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I begin by acknowledging the traditional custodians of the land where we meet, the Ngunnawal people.
I pay my respects to Elders past and present and extend that respect to any First Nations people here with us today.
I also acknowledge my colleagues, Minister for the NDIS Jenny McAllister, Minister for Aged Care and Seniors Sam Rae, and of course the Finance Minister Katy Gallagher, as well as other colleagues.
Their leadership, and the important work underway in their respective portfolios, is strengthening care and access for Australians.
A little over 80 years ago, both my grandfathers were coming home after serving in North Africa, the Middle East and New Guinea.
Like so many returning service men and women, they’d been away for several years in their 20s.
They were all impatient to get back to civilian life.
They found jobs, partners and homes.
And they had kids – lots of kids.
Including my Mum and Dad.
Now, those babies are turning 80 – the critical age for measuring demand for aged care. And they’re doing it in unprecedented numbers.
In the four years from 2012, the net increase in Australians aged 80 and older was just 70,000.
Over the coming four years, that growth will be more than 300,000 – four times the growth.
That’s why I’ve said we need to open a new Aged Care home every three days for the next twenty years.
And, right now, we’re not. Not by a long shot!
There’s a lot of talk right now about intergenerational equity.
And – quite rightly – that talk focuses mainly on a lack of opportunity for young Australians – especially in housing.
Young Australians aren’t just our cherished kids; they’re our future and require us to invest in their opportunities to build contributing lives in this great country.
But there’s another profound generational challenge in Australia, which sits at the other end of the age spectrum. Providing dignity to that fast-growing cohort of Australians over 80.
Just as young Australians need us to invest in their opportunity, those older Australians who built the country we’re privileged to enjoy today also need us to invest in their dignity and care at the end of their long lives.
This Budget will invest $3 billion in delivering more beds, more packages, and better care for Older Australians.
In our first term, Anika Wells did excellent work passing generational reform in a new Aged Care Act with the support of the Opposition.
And Minister Rae is now busy implementing these important reforms.
But more reform is needed – especially to get those new aged care homes built.
We recently received an independent review of aged care accommodation funding, designed to help us get construction moving.
In this Budget, the Government will deliver a first response to that independent advice, focused on delivering more aged care beds for supported residents – those with limited financial means.
This builds on the changes we delivered in our first term that incentivised construction of beds for residents who do have the financial means to contribute to the cost of their accommodation.
The Review also contains recommendations about capital assistance to aged care providers planning to build new homes, and Minister Rae will lead discussions with the sector about those recommendations for future consideration.
The investments I announce today will support the construction of an additional 5,000 beds each year.
We all know older Australians with high level dementia need targeted supports.
So, we will also invest over $200 million to deliver 20 additional Specialist Dementia Care units and expand the Hospital to Aged Care Dementia Support Program, helping older people successfully transition from hospital into residential aged care.
We’ve been closely monitoring the rollout of the new Support at Home Program.
This program is undeniably delivering improvements to the system: more packages, better quality packages and shorter wait times.
But we’ve heard community concerns on some aspects of the program, particularly around showering.
In response, we’ll invest around $1 billion to change the treatment of showering, continence management and dressing through the Support at Home program, making them free of charge alongside clinical care.
Dignity in older age – through a world class aged care system – is the least our parents and grandparents deserve.
We want to deliver that, with our Aged Care Package, but it will require serious investment – and honesty about where taxpayer dollars are best spent.
Right now, we subsidise private health cover for Australians over 65 at a higher rate than other Australians.
In the election environment of 2004, with Government coffers reaping the benefits of the China boom, John Howard increased the Private Health Insurance rebate.
But only for Australians over 65.
In 2026, it’s a policy that’s harder to defend.
It means two households on the same income receive different levels of government support, based only on their age.
That’s not fair between generations.
And it’s simply not the best way to spend precious taxpayers’ dollars on behalf of older Australians when we need to do so much heavy lifting in Aged Care.
So, this Budget will return the rebate for older Australians back to the level paid for everyone else and divert the money back into Aged Care.
I understand this won’t be a welcome decision for many, but it’s the right thing to do.
To re-establish intergenerational equity in the rebate system.
And to free up funding to provide more dignity and care to older Australians.
Of course, equity and dignity were at the heart of the long battle for disability rights – and, ultimately, the NDIS.
The NDIS is one of Australia’s great human rights achievements.
It is a great Labor reform. We want every Australian to be proud of it.
Within just 13 years, the NDIS has gone from a dream of generations of activists to a cherished national institution.
It has changed lives – and changed our country – for the better.
