NDS Submission: Joint Standing Committee on the NDIS – General Issues Inquiry | External submission

National Disability Services Submission to the Joint Committee of Public Accounts and Audit:

About National Disability Services

National Disability Services (NDS™) is Australia’s peak body for disability service organisations, and Australia’s biggest and most diverse network of disability service providers. Our valued members collectively operate several thousand services for more than 300,000 Australians with disability and employ a workforce of more than 100,000 people.

NDS is committed to a sustainable and diverse disability service sector, underpinned by the provision of high-quality, evidence-based practices and supports that strengthen,

safeguard and provide greater choice for people with disability in Australia.

About National Disability Services ……………………………………………………………………… 2

Contents ……………………………………………………………………………………………………… 3

Executive Summary…………………………………………………………………………………… 4

Recommendations ……………………………………………………………………………………. 5

Scope of submission ………………………………………………………………………………………. 7

Market stewardship ……………………………………………………………………………………….. 8

Pricing as a market stewardship failure ……………………………………………………………. 9

Regulatory administration ……………………………………………………………………………… 11

Reform implementation ………………………………………………………………………………… 13

Driving change through effective NDIS administration ………………………………………….. 15

Recommendations to the Committee ……………………………………………………….. 16

Conclusion …………………………………………………………………………………………………. 18

Contact ………………………………………………………………………………………………….. 18

Relevant Submissions and Reports ………………………………………………………………….. 19

Executive Summary

This submission makes recommendations in relation to the administration of the National Disability Insurance Scheme (NDIS), looking in particular at issues around market stewardship, regulatory oversight, and reform implementation.

Issues around these areas of administration of the Scheme have been repeatedly identified through audits, reviews and sector evidence. The ongoing challenge is not a lack

of diagnosis or agreement on direction, but a failure to translate that agreement into coordinated, accountable administrative action across the Australian Government,

Department of Health, Disability and Ageing, the National Disability Insurance Agency (NDIA) and the NDIS Quality and Safeguards Commission.

Weak market stewardship has directly contributed to service withdrawals, thin market instability and increased crisis responses, while systemic shortcomings in identifying and managing market risk have allowed fraudulent practices and misuse of public funds to

persist. This has limited the system’s ability to identify and adjust to existing and emerging risks around participant safety and service continuity, particularly where providers

withdraw from specific service types or regions without formally exiting the Scheme. Implementation of a genuinely risk proportionate approach that provides oversight of all NDIS providers has been slow. Currently, only around 6 per cent of the more than 260,000 providers delivering NDIS services are registered with the NDIS Commission, with very limited oversight of the remaining 94 per cent, leaving large parts of the market effectively outside active regulatory reach. This has left registered providers delivering complex supports carrying a disproportionate compliance burden, while oversight of unregistered

providers remains inconsistent, creating gaps in visibility, assurance and participant safety. At the same time, multiple reforms have been introduced without clear

sequencing, transition planning or assessment of cumulative impacts, compounding pressure and uncertainty on participants, providers and the workforce.

These issues do not operate in isolation. Together, they shift unmanaged risk away from administration and onto providers and participants, increasing the likelihood of service

disruption, harm to participants, reduced choice and higher downstream costs. 4

Addressing individual issues in isolation will not be sufficient. Effective oversight requires

a system-wide focus on accountability, implementation discipline and outcomes.

The following recommendations focus on these issues and are intended to support the Committee’s inquiry.

Recommendations

Require clear joint accountability for NDIS administration outcomes The Australian Government, the Department of Health, Disability and Ageing, NDIA and the NDIS Quality and Safeguards Commission should jointly publish a clear statement of shared and individual accountability for market stewardship, regulatory administration and reform implementation, including decision pathways, escalation mechanisms and responsibility for continuity of supports.
Require early warning systems and time-bound intervention Require the NDIA and the NDIS Commission to demonstrate how administrative data and sector intelligence are jointly used to identify emerging market risk – including service-type withdrawal, partial provider exit, workforce instability, regional capacity constraints, and the growth of poor-quality providers, sharp practices and emerging fraud risks – and to specify the time-bound actions triggered when risk thresholds are reached.
Require implementation of genuinely risk-proportionate regulation The NDIS Commission, in coordination with Government, Department of Health, Disability and Ageing and the NDIA, should provide updates on progress demonstrating how regulatory oversight, compliance effort and assurance are differentiated based on service risk, provider capability and compliance history, consistent with the intent of the NDIS Provider and Worker Registration Taskforce and long-standing NDS advocacy. This should include direct independent assessment of whether current regulatory administration concentrates effort where risk is greatest, or whether quality providers delivering complex supports continue to bear disproportionate compliance burden without commensurate assurance benefit. Regulatory settings should be demonstrably aligned with
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safeguarding risk and market incentives, addressing the current one-size-fits-all

