The National Disability Insurance Scheme (NDIS) has grown too big too fast, and its future is now at stake. This report shows how the NDIS can be saved by reining in costs. This blueprint to rebalance disability services would reduce NDIS payments by about $12 billion over the next 10 years and create further savings of $34 billion over the same period by not requiring new money to fund foundational supports.

The scheme cost nearly $42 billion in 2023-24 and is expected to cost more than $58 billion by 2028. It grew by about 24 per cent a year on average from 2019-20 to 2023-24 and is now one of the biggest pressures on the federal budget.

In 2011, the Productivity Commission estimated a mature NDIS would serve 490,000 people. But in fact, the scheme is now supporting more than 700,000 people and that number is projected to pass a million by 2034. The number of adults in the scheme is only slightly higher than originally expected, but the number of children is nearly double.

Yet most disabled Australians don’t qualify for the NDIS, and there is little support for them outside the scheme.

The problem is the NDIS has become the only game in town: you either get an NDIS package, or you get minimal mainstream services. That means disabled Australians have an incentive to try to get into the NDIS – and once people get in, they tend not to leave.

To address this issue, the federal, state, and territory governments agreed in 2023 to fund new ‘foundational supports’ – disability-specific supports outside of individual NDIS packages – which were supposed to be operational by 1 July 2025. But they are nowhere to be seen.

This report recommends four big policy changes to save the NDIS.

1. The NDIS needs firmer boundaries so it is clear who the scheme is for and what needs it is intended to meet.
2. The way the NDIS manages claims needs to change so funding is allocated fairly and consistently. People should have more choice and flexibility in how they use their NDIS funding.
3. The federal, state, and territory governments should finally establish a strong tier of ‘foundational supports’ to ensure disabled people get appropriate supports when and where they need them. The existing NDIS budget should be used to fund foundational supports from within the same funding envelope.
4. Australia needs a new National Disability Agreement, to clarify the relationship between all aspects of the disability policy landscape and to facilitate cooperation and greater accountability between governments.