And let me be clear – the NDIS will continue to grow every year.
But for the sake of the people the NDIS was created for, we have to make sure it is sustainable now – and for future generations.
Right now, the NDIS costs too much and is growing too fast, put alongside any comparable Government program.
And unless we take action to make it sustainable, it simply will not be there in the future for the Australians who need it most.
We can’t afford for the NDIS to continue growing at its present rate.
But far more importantly, we can’t afford for the NDIS to fail.
Part of the challenge we face is that the NDIS has become a soft target for shonks and rorters – as well as the worst elements of organised crime.
I want to be very clear about this.
When we talk about fraud in the NDIS, we are not talking about people with disability, we are not talking about families who have been put on a plan or offered support.
They are not doing anything wrong.
The fraud in the NDIS is being perpetrated by lowlifes who are scamming both the taxpayer and people with disability.
The scale and chaotic nature of the NDIS market is distorting other parts of the care economy, and too often not providing high quality care to participants themselves.
All of this is hitting the Scheme’s community support, or social licence.
Last year, I referenced independent research that showed declining community confidence in the Scheme.
Updated research by Talbot Mills reveals that trend is getting worse.
While 7 in 10 Australians still agree the NDIS plays a vital role for people with a disability, 7 in 10 also think it's gotten too large and struggles with dodgy providers.
Worse still, more than 6 in 10 think it’s actually “broken”.
I know this dramatic shift in community sentiment is as troubling to disability advocates and NDIS participants as it is to the Government.
The starting point for our Government is this.
We take pride in the fact that Labor built the NDIS.
And we are taking responsibility for securing its future.
That’s why in every Budget, we have worked to put the NDIS onto a more sustainable footing.
In 2022, we inherited a growth trajectory of 22%.
In 2023, we brought National Cabinet together to agree on how to bring that down to 8%.
Earlier this year, we brought National Cabinet together again and agreed to target 5 to 6 per cent, or lower.
I want to acknowledge Bill Shorten and Amanda Rishworth for their hard work in driving NDIS reforms during our first term in Government.
And Jenny McAllister, who has worked tirelessly over the last year to deliver a more sustainable scheme and tackle fraud.
While our efforts are bearing fruit, much more needs to be done to protect the NDIS and the people who rely on it.
And the fundamental barrier we are facing is the design of the scheme itself.
The Fraud Fusion Taskforce we established shortly after coming to government has identified eight recurring design failures in long standing Government programs, making them susceptible to fraud – the NDIS has all eight.
It also identified seven fundamental building blocks for high integrity programs. The NDIS has none of them.
These structural flaws mean that measures we’ve introduced to control spending are simply not working as we intended.
And – as I said last year – even 8 per cent growth is not sustainable indefinitely.
At that rate by the end of decade, spending on the NDIS would cost more than Medicare and the PBS combined, the backbones of our universal healthcare system.
That’s why the National Cabinet agreed to work to get spending growth down to 5 to 6 per cent or lower.
But our efforts to get to 8 per cent are still hitting hurdles.
The Scheme Actuary has recently advised Government that spending has blown out by $13 billion over the next four years.
Left unchecked, this blowout would mean that we will not achieve the 8 per cent growth target until the end of the decade, instead of this year.
Decisions in the Federal Court and Administrative Review Tribunal have restricted the Agency’s ability to implement scheme changes to ensure the Scheme serves and supports those it was built for.
Legislative uncertainty has also raised serious questions over the Agency’s ability to implement a range of scheme changes designed to improve quality and control spending, such as the New Framework Planning agreed by all governments in principle some time ago.
This new planning system will deliver more certain and equitable outcomes for participants.
But, as the NDIS Reform Advisory Committee said recently, more time is needed to deal with the legislative uncertainty and remove the risk of other unintended consequences.
The New Framework Planning rollout will now commence on 1 April next year instead of July this year.
Most significantly in spending terms, the Agency has not been able to reduce the number of plans undergoing an unscheduled reassessment.
One in five plans are currently subject to an unscheduled reassessment each year.
Often at the request of Plan Managers – who can stand to gain – not participants.
And the average result of these reassessments is a 20 per cent increase in plan value – a large driver of spending growth.
The Agency committed to getting that reassessment rate down from 20 to 15 per cent but hasn’t been able to deliver that.
These cost blowouts simply cannot continue. When Parliament returns, I will introduce legislation to get a grip on these drivers of scheme and plan inflation.
This is simply good management, long overdue.
Other drivers of Scheme inflation that have got out of control will also be addressed by this Bill.