approach that applies equivalent pricing signals despite materially different regulatory obligations, and strengthening Scheme integrity, early risk identification and continuity of care.

Strengthen oversight of reform sequencing and administrative readiness Require Government, Department of Health, Disability and Ageing, the NDIA and the NDIS Commission to demonstrate how reforms are sequenced, staged and supported, including assessment of cumulative impacts on provider viability, workforce stability and service continuity prior to implementation.
Require public reporting on continuity failures and implementation gaps Require regular public reporting on provider exits, service contraction, loss of service capability, participant transitions and emergency interventions, including analysis of whether earlier coordinated administrative action could have mitigated disruption, and identification of agreed review recommendations that remain unimplemented.
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Scope of submission

National Disability Services (NDS) welcomes the opportunity to make a submission to the Joint Committee of Public Accounts and Audit’s (JPCAA) inquiry into the administration of the National Disability Insurance Scheme (NDIS).

This submission focuses on how the administration of the NDIS is functioning in practice, as experienced by disability service providers operating as regulated delivery partners

within a publicly funded system. From the perspective of NDS members, the effectiveness of NDIS administration is central to service continuity, provider viability, and the delivery of

safe, high-quality supports to participants.

Consistent with the Committee’s Terms of Reference, NDS has scoped this submission to three interrelated areas of administration that most directly affect the Scheme’s integrity and system performance:

market stewardship,
regulatory administration, and
reform implementation.

These issues are examined through the lens of provider experience and are informed by, and aligned with, the Auditor-General’s program of work examining the administration of

the NDIS and performance of the National Disability Insurance Agency (NDIA) and the NDIS Quality and Safeguards Commission (NDIS Commission).

NDS members are employers, regulated entities, and holders of operational risk transferred through administrative settings. As a result, providers are often the first to experience the impacts of administrative weakness, including the absence of proactive

market oversight, regulatory approaches that are not clearly risk-based, and reform processes that outpace system readiness. Where administrative arrangements are

effective, providers can invest in workforce capability, quality improvement, and innovation. Where they are not, risks are absorbed by providers and ultimately felt by participants through service disruption or withdrawal.

This submission does not revisit the policy objectives of the NDIS. Instead, it examines

whether current administrative arrangements are supporting effective stewardship of a complex, high-risk service system, particularly in regional, rural, and remote areas, specialist and thin markets, and workforce-intensive services, and where strengthened governance and accountability would materially improve system stability, participant

outcomes and public value.

Market stewardship

Effective market stewardship is currently a core administrative responsibility of the NDIA. It requires active monitoring of market conditions, early identification of risks to continuity of supports, and timely intervention where administrative settings and/or provider practices are undermining supply, quality or sustainability.

Strong market stewardship is also central to Scheme integrity and long-term budget sustainability; without it, risks are not identified early, costs are shifted downstream and administrative responses become reactive rather than preventative.

NDS is encouraged by recent government signals that the Department of Health, Disability

and Ageing is expected to adopt a more active role in market stewardship, strengthening

whole-of-system accountability for market performance and risk management. We also welcome government signals on two of the key levers of effective market stewardship: the move toward independent pricing, and strengthened oversight of all providers, including the introduction of mandatory registration for higher risk supports such as Supported Independent Living and platform providers. These measures are essential to restoring market confidence and safeguarding participants, and there is urgency in their implementation if further market contraction and service disruption are to be avoided.

