NDIA Accountability Project

Short-term NDIS cuts are unnecessary to hit long-term growth targets

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Submission 276 - Supplementary Submission

Saving the NDI?

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 savings a third of the package’s $37.8 billion savings over the four years to
2029-30, but will do nothing to dampen the long-term growth rate of the NDIS. The government’s stated growth target of 5-to-6 per cent a year would be achieved with or without the short-term cuts.

 costs                                                                                                              Structural 75%

The short-term cuts will have an almost immediate effect on costs, reaching their full impact of about $4 billion a year by 2028-29 (Fig- ture A.1). After 2028-29, savings from the short-term cuts will plateau, increasing by only 5 per cent in 2029-30, while savings from the structural reforms will increase by about 60 per cent. These growth patterns mean the short-term cuts will contribute a shrinking proportion of total savings from the reform package, down from 50 per cent in 2026-27 to 26 per cent in 2029-30.

This plateauing of savings means the impact of the short-term cuts will be a step fall in annual scheme costs, rather than a dampening of the rate of long-term growth.

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 NDI? growth rate of 5-to-6 per cent a year(Figure A.2 on the following page).

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, from a base cost of $56 billion in 2029-30. Were the Bill to be passed with the short-term cuts removed, cost growth would still be about 5 per cent, but from a higher base cost of $61 billion in 2029-30 (Figure A.3 on the next page).

Figure A.2: An NDIS savings Bill without the short-term cuts would deliver 3 per cent growth a year over the next four years

NDIS cost

$75bA.3 How we derived our estimated savings measures:

  • The 2026 Budget includes the scheme costs if the full savings package is passed.
  • The response of the Minister for the NDIS to Senate orders of 14 May 2026 includes an itemised breakdown of savings. We use this breakdown to calculate what total scheme costs would be over the four years to 2029-30 without any savings measures, or without the proposed short-term cuts.

After 2029-30:

  • 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 reform package is enacted.
  • 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 cuts will continue to grow by 5 per cent a year from 2029-30 onwards. There is no reason to expect the savings from these measures will grow any faster than 5 per cent, because the support determination will already have taken effect for all active

$70b $65b Savings Bill excluding short-term cuts: 3% growth $60b Full savings Bill: 1.1% growth $55b $50b 2025-26 2026-27 2027-28 2028-29 2029-30 2

Note: 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) and Parliament of Australia (2026).

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 deliver similar long-term growth from a slightly higher base NDIS cost $130b No savings measures: 8% growth

$110b

Savings Bill excluding short-term cuts: 5% growth Full savings Bill: 5% growth $90b

$70b

$50b 2025-26 2028-29 2031-32 2034-35 2

Note: 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).