The runaway budget for social and community participation is one such area.
The NDIS was built on the promise of inclusion.
It was meant to act as a framework that opened society up for people with a disability and allowed genuine community participation.
But the current way the NDIS approaches social and community participation means that the programs which once provided real opportunities for connection have been allowed to wither away.
Where programs do exist, supported by volunteers, they are often overwhelmed by NDIS providers who drop off participants without notice.
While many support workers provide valuable supports, too many participants tell us their support workers are spending more time on their phones than engaging with them and providing support.
We’ve received reports of participants falling out of their wheelchair while a support worker is scrolling on their phone.
There’s no connection there, no participation, no inclusion.
This is not only a failure to show respect and dignity to the individual, but also a safety issue.
This approach hasn’t just led to the decline of genuine community support. It’s also extraordinarily expensive.
Five years ago, this stream of support alone cost $4 billion per year.
This year, it’s more than $12 billion. Triple the spending in just five years.
Today that stream of the NDIS is costing about the same as what we spend in net terms on the entire Pharmaceutical Benefits Scheme.
If left unchecked, the spending would skyrocket to around $20 billion by the end of the decade.
This cannot continue on its current course.
We will reset the total cost of social and community participation back to where it was last year and prevent any further runaway growth.
I want to be honest with people; this will have a material impact on participant plans.
In terms of the average actual spend by participants this will take people back to where they were in 2023.
The average plan spend this year is about $31,000, up from around $14,000 five years ago.
Over the next two years our changes will bring that figure back down to about $26,000 – back to where it was in 2023.
Without our changes, that figure will have been more like $33,000.
Those figures reflect the total spending by participants - the reduction in their budgets will appear larger than that due to differences in utilisation.
This is about stabilising the costs of the scheme – and guaranteeing the essential services the NDIS provides - here and now.
We will also establish a $200 million fund – the Inclusive Communities Fund – to rebuild capability among community organisations so people have new options to genuinely participate in their local community.
This fund will be open to mainstream and disability organisations with details to be settled in consultation with the disability community.
We’ll also be moving quickly to improve the quality and reduce the cost of the huge number of intermediaries in the Scheme – those third-parties who manage the majority of NDIS plans and claims.
Many of these people provide valuable support to participants.
Others have no qualifications or background in disability services, and are more interested in clipping the ticket.
We will reduce spending in this area by 30 per cent.
Market models are designed to create competition.
But too often in the NDIS, we see that competition play out with third parties cutting costs and cutting corners to get as many plans on the books as possible rather than trying to win clients based on the quality of their service.
Instead of this contest, our Government will identify a shortlist of accountable, quality providers which people can choose from.
Making the NDIS sustainable is also about returning the scheme to its true purpose.
The NDIS was established to support people with significant and permanent disability, but its scope has expanded to cover many Australians with less significant support needs.
The ‘Thriving Kids’ reform I announced here last year marked the beginning of our determination to re-set the Scheme to its original intent and keep the Scheme strong for those it was built for.
We now intend to build on that foundation.
The Bill I intend to introduce in the Budget sittings will allow us to introduce standardised, evidence-based assessments of a person’s functional capacity to determine access to the Scheme.
In line with the Scheme’s original intent, access will be based upon a significant reduction in a person’s functional capacity that impacts their day-to-day living.
It will also remove the use of lists that decide on a participant's eligibility based on diagnosis alone.
These so called ‘access lists’ were put in place to get the Scheme up and running.
They were always supposed to make way for an objective assessment tool.
Instead, the ‘diagnosis gateway’ has funnelled people onto a Scheme that was never designed for them.
Now that’s not their fault.
They’ve been told this is the only program available or that this is the help their child needs.
It is our responsibility to make sure that in the future, these Australians are pointed to the right place.
This is a big change to the Scheme – the details of which will be worked through carefully over coming months with a Technical Advisory Group, members of the disability community and the States.
The NDIS was originally intended to support around 410,000 people with a disability. Today there are 760,000 people on the scheme.
While new eligibility rules need to be worked through, our initial modelling will see the number of people on the scheme reduce to around 600,000 by the end of the decade instead of growing to well over 900,000.
This is still substantially higher than the Productivity Commission projection of 550,000 by the end of the decade.
As we have done with Thriving Kids, we will also work on establishing programs with States which the NDIS Review described as ‘Foundational Supports’ – to give quality local supports to people who are not given access to the NDIS.
This work already has $6 billion allocated to it by earlier decisions of National Cabinet.
Like Thriving Kids, this will see us rebuild systems that used to be there for people with less significant support needs in partnership with the community and States and Territories.