Weaknesses in the market stewardship approach in recent years is a material driver of current service withdrawals, reduced availability in thin markets, workforce instability and increasing reliance on crisis responses. It has also allowed fraudulent providers, sharp practices and misuse of funds to proliferate in parts of the market, reflecting systemic shortcomings in how market risk is identified, escalated and managed. 8

Key market stewardship issues

Limited visibility of market viability and emerging risk: While the NDIA holds extensive administrative data, there is limited evidence that it is systematically used to identify emerging market stress. Monitoring focuses on high-level activity rather than lead indicators such as sustained losses, workforce attrition or

declining service capacity.
Market contraction occurring below the surface: Market monitoring does not adequately capture partial exit, where providers withdraw from specific service types, cohorts or regions while remaining active in the Scheme. This form of

contraction can significantly erode participant choice and continuity before formal exit occurs.
Market dynamism as an inadequate proxy for market health: Indicators of provider entry, exit and overall provider numbers provide a poor proxy for the availability of quality, sustainable services. High churn may coincide with the loss of experienced providers capable of delivering complex or specialist supports or the entry of poor-quality providers.
Absence of effective early warning and intervention mechanisms: Signals of

provider distress are routinely communicated through data, consultation and engagement, but there is limited evidence of structured mechanisms to translate these signals into early, coordinated intervention. Administrative responses tend to occur only after disruption has already taken place.
Unclear linkage between monitoring, accountability and action: It is often unclear how market intelligence is escalated, who is responsible for acting on it, or how intervention decisions are coordinated. This results in diffuse accountability and poorly managed participant transitions when services withdraw.

Pricing as a market stewardship failure

Pricing is one of the primary administrative levers through which market stewardship is exercised in the NDIS. In practice, current pricing settings are not functioning as an

effective stewardship tool and are instead contributing to market instability, service

withdrawal and reduced system resilience.

Pricing signals remain largely uniform across providers and services, despite significant variation in service complexity, workforce intensity and regulatory obligation. This one- size-fits-all approach fails to recognise the higher costs associated with delivering complex and specialist supports, operating in thin markets, or meeting the safeguarding and compliance requirements expected of registered providers. As a result, pricing settings actively discourage investment in quality, capability and continuity in the parts of the market where risk is greatest.

From a stewardship perspective, this misalignment has several consequences. Quality providers delivering higher risk supports face sustained financial pressure, accelerating decisions to reduce service scope, withdraw from particular regions or exit complex service types altogether. At the same time, pricing settings can incentivise lower-cost, lower-complexity service models that are less well equipped to meet participant needs or manage risk, distorting market signals and undermining assurance.

The absence of differentiated and cost-reflective pricing also limits the system’s ability to

intervene early. Without pricing mechanisms that can be adjusted to stabilise supply, support continuity or recognise quality and complexity, administrative responses are largely reactive and occur only after service disruption has already taken place. This increases reliance on crisis responses, emergency placements and short-term interventions, driving higher downstream costs and poorer outcomes for participants.

NDS has consistently called for pricing to be informed by independent, transparent advice, including through the transition of pricing functions to the Independent Health and Aged Care Pricing Authority. Independent pricing would strengthen market stewardship by

improving cost visibility, aligning prices with workforce and regulatory realities, and enabling earlier, more targeted administrative intervention where market risk is emerging.

For the purposes of this inquiry, pricing should be understood as a core component of

market stewardship rather than a standalone policy issue. Strengthening administrative oversight of pricing—so that it better reflects service risk, regulatory obligation and market

conditions—would materially improve the system’s ability to identify emerging risk,

support quality providers to remain in the market, and maintain continuity of supports for participants.

For the purposes of this inquiry, market stewardship should be understood as a test of administrative effectiveness rather than policy intent. Strengthening stewardship, which includes providing clearer accountability, making better use of intelligence, taking proactive intervention, and carefully managing the sequencing of reforms, would materially improve continuity of supports, reduce downstream costs and support the long-term sustainability of the NDIS.

Regulatory administration

Regulatory administration is central to safeguarding participants, maintaining public confidence and supporting a sustainable service system. For the NDIS, this requires regulation that is risk based, proportionate, transparent and capable of driving improved quality and safety outcomes.

Current regulatory administration places increasing burden on providers without clear

links to the delivery of commensurate improvements in assurance, consistency or

outcomes across the market. This imbalance aligns with issues identified through audit scrutiny of NDIS regulatory functions and has become a material source of operational risk, workforce strain and reduced capacity to invest in quality provision.

