges and Growing Costs
The NDIS is forecasted to cost taxpayers $52.3 billion in 2025-26, surpassing Australia’s $51.5 billion defense budget. This figure highlights the financial strain on the country’s resources, especially during a time of global geopolitical uncertainty. The scheme’s costs are increasing faster annually than aged care, even as more baby boomers retire and Medicare faces its own challenges.
In 2024-25, the NDIS costs reached $48.5 billion, according to Treasury Budget papers, making it the third most expensive program in Australia after revenue support for states and territories and assistance for seniors. The growing expenses are largely driven by an increase in children with autism, who now constitute the majority of new participants rather than those with permanent disabilities.
Focus on Early Intervention and Changing Demographics
Butler emphasized that diverting children with autism and developmental delays from the NDIS is crucial for sustainability and aligning the program with its original intent. A recent analysis by Nine Newspapers showed that seven out of 10 new NDIS recipients in the last financial year were children with autism, totaling 56,000 out of 78,000 participants between July 2024 and June 2025.
“Almost half of the scheme’s participants are now children under 15, and half of the new entrants are under the age of nine, most of whom have developmental delay or autism and are entering the scheme under the early intervention stream,” Butler said. He noted that this trend is causing concern among Australians, as one in every 10 six-year-olds is now on the NDIS, with 16% of six-year-old boys affected.
In certain regions like the New South Wales mid-north coast, the ratio is even higher, with one in four six-year-old boys on the NDIS. The June quarter report for 2024-25 revealed that autism and developmental delay are the most common disability types among participants under 18, with higher diagnosis rates in males.
Future Projections and Sustainability Goals
Currently, the NDIS supports 740,000 Australians, with projections indicating it could grow to 1 million by 2034. Originally, the scheme was intended to support 410,000 people when it began in 2013 during Julia Gillard’s final months in office.
In 2023, the government announced plans to limit annual growth in the NDIS to 8% per year. Public spending under Labor is already at its highest level since 1986, excluding the pandemic era. Butler acknowledged that reducing growth from 22% to 8% would be a major achievement but admitted that even this target may not be sustainable long-term.
Aged care is expected to grow by around 5% annually, despite the rising demand from the aging baby boomer generation. Similarly, Medicare is projected to grow by about 5% each year. However, the NDIS’s quarterly report revealed a 12% increase in participant numbers in 2024-25, which Butler described as “much higher than the previous year.”
Ongoing Challenges and the Road Ahead
Despite these efforts, Butler stressed that achieving the 8% growth target will require significant work. He pointed out that even this level of growth is unsustainable in the medium to long term. The challenge lies in balancing the needs of individuals with disabilities while ensuring the NDIS remains financially viable for future generations.