Systems that were unfortunately dismantled, leaving the NDIS as the only port in a storm for many Australians.
Under the market set up by the Coalition, you need more ID to get into a licensed club than to be an NDIS provider.
That will change.
Not every provider needs to be fully registered. We don’t need to monitor retail purchases from a chemist the same way we monitor close personal care of vulnerable people.
But we will expand categories of mandatory registration to include the higher risk activities – personal care, daily living supports, and supports provided in closed settings.
This builds on existing mandatory registration requirements and the Government’s earlier decision to introduce mandatory registration for Supported Independent Living, as well as platform providers from 1 July 2026.
We also need to tackle how payments are claimed and managed.
Currently the NDIA has no visibility of evidence for 90% of claims that are made by plan managers or by providers directly.
That’s around 600,000 claims every day without supporting evidence.
And the standard of invoices that are being submitted can vary wildly.
Worse still, the lack of integrity in the system has opened the door to the worst parts of organised crime.
The Australian Criminal Intelligence Commission has told a review into NDIS integrity that criminals are paying cash kickbacks to participants and their families, and sometimes resorting to intimidation and threats of violence towards vulnerable people.
The ACIC said large cash withdrawals, asset purchases and fraudulent financial transactions are common, including efforts to obscure the origin of NDIS funds.
This underlines the serious need for action to tackle the lack of integrity in the payment system.
Enrolling providers in a digital payments system means the NDIA will be able to see evidence from every single provider and ensure that they’re paid directly.
Again, this isn’t about scheme design or reform. It’s simply good management.
These are hard decisions – but they’re unavoidable and urgent.
And I’ll be seeking passage of these immediate controls in the Budget session of Parliament.
We’ll be working to get the support for that good management from the Opposition – and from States, of course, who now have much greater funding responsibility for the Scheme after this year’s National Cabinet.
The deeper reform – rebuilding how the NDIS will operate into the future – will be done through genuine and respectful work with the States, and with the community.
While we are determined to put in place strong management systems immediately, reforms that go to the nature of the Scheme and the type of supports it delivers should always be framed by the commitment: ‘Nothing about us, without us!’
Beyond the eligibility rules I just discussed, that engagement will include:
- The design of the Inclusive Communities Fund
- Commissioning supported independent living, plan management and support co-ordination – rather than relying on a market that isn’t working
- Differentiated pricing, ongoing implementation of New Framework Planning, and more
This is the Government’s plan to secure the NDIS – a plan with four pillars:
- Fighting fraud and stopping rorts
- Slowing rapid cost increases
- Clearer eligibility requirements
- Delivering quality services and support to participants
Because Australians expect the NDIS to support people with a disability and their families, and to continue to transform their lives.
Not to be an ATM for shonks, grifters, fraudsters and crooks.
Under this plan, the NDIS will grow every year.
But instead of costing more than $70 billion in 2030, taxpayers will spend around $55 billion.
Over the forward estimates, spending will grow around an average of 2 percent every year as we re-set many of its design features, before returning to 5 percent growth from 2030.
It will still be the largest social program in Australia, outside the Age Pension – and the centrepiece of the most comprehensive suite of supports for people with disability anywhere in the world.
The NDIS was established as a partnership between the Commonwealth and the states.
For the Scheme to succeed in the long term – that partnership must succeed.
States and the Commonwealth will need to work together to re-make the NDIS for the future.
I extend a hand of genuine partnership and goodwill – and I know the community expects states will do the same.
The NDIS will be accounted for in the Budget - but this is bigger than the Budget.
The NDIS is a statement of our national values, it’s a measure of our national character.
It’s more than a source of support for people with disability, it’s a source of pride.
But every story about a dodgy provider rorting the system eats away at that.
Every example of taxpayer money wasted on fraud erodes trust.
That’s why these reforms are about much more than Budget savings. This is about saving the NDIS itself.
Because if we act now, we can safeguard and strengthen it, so that it serves Australians it was created to help.
So that it upholds its purpose of providing choice and control, dignity and opportunity to Australians with a permanent and significant disability.
Then we can make sure that - like Medicare - the NDIS is still changing lives, three decades from now.
But if we wait, if we hang back, if we imagine that hard choices can wait for easier times.
Then the decision will simply be taken out of our hands.
The social licence will be lost.
And the NDIS will not be able to deliver what Australians with disability deserve.
Our Government cannot – and will not – accept that.
This is the right thing to do.
And it is the right time to do it.
For the sake of people who needs the NDIS today.
And so future generations can count on its promise in decades to come.