At the same time, substantial regulatory and transparency gaps persist within the unregistered provider market, where most NDIS providers operate with limited oversight. This lack of visibility has enabled substandard and unsafe practices—including fraud,

exploitation, and misuse of participant funds—to continue undetected. As a result, the responsibility for identifying and managing these risks has shifted disproportionately to participants and their families, rather than being systematically addressed through effective regulatory oversight.

NDS is encouraged by recent government signals regarding mandatory registration for

higher risk supports, including Supported Independent Living and platform providers; however, timely implementation is critical to address persistent gaps in oversight and participant safeguarding.

Key regulatory administration issues

Predominantly reactive regulatory oversight: Regulatory activity is largely triggered by complaints, incidents or audit cycles rather than proactive identification of emerging risk. This limits prevention and concentrates effort after

harm or disruption has already occurred.
Slow evolution and gaps in implementation of genuinely risk-proportionate regulation: Compliance burden is applied largely uniformly across providers, with limited differentiation based on service risk, participant complexity, provider capability or compliance history. This undermines effectiveness and value for money and represents and represents an opportunity to improve implementation.
Disproportionate impact on quality providers: Providers delivering complex or specialist supports often face the highest compliance burden, despite already

operating under robust governance and safeguarding arrangements. The issue is not the presence of oversight, but that it is too heavily weighted toward paperwork and process rather than quality, outcomes, and continuous improvement. This

discourages quality market growth and contributes to service contraction in higher- risk areas.
Inconsistent interpretation and application of requirements: Providers report variability in audit processes, regulatory interpretation and enforcement decisions across audit bodies and regulatory interactions. This inconsistency can increase

compliance effort and undermines confidence in the fairness and predictability of the system.
Limited regulatory visibility across the full delivery market: Ambiguity about who is regulated, how obligations apply and how issues can be raised, combined with the practical absence of oversight for large parts of the unregistered market, limits visibility of risk across the full provider market and allows poor and unsafe
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practices to go undetected. This distorts market signals, weakens assurance and

create an uneven operating environment.

Weak transparency and feedback loops: Providers have limited visibility of directions to auditors or specific areas of audit focus. Feedback often focuses on compliance rather than improvement, limiting learning and capability building.

From the perspective of NDS members, current arrangements indicate a system where regulatory effort continues at a high intensity without clear evidence that it is sufficiently risk based, outcome focused or well-integrated with broader administrative functions. These observations are consistent with themes emerging from audit scrutiny, reinforcing that the challenges described are systemic rather than provider specific.

Strengthening regulatory administration through clearer risk stratification, improved transparency, stronger feedback loops and better coordination with market stewardship

and reform would support better outcomes for participants while reducing unnecessary burden on providers and improving overall system effectiveness.

Reform implementation

Effective reform implementation is an administrative task as much as a policy one. For the NDIS, this requires clear sequencing, realistic transition planning and active management of cumulative impacts on the delivery system.

Issues around reform implementation are now compounding risks created by weak market stewardship and disproportionate regulatory administration, increasing pressure on providers and participants.

Key reform implementation issues

Overlapping reforms without clear sequencing: Providers are managing multiple concurrent reforms across planning, pricing, regulation, workforce and digital systems. Changes often occur with little notice, shifting guidance, and limited support—even for reforms that substantially affect operations and systems.
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Providers frequently must quickly alter pricing, systems, reporting, and workforce

arrangements due to these rapid implementations.

Absence of a clear system-wide reform roadmap: There is limited visibility of how reforms are intended to sequence or interact over time. This makes it difficult for providers to plan, invest or align operational change in a way that maintains service continuity and workforce stability.
Limited assessment of cumulative and downstream impacts: Reforms are not consistently assessed for their combined effects on provider viability, workforce sustainability or market capacity. This limits the system’s ability to identify when

reform pace or sequencing itself has become a source of risk.
Weak integration with market stewardship and regulation: Reform implementation is insufficiently coordinated with stewardship and regulatory functions, reducing the system’s ability to anticipate market impacts or adjust administrative settings in response to emerging risk.

Taken together, these issues indicate that reform implementation is not being managed as a coordinated administrative function.

Recent NDIS reforms are being implemented in parallel and at pace, often before the operational, workforce, pricing and regulatory foundations required to support them are in place. Compliance and quality expectations are increasing ahead of fit-for-purpose

Pricing, stable market settings and clear implementation guidance, leaving providers to absorb transition risk while continuing to deliver supports under legacy arrangements.

At the same time, system readiness has been constrained by workforce shortages, unstable market conditions in thin and high-complexity services, evolving guidance and unclear accountabilities across the NDIA, the NDIS Commission and Government. As a

result, reforms are frequently experienced at the frontline as reactive and inconsistent,

rather than staged and supported.

Together, these factors are increasing reliance on crisis responses, accelerating provider withdrawal from higher-risk services and regions, and undermining confidence to invest in and deliver complex supports safely and sustainably.

For the purposes of this inquiry, reform implementation should be assessed by whether

administrative arrangements support orderly transition, system readiness and continuity of supports. Without stronger coordination, sequencing and oversight, reform risks amplifying existing weaknesses in the NDIS rather than addressing them.

Driving change through effective NDIS administration

Issues outlined in this submission should be understood as interconnected failures of

administration, not isolated problems. Less than effective market stewardship, disproportionate regulatory administration and poorly sequenced reform interact to create

a system in which risk is not actively identified, managed or mitigated by government, but is instead absorbed by providers and participants.

Responsibility for these functions is shared across the Australian Government, the Department of Health, Disability and Ageing, NDIA and the NDIS Commission. These

bodies operate as a single administrative system. However, joint responsibility has not consistently translated into clear accountability, coordinated action or effective follow-

through. Fragmented roles, unclear decision pathways and weak coordination have limited the system’s ability to act on known risks, despite repeated audit findings and

government-commissioned reviews identifying the same issues.

When market stewardship is weak, early warning signs such as service-type withdrawal, workforce fragility and declining capacity among quality providers are not identified or

acted on. Regulatory administration then compounds these pressures by applying largely uniform compliance burden, rather than concentrating effort where risk is greatest. Rapid

and overlapping reforms, introduced without clear sequencing or transition planning, further strain provider capacity and reduce system resilience.

These failures reinforce one another through negative feedback loops. Regulatory burden accelerates market exit and contraction among quality providers, reducing service

availability and choice. Reform pressure contributes to workforce loss and undermines confidence to invest in complex or specialist supports. Administrative complexity

increases reliance on crisis responses rather than planned, continuity-focused intervention. 15

The combined effect of these dynamics is greater than any single issue in isolation.

Together, they undermine accountability, distort market signals, increase downstream costs and weaken assurance that the NDIS is being administered in a way that protects continuity of supports and public value. The persistence of these issues, despite repeated agreement in principle with review and audit findings, points to an implementation and

governance failure rather than a lack of diagnosis.

Recommendations to the Committee

To address persistent administrative weaknesses and support the Committee’s oversight

role, NDS recommends the following actions.

1. Require clear joint accountability for NDIS administration outcomes

The Australian Government, the Department of Health, Disability and Ageing, NDIA and the NDIS Quality and Safeguards Commission should jointly publish a clear statement of shared and individual accountability for market stewardship, regulatory administration and reform implementation, including decision pathways, escalation mechanisms and responsibility for continuity of supports.

2. Require early warning systems and time-bound intervention

Require the NDIA and the NDIS Commission to demonstrate how administrative data and sector intelligence are jointly used to identify emerging market risk – including service-type withdrawal, partial provider exit, workforce instability, regional capacity constraints, and the growth of poor-quality providers, sharp practices and emerging fraud risks – and to specify the time-bound actions triggered when risk thresholds are reached.

3. Require implementation of genuinely risk-proportionate regulation

The NDIS Commission, in coordination with Government, Department of Health, Disability and Ageing and the NDIA, should provide updates on progress demonstrating how

regulatory oversight, compliance effort and assurance are differentiated based on service risk, provider capability and compliance history, consistent with the intent of the NDIS Provider and Worker Registration Taskforce and long-standing NDS advocacy. 16

This should include direct independent assessment of whether current regulatory

administration concentrates effort where risk is greatest, or whether quality providers delivering complex supports continue to bear disproportionate compliance burden without commensurate assurance benefit. Regulatory settings should be demonstrably aligned with safeguarding risk and market incentives, addressing the current one-size-fits-

all approach that applies equivalent pricing signals despite materially different regulatory obligations, and strengthening Scheme integrity, early risk identification and continuity of care.

