Bruce Bradbury examines indexation and demand adjustment for Commonwealth funding to the States/Territories via the Commonwealth State Disability Agreement (CSDA), which covers funding of accommodation and support services for people with a disability. The report examines the adjustments in funding that would be required to take account of both changes in the cost of services and external factors influencing the demand for services. In order to maintain the same balance between supply and demand as in 2001-2, it is estimated that total funding in 2002-3 will need to be 8.35 per cent higher.