Tough love for the NDIS under Butler’s new rules

At 12 years old, the National Disability Insurance Scheme is on the cusp of becoming a teenager. “The scheme is now entering its adolescence,” Health and Disability Minister Mark Butler put it at the National Press Club on Wednesday.

“A period, as all parents know, that involves the maturing of our beautiful children. But a period which is also full of risks that things will run off the rails without a judicious dose of supervision and management.”

As the scheme’s new guardian, Butler used his first national address to set some ground rules for its next phase of development.

First, a new growth target: the scheme’s financial trajectory will be brought down to between 5 and 6 per cent a year, on par with its portfolio siblings, health and aged care. The government is still aiming for 8 per cent next year, as national cabinet agreed, but wants it to slow further after that.

Second, eligibility requirements: these will be tightened from July 2027, specifically for children with mild or moderate developmental delays and autism. Those children, who have come to make up the majority of new NDIS participants, will be diverted onto a scheme called “Thriving Kids”.

There was an air of tough love about Butler’s speech on Wednesday. “They are precious. We all love them. They’re our future,” he said of Australia’s children.

“I know this will be hard for some parents to hear, and I don’t say it lightly. But we do need, as a matter of urgency, to create a better system that will enable our children to thrive.

“Diverting this group of kids over time from the NDIS is an important element of making the scheme sustainable and returning it to its original intent.”

As Butler emphasised, the $46 billion NDIS will cost $105 billion in a decade and risks losing its social licence: seven in 10 people surveyed by Talbot Mills agreed the NDIS was vital but had grown too large. It was designed to cater to 410,000 people, not the 740,000 it does now. Growth has met its initial projections, except in one area: children with developmental delays or autism.

But he is also right in that families will be worried. Framing the NDIS as a budget issue is fraught for everyone whose lives have been transformed by what it offers. Thousands of parents have spent years on waitlists, navigating complex requirements, and fighting for their children to get the help they need. Sensitivities and disagreements over language add to distress.

And parents are tired: their anxiety has been triggered for two years. Some who watched Butler’s address on Wednesday were also plugged in when former minister Bill Shorten gave his own National Press Club address in 2023.

That was when Shorten made the Albanese government’s first declarations of an NDIS reboot. He vowed to return the scheme to its original purpose – supporting people with significant and profound disabilities – while setting up a new system to help children in familiar settings, like schools and childcare. Much of what Butler said on Wednesday was underscored by Shorten’s work and that of the co-authors of the 2023 NDIS review, Bruce Bonyhady and Lisa Paul.

So it might be more apt to characterise the time in between Press Club speeches as the scheme’s so-called tween years: a rapid transition period characterised by change and uncertainty.

Those tween years ran slightly off course. As negotiations between states and the Commonwealth stalled, the federal government was pre-occupied by an election, and the scheme sat with an interim leader. There has been little information for families as deadlines were quietly pushed back.

Butler conceded reform had drifted. Along with junior NDIS Minister Jenny McAllister – who has been engaging with the disability community while Butler oversees the broader health, disability and aged care portfolios – he says he will act urgently.

That starts with setting guardrails. On Wednesday, Butler finally answered a question that first arose two years ago: will children be removed from the scheme? Current participants, as well as those who join before July 2027, will remain enrolled in the NDIS, although their eligibility can be reassessed under current rules. After that, children will be directed towards “Thriving Kids” scheme.

But there are many more decisions to be made. How will the new system be administered? How much support will children get? At what point will children qualify for additional help through the NDIS?

The fate of the National Disability Insurance Scheme’s teenage years – and those of hundreds of thousands of children – will depend on how its caretakers across state and federal governments step up.

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