4. Test whether regulatory burden and assurance align with risk in practice

Direct independent assessment of whether current regulatory administration concentrates effort where risk is greatest, or whether quality providers delivering complex supports continue to bear disproportionate compliance burden without commensurate assurance benefit.

5. Strengthen oversight of reform sequencing and administrative readiness

Require Government, Department of Health, Disability and Ageing, the NDIA and the NDIS Commission to demonstrate how reforms are sequenced, staged and supported,

including assessment of cumulative impacts on provider viability, workforce stability and service continuity prior to implementation.

6. Require public reporting on continuity failures and implementation gaps

Require regular public reporting on provider exits, service contraction, loss of service capability, participant transitions and emergency interventions, including analysis of whether earlier coordinated administrative action could have mitigated disruption, and identification of agreed review recommendations that remain unimplemented.

Conclusion

Strengthening administration across market stewardship, regulatory oversight and reform implementation is essential to sustaining the delivery of safe, high-quality supports and protecting the public value of the National Disability Insurance Scheme.

The issues outlined in this submission have been repeatedly identified through audit, review and sector evidence. The ongoing challenge is not a lack of diagnosis or policy

intent, but the absence of consistent, coordinated and accountable implementation across government, Department of Health, Disability and Ageing, the NDIA and the NDIS

Commission.

Without strong and effective market stewardship, genuinely risk-proportionate regulation and disciplined reform sequencing, unmanaged risk will continue to be transferred to the delivery system and to participants. This increases the likelihood of service disruption, reduces value for money and undermines confidence in the administration of a major

national program.

The Committee’s oversight role is therefore critical. By focusing on accountability,

implementation and outcomes, the Committee can help ensure that agreed reforms are translated into practice and that administration of the NDIS delivers continuity, quality and long-term public value.

Contact

Michael Perusco

CEO

National Disability Services

redacted

NDS website

Date: 30 January 2026

Relevant Submissions and Reports

Together, these submissions demonstrate a consistent body of evidence from NDS highlighting systemic administrative weaknesses in market stewardship, regulatory administration and reform implementation that directly inform the issues examined in this inquiry.

NDS Submission: ANAO – Effectiveness of the Board of the National Disability

Insurance Agency

29 August 2024 Link: https://nds.org.au/policy-library/nds-submission-australian-national-audit-office- effectiveness-of-the-board-of-the-national-disabilit

This submission addressed governance and accountability arrangements within the NDIA, with a focus on board oversight, risk management and decision-making. It emphasised the importance of clear accountability for market stewardship outcomes and effective escalation and response to emerging risks.

NDS Submission: ANAO – Effectiveness of the NDIS Quality and Safeguards

Commission’s Regulatory Functions

26 October 2024 Link: https://nds.org.au/policy-library/nds-submission-anao-effectiveness-of-the-ndis- quality-and-safeguards-commissions-regulatory-function

This submission examined the effectiveness of regulatory administration, highlighting the need for genuinely risk-proportionate regulation, clearer regulatory boundaries and improved use of regulatory intelligence. It raised concerns about disproportionate burden

on quality providers and limited evidence that increased regulatory activity was translating into improved safeguarding outcomes.

NDS Submission: ANAO Performance Audit – NDIA’s Management of NDIS Payment

Claims Compliance

28 January 2025 Link: https://nds.org.au/policy-library/nds-submission-anao-performance-audit-ndias- management-of-ndis-payment-claims-compliance

This submission focused on administrative approaches to compliance and integrity, highlighting the impacts of claims management settings on provider viability and service continuity. It raised concerns about reactive compliance activity, lack of proportionality

and insufficient alignment between administrative controls and risk.

NDS Submission: Joint Standing Committee on the NDIS – General Issues Inquiry

22 October 2025 Link: https://nds.org.au/policy-library/nds-submission-joint-standing-committee-on-the-

ndis-general-issues-inquiry1

This submission addressed broader systemic issues affecting the NDIS, including governance, market sustainability, workforce pressures and service continuity. It

emphasised the importance of quality providers, effective market stewardship and implementation discipline to translate agreed reform objectives into outcomes.