NDIS Budget Outlook: Understanding the Real Story Behind the Numbers

The Albanese government’s May budget has sparked significant discussion, particularly regarding its projections for the National Disability Insurance Scheme (NDIS). While official statements suggest continued growth, a closer look at the figures, accounting for economic realities, reveals a different picture for participants, families, and providers.

Unpacking the Budget: Beyond Surface-Level Growth

At first glance, the budget papers might suggest NDIS funding is still increasing. However, reports indicate that the government has proposed adjustments to NDIS expenditure totalling around $36.2 billion over the next four years. This comes from a planned change in the scheme’s growth trajectory.

Instead of the 15% annual increase seen in the previous budget (2025-26), NDIS expenditure is now projected to fall by 1% from 2026-27 to 2028-29, before a slight rise in 2029-30. This shift in projection is what leads to the significant difference in overall funding.

The Impact of Economic Factors

The official figures can be misleading when we consider broader economic factors. When we factor in the increasing size of Australia’s economy, the effects of inflation, and population growth, the picture becomes clearer. What appears as a modest reduction in growth actually translates to a significant decrease in real terms.

Sources estimate that when these factors are considered, NDIS funding is set to fall by 12% from its 2026-27 levels to 2029-30. This isn’t just a number on a page; it has tangible consequences for the scheme and those it supports.

Real-World Consequences: Jobs and Care

These projected reductions in NDIS funding translate directly to the capacity of the scheme to deliver essential supports. By 2029-30, the estimated cut of $16.4 billion is equivalent to approximately 94 million hours of paid work in the residential care and social assistance services sector.

This could mean a loss of around 51,641 full-time equivalent jobs. Care work that would typically be funded through the NDIS will likely need to be picked up elsewhere, often falling back onto family members and informal carers.

The “Sustainability” Argument and What It Means

A key reason cited by the government for these changes is the “sustainability” of the NDIS. Health Minister Mark Butler stated in April that “Unless we take action to make it sustainable, it simply will not be there in the future for the Australians who need it most.”

The explanatory memorandum for the proposed legislation outlines that “financial sustainability means ensuring the Scheme can keep funding NDIS supports now and into the future without growing beyond what governments can sustainably fund.” This definition suggests that funding for some supports might be less than their actual cost, even if still deemed “reasonable and necessary.”

A Question of Choices: Revenue vs. Cuts

However, critics argue that the government’s focus on “sustainability” primarily looks at spending cuts, rather than also exploring ways to increase government revenue. The budget demonstrated the government’s ability to adjust the tax side of the ledger, for example, with changes to capital gains tax, negative gearing, and discretionary trusts.

Sources point to potential revenue streams that could offset NDIS reductions. For instance, a 25% tax on gas exports could reportedly raise $17 billion annually, or $68 billion over four years. This amount significantly exceeds the proposed NDIS adjustments.

Fuel Tax Credits: Another Piece of the Puzzle

The budget also estimates that $47 billion will be provided in fuel tax credits over the next four years. Of this, around $22 billion is expected to go to mining companies. This figure alone is equivalent to 61% of the total NDIS reductions.

These examples highlight a debate about government priorities: whether to protect specific industry profits or ensure comprehensive support for people with disability. As Mark Butler himself observed, “The NDIS is a statement of our national values, it’s a measure of our national character.”

What This Means for Participants, Families, and Providers

The projected NDIS budget changes signal a challenging period ahead for everyone connected to the scheme. For participants, it could mean tighter plan reviews and a potential squeeze on the range or intensity of supports available. Families and informal carers may face increased pressure to provide unpaid care.

For disability service providers, the reduction in funding growth and the potential loss of jobs could lead to operational challenges and uncertainty. Understanding these underlying economic shifts, beyond the headline numbers, is crucial for planning and advocacy.

Next Steps

Staying informed about these budget changes and their practical implications is more important than ever. Advocacy groups and peak bodies will continue to monitor the situation closely and work to ensure the NDIS remains a strong and sustainable scheme for all Australians who need it. Engaging with these discussions can help ensure that the voices of participants, families, and providers are heard as these changes unfold.

Hazel Chen

I work in marketing and communications for NDISLocal, helping connect NDIS participants, families, and providers with clear, useful information about the sector. I'm passionate about making the NDIS easier to understand and navigate, and about giving disability service providers a platform to reach the people who need them. If you'd like to know more about anything covered in this post, or you're a provider interested in being featured, feel free to get in touch.