Submission 276 - Supplementary Submission
Saving the NDIS?
Appendix A: The short-term cuts are unnecessary to hit the long-term growth targets
The government’s proposed short-term cuts will deliver more than Figure A.1: The short-term cuts deliver a shrinking share of the NDIS a third of the package’s $37.8 billion savings over the four years to savings 2029-30, but will do nothing to dampen the long-term growth rate of Estimated savings, Share of estimated savings,
the NDIS. The government’s stated growth target of 5-to-6 per cent a by reform category by reform category
year would be achieved with or without the short-term cuts. $16.6b 100%$15bA.1 The short-term cuts will cause a one-off fall in annual NDIS costs Structural 75%
$11.8b Structural reformsThe short-term cuts will have an almost immediate effect on costs, reforms reaching their full impact of about $4 billion a year by 2028-29 (Fig- $10b ure A.1). After 2028-29, savings from the short-term cuts will plateau, 50% $7.4b increasing by only 5 per cent in 2029-30, while savings from the structural reforms will increase by about 60 per cent. These growth $5b patterns mean the short-term cuts will contribute a shrinking proportion 25%
of total savings from the reform package, down from 50 per cent in Short-term Short-term $2.0b
2026-27 to 26 per cent in 2029-30. cuts cuts
This plateauing of savings means the impact of the short-term cuts will 2026-27 2029-30 2026-27 2029-30be a step fall in annual scheme costs, rather than a dampening of the rate of long-term growth. Source: Grattan analysis of Department of the Treasury (2026a, Table 6.9.2, p. 234) and Parliament of Australia (2026). A.2 The government’s scheme sustainability targets will be achieved with or without the short-term cuts
Over the next four years (the published forward estimates), the full package of reforms will drag NDIS cost growth down to 1.1 per cent a year, a cut in real terms. Without the short-term cuts, cost growth would be 3 per cent a year. This would still be a real cut in population-adjusted terms, and well below the government’s target long-term NDIS growth rate of 5-to-6 per cent a year(Figure A.2 on the following page).
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Submission 276 - Supplementary Submission
Saving the NDIS?
In the period after 2029-30, NDIS cost growth under the full package of reforms will be about 5 per cent,114 from a base cost of $56 billion in 2029-30.115 Were the Bill to be passed with the short-term cuts Figure A.2: An NDIS savings Bill without the short-term cuts would removed, cost growth would still be about 5 per cent, but from a higher deliver 3 per cent growth a year over the next four years base cost of $61 billion in 2029-30 (Figure A.3 on the next page). NDIS cost
$75bA.3 How we derived our estimated savings No savingsmeasures: 8% growthOver the four years to 2029-30: $70b ∙The 2026 Budget includes the scheme costs if the full savings package is passed.116
∙The response of the Minister for the NDIS to Senate orders of 14 $65b May 2026 includes an itemised breakdown of savings.117 We use Savings Bill this breakdown to calculate what total scheme costs would be excluding short-term
$60b over the four years to 2029-30 without any savings measures, or cuts: 3% growthwithout the proposed short-term cuts. Full savings Bill: 1.1% growth After 2029-30: $55b
∙Minister Mark Butler said in his pre-Budget speech at the National Press Club that cost growth will be 5 per cent from 2030 if the full $50b
reform package is enacted.118 2025-26 2026-27 2027-28 2028-29 2029-30 2∙Growth in savings from the short-term cuts between 2028-29 and 2029-30 is 5 per cent. We assume savings from the short-term Note: Includes both federal and state contributions to the cost of the NDIS delivered cuts will continue to grow by 5 per cent a year from 2029-30 through the National Disability Insurance Agency, and the cost of the NDIS program administered by the federal Department of Health, Disability, and Ageing. onwards. There is no reason to expect the savings from these Source: Grattan analysis of Department of the Treasury (2026a, Table 6.9.2, p. 234) measures will grow any faster than 5 per cent, because the and Parliament of Australia (2026). support determination will already have taken effect for all active
- Butler (2026).
- Department of the Treasury (2026a, Table 6.9.2, p. 234).
- Ibid (Table 6.9.2, p. 234).
- Parliament of Australia (2026).
- Butler (2026). Grattan Institute 2026 27
Submission 276 - Supplementary Submission
Saving the NDIS?
‘old framework’ NDIS plans by that time. We use these estimates of savings from the short-term cuts to calculate what total scheme costs would be after 2029-30 without the short-term cuts. Figure A.3: An NDIS savings Bill without the short-term cuts would ∙Without any savings measures, growth over the four years to deliver similar long-term growth from a slightly higher base 2029-30 will be steady at about 8 per cent a year. We assume NDIS cost growth would continue at 8 per cent a year after 2029-30 under $130b this scenario. No savings measures: 8% growth
$110b
Savings Bill
$90b excluding short-term cuts: 5% growth Full savings Bill: 5% growth $70b
$50b
2025-26 2028-29 2031-32 2034-35 2Note: Includes both federal and state contributions to the cost of the NDIS delivered through the National Disability Insurance Agency, and the cost of the NDIS program administered by the federal Department of Health, Disability, and Ageing.
Source: Grattan analysis of Department of the Treasury (2026a, Table 6.9.2, p. 234), Parliament of Australia (2026), and Butler (2026).
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