States Clash with Albanese Government Over NDIS Reform Pace

State and territory disability ministers have accused the Albanese government of pushing on with NDIS reform that does not align with previous agreements, warning the pace of change risks the safety of people with disability.

In a stinging joint submission to the Labor-led Senate inquiry examining the bill, state ministers said the proposal for change went "beyond and contrasted with" the recommendations of previous reviews and was "inconsistent with commitments by all governments" made at national cabinet in January.

The Senate inquiry has spent the last three days hearing concerns from across the disability sector and received more than 4,000 public submissions in just over a fortnight.

Under the proposed overhaul, the federal government expects about 300,000 people to be either kicked off or prevented from accessing the now-$50 billion scheme, with many to be serviced by yet-to-be-built supports to be run by the states.

The changes would save more than $36 billion over the next four years, and follow concerns the NDIS has been growing faster than Medicare, been exploited by criminals and is shedding public support.

The state ministers said "significant projected participant exits" by 2031 have not been "accompanied by clearly defined alternative supports", and that all jurisdictions shared "a collective responsibility" for the sustainability of the NDIS.

"The pace of reform — focused heavily on expenditure constraint, without a clearly defined broader ecosystem and with limited consultation — creates a significant risk of fragmented service delivery," the submission said.

"There is a significant risk that people with disability will end up in hospitals or other settings that are inappropriate and unable to meet their needs, or have no access to services at all."

The states also criticised a proposal to give the Commonwealth NDIS minister sweeping new powers and called for "genuine and meaningful consultation" going forward.

"Securing the NDIS for future generations requires effective co-governance, government systems that talk to each other, and delivery on existing commitments," the submission said.

"While the scheme's sustainability is an important objective, reforms must not prioritise expenditure reduction over participant safety, wellbeing, and life outcomes."

The states and territories — who shut their disability services when the NDIS began — have repeatedly clashed with the Commonwealth over NDIS reform since an independent review into the scheme in 2023 recommended more supports be set up outside of it.

The states soon agreed to set up new lower touch supports, known generally as foundational supports, and earlier this year, all jurisdictions except Queensland signed up to deliver their own version of the Thriving Kids model in exchange for more hospital funding from the Commonwealth.

Thriving Kids aims to divert children under nine with developmental delay or autism with "low to moderate" support needs off the NDIS. Its first phase is scheduled to start in October.

The Victorian government this morning became the first state or territory jurisdiction to announce any details for its iteration of Thriving Kids.

The senate inquiry into the NDIS bill is scheduled to report next week.

The federal government wants the Senate to pass its changes before parliament's winter break, but is facing opposition from the Coalition and Greens.

NDIS Minister Mark Butler told reporters earlier the government was carefully watching the inquiry, and its overhaul was "very carefully" thought through and outlined months ago at the National Press Club.

"We're confident that the timeline that we have set out … is the right plan, a plan that will ensure we start down the path of getting this enormously important scheme back on track, while also considering the views of the disability community."

The NDIS now supports more than 774,000 participants and is growing at 11.3 per cent annually.

In a statement, a government spokesperson said national cabinet agreed in January to cut the scheme's annual growth to at least 5 to 6 per cent.

"The bill before parliament proposes pathways to progress that work," they said.

"State and territory disability ministers continue to play a central role as co-stewards of the NDIS through the Disability Reform Ministerial Council, including their responsibility to agree to rules on access and planning in the